'Caveat Emptor' No Way to Practice Law

Published on: 
September 5, 2012

In a recent column in The Wall Street Journal, writers from the Brookings Institute espoused their philosophy for deregulating the legal profession and lowering costs for buyers of legal services: Let anyone practice law, whether they've gone through law school or not, and allow anyone to own a law firm.

These are not new ideas, but the assertion that these ideas are the key to lowering costs of legal-service delivery is misplaced for three major reasons.

First, most of the rules in place for the licensing of lawyers are there to protect the public; they are not there to protect the interests of lawyers. An individual must be competent to represent and advocate for the interests of a client.

It's the same principle as licensing doctors. Incompetence, in court or in the operating room, can cost people their lives.

Second, technology provides many avenues to reduce legal costs. Removing the licensing requirements has no impact on this issue.

Yes, requiring a license does cost time and money, but it also impacts the quality of services delivered, just as in the case of medicine, plumbing, etc. Why not remove licensing requirements for everyone in everything, from medicine to plumbing to driving a car?

Licensing assures a minimum standard of quality. Licensing requirements in specific areas of human endeavor are society's way of self-protection. "Caveat emptor" is acceptable, but not to the degree apparently desired by the authors of the Brookings report.

Third, the underlying premise that licensing provides an insurmountable barrier to entry and substantially raises costs by controlling supply might sound solid, but one need only look at the current landscape to see the holes in that theory.

There are many more lawyers than the current demand can accommodate. Many lawyers cannot find work. Those who are working often provide legal services at lower rates than they used to charge. Even large law firms find significant resistance to raising their rates.

Are legal expenses high? Yes, but compared to what? How low should these prices be before they are acceptable?

And, if there is no regulation, we might likely see larger firms pattern their pricing after one another, just as airlines currently do, so that the benefit of lower costs would not be evident.

There is currently no price regulation in the airline industry, yet it's remarkable how similar airline prices are. Yes, there are a few low-cost airlines, such as Southwest, and yes, there are also less expensive law firms as we sit here today, even with the regulations we have in place.

The only evident benefit of the authors' "non-licensing" proposal would be the destruction of minimum standards of quality. "Caveat emptor" might be acceptable if the public had a way of knowing what the quality standards should be, but they don't.

American Bar Association Model Rule of Professional Conduct 1.5 says that "a lawyer shall not make an agreement for, charge, or collect an unreasonable fee." Controversies can arise over what is a reasonable price/fee. Demonstrating value and quality of service by achieving results enables any accredited lawyer to make a convincing case about the reasonableness of a fee. Licensing does not impact this interplay.

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