The ABA Cartel
. . . them's fighting words, truthful words, but words likely to galvanize the mincing dandies at the ABA to high dudgeon.
Maddog so love a mincing dandy fairy fight! Grab the pillows boys!
Lot's more below the fold.
"Despite the highly-publicized headwinds facing recent law school graduates, lawyers—at least those at the top of the food chain—are still doing quite well in America: More than one-in-seven are in the top one percent of income earners, according to 2012 data. Meanwhile, hourly fees are so high that quality legal services are increasingly inaccessible in underprivileged areas.
Do lawyers’ generous salaries merely reflect the fact that talent and brilliance are rewarded in a competitive marketplace—and that very few people are able to perform the tasks that most lawyers do on a daily basis? Not exactly, according to a new essay in the American Economic Review by Brookings’ Clifford Winston and Yale Law School’s Quentin Karpilow.
The reality, they say, is that the American Bar Association functions as a kind of pseudo-cartel that controls the marketplace for legal services by throwing up gratuitous barriers to entry for individuals and firms, squelching technological innovation, and blocking innovative new delivery methods that might be unleashed through deregulation. As a result, lawyers enjoy artificially-inflated wages, and working class Americans struggle to afford legal help when they need it. Some excerpts from the piece:
'Under ABA requirements, firms that sell legal services must be owned and managed by lawyers who are licensed to practice in the United States, meaning that corporations and foreign law firms cannot compete in this market. […]
Notwithstanding their intended function, entry barriers in legal services have created inefficiencies that parallel those generated by entry regulations of US network industries (i.e., transportation, communications, and energy). In particular, entry barriers limit competition and raise prices. In the long run, they compound those inefficiencies by impeding operations, innovation, and technological advance. […]
Moreover, it is likely that current entry barriers do little to improve lawyer quality in the first place. For example, the standards of lawyer quality represented by the bar examination amount to legal rules that can be looked up in a book, and that, once memorized, can be easily forgotten after the test is taken.'"
Of course top of the food chain lawyers are doing well, they write the laws, and maintain the guild (not cartel, guild!). And, no, neither the bar exams, nor the continuing legal education requirements provide any real value. If they did, they would not need to be mandated, attorneys would take them for the value they supplied. But they are mandated, because they supply no value. What they do is create an entire wing of every state bar which is dedicated to "legal education," and enforcement. This is augmented by a huge industry of businesses which provide this mandated "legal education," er, hot air. And this, of course, generates graft and corruption to keep the gravy train rolling.
Technological limitations, ownership rules, profit sharing rules, a lockdown on practice, and no discernible quality controls is no way to run a business. Yet that is what the bars do because they can.
"The truth is that allowing people without law degrees to perform basic legal tasks—and allowing firms run by technologists or businessmen, rather than lawyers, to enter the legal services market—would probably dramatically cut costs without any appreciable impact on quality. In fact, a more open market might well dramatically improve the quality of service available to low-income populations, many of which are shut out of the market altogether.
As Jonathan Rothwell has written, “politicians and intellectuals often champion market competition—but what they mean by that is competition among low-paid service workers, production workers, or computer programmers who face competition from trade and immigration, while elite professions sit behind a protectionist wall.” Subjecting lawyers to the same kind of competitive market forces that have been unleashed on lower-income workers would do much to ameliorate this inequality. But reformers pushing for deregulation should gear up for a grueling battle: The well-funded ABA cartel and its members will fight tooth-and-nail to keep their racket in place."
Quashing quality improvements, limiting access, and absurd salaries has left attorneys as one of the least liked professions in America. On the other hand, the Internet is just waiting for a reason to correct this imbalance. Maddog for one cannot wait for the great legal correction to finally run its course.
Over the past decade or so, large law firms have suffered a massive erosion due to automated discovery, and technological changes in the legal world. This allowed the splintering of the large law firms into high value and low value operations. In part, this is what is causing the train wreck at the law schools. Where a decade ago, most graduates might have found jobs, today, the big firms are hiring far less. This has created an oversupply of law graduates, resulting in declining associate wages. The law schools believe this will resolve. It will, once a few dozen law schools bang into bankruptcy.
The Internet is beginning to offer increasing solutions for an ever greater spectrum of clients. Large businesses, especially businesses with foreign locations can increasingly use cheaper, yet high quality foreign lawyers to perform most of the legal tasks, and only pass the torch once absolutely necessary. The middle class is increasingly moving towards online legal services providers. In the end, Maddog fully expects that most legal issues will be handled via an automated litigation, utilizing artificial intelligence.
While legal graduates still find it hard to find employment, Ross has a job.
Artificially Intelligent Lawyer “Ross” Has Been Hired By Its First Official Law Firm
Legal grads, meet the new boss, nothing like the old boss!
Once the dam finally bursts, Maddog, for one, will laud the change. The collapse of the legal guild/cartel is long overdue. Automation of legal services and litigation are likewise long overdue.