May 18, 2016

CULTURE OF CORRUPTION: The ABA Cartel.

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. . . .

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.

Occupational licensing is never about protecting consumers, and always about preventing competition. Meanwhile, on this particular subject, I strongly recommend my colleague Ben Barton’s Glass Half Full: The Decline And Rebirth of the Legal Profession, which discusses it at length.

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