>More lawyers could afford to charge reasonable market rates, and not work for large firms, if it weren't for the ABA mandating that you have to attend a law school (that results in huge piles of debt) or clerk for years (four in California) in order to join the bar.
That's exactly the problem, regulatory capture of government protected guilds. It's exactly the same with Doctors and the AMA, or electricians, hell in some places even interior decorators.
If you've ever had to hire a commercial electrician, it's absolutely terrible. Once they pull a permit and start working, it's extremely difficult to replace them, and they know it.
Recently the general contractors in Georgia convinced the state to raise the net worth requirement for contractors. They are already required to have massive insurance coverage, so the only reason was to protect the incumbent contractors from new competition.
Anywhere you end up with government sanctioned guilds ran by industry or ex-industry people, you're just asking for regulatory capture and the resulting protectionism.
Without a regulatory body it would be too easy for an unqualified person to pose as an electrician, doctor, dentist or lawyer. Do you really want someone with no experience or training wiring your house, pulling your teeth, operating on your knee, or defending you at trial?
On the building front, this is BS. I was an electrician in the UK, and because of the regulatory capture here in Canada it's not worth my time to become an electrician.
I'm completely unqualified as an electrician here in Canada, but I have more varied experience with electrical circuits, safety testing and literally everything to do with the job than 99% of electricians here in Canada (and the US for that matter).
I can tell you the very simple system that works for the rest of the construction industry outside of those requiring "qualifications". It's called permits and paid on completion. If the electrician doesn't pass on his permit, it doesn't reach completion and you don't pay. Why does this system work for framers, brick layers and every other trade, but it doesn't work for an electrician. Sorry that's fishy.
I legally can do my own wiring on my own house here in Canada and get it inspected by the ESA and then the building inspector to pass permit. An electrician has to pass the permit anyway. Why can I not work on someone elses house and get the ESA to pass my work? Why can I not apply for the ESA to inspect my work and verify that I'm a competent electrician. Because I would like to tell you the truth, in that only 20% of those "qualified" electricians are actually doing work to code and more importantly safely.
My stepdad was a nuclear power electrician in the Navy, but when he got out he found out that he'd have to spend years as an apprentice to someone less qualified than him in order to be licensed.
I'm sad that you've been downvoted, though I disagree with you.
Occupational licensing doesn't just improve service quality (if it improves service quality), it also increases the price. The result is often that instead of great quality, the consumer gets nothing at all because ze can't afford it. This hits the poorest people hardest. In the USA, the poor have a famously bad time with healthcare and legal advice.
There are mechanisms other than mandatory qualifications by which consumers can measure quality, including voluntary qualifications, reputation, and price signaling. These aren't perfect, but neither are mandatory qualifications. Each mechanism has advantages and disadvantages.
With healthcare at least, there are walk-in clinics and nurse practitioners. Without licensure you wouldn't have a surfeit of cheap doctors; you'd have quacks running around representing themselves as doctors. With licensure you still have the quacks, but they call themselves "alternative medicine" and you can still go to them if you want. So there's no real loss of choice there.
Medical licensing isn't just about the right to call yourself a doctor.
Alternative medicine practicioners, or even experienced doctors who qualified in another country, are not allowed to perform the same procedures as doctors regardless of whether their patients would like them to. There is a very real loss of choice.
Internationalization is a valid point, but I'm not too choked up about my witch doctor not being allowed to perform open heart surgery. Besides, he would probably rather prescribe me water or stick needles in me instead.
Sarcasm aside, you're missing the point. Why isn't it sufficient to regulate the title 'Doctor' without preventing other practitioners from practicing?
People who wanted a traditional medical practitioner would be protected, and those who were willing to take more risk would have the choice.
Because it assumes there would be a real informed choice.
The staggering amount of money that do get paid to quacks selling stuff that is proven not to work show us very clearly that informed choice is largely a fantasy when dealing with the general public.
Homeopaths and acupuncturists don't even do normal medical procedures; that's kind of the point. If you are doing normal medical procedures, you should be licensed and regulated to make sure you know what the hell you're doing. The freedom to have an unlicensed witch doctor perform open heart surgery on you isn't an essential human right; it's not even something a sane and informed person would want to do. It's a non-issue.
Mentioning witch-doctors, homeopaths and acupuncturists is a straw man.
It seems to me that that private group of scientifically grounded medical practitioners who certified their members, but had different criteria from the state licensing system could be a very good thing.
This alternate certification would need to prove its reputation just as the institutions that certify doctors have. It seems likely that there are ways to train and certify doctors that produce better professionals than the current ones.
I doubt you're arguing that current state approved medical institutions cannot be improved upon. Why not allow alternatives to compete with them?
> It seems to me that that private group of scientifically grounded medical practitioners who certified their members, but had different criteria from the state licensing system could be a very good thing.
Could be, perhaps. Now weigh that hypothetical scenario against what actually happened in history that led to the state medical boards being created.
> I doubt you're arguing that current state approved medical institutions cannot be improved upon. Why not allow alternatives to compete with them?
Because we tried that and it didn't work last time. It got so bad that self-proclaimed "doctors" set up self-proclaimed "medical schools" as a con, paid large sums of money for cadavers "no questions asked", and ended up getting people murdered.
Do you have some legitimate problem with your state's medical board? I'd suggest you take it up with your state legislator.
Besides, there are alternatives--some states have separate osteopathic boards that license D.O.'s rather than M.D.'s, yet licensed D.O.'s have the exact same privileges as any other doctor.
Only self-proclaimed licensing boards? If you want an alternative licensing board, the osteopathic boards are it. Otherwise you're just engaging in ideological privatization for the sake of privatization; you don't even have a rationale for what's wrong with the licensing boards we do have.
I still can choose to pay more for someone with a demonstrable history, but if I want to take the risk on an unknown and save some money in the process, why shouldn't I be able to?
Because it results in uncontrollable externalities.
Take the electrician example: what happens if an unlicensed electrician kills himself when performing work? Does his family get to collect from your homeowner's insurance? Can they sue you? Are you criminally liable?
What about when you sell the house? Should you have to disclose that someone unlicensed did the wiring? What if you don't and the house ignites in a fire one night caused by improper wiring, killing the future owners, are you responsible? Is the electrician?
And you don't even want to touch the potential for abuse... regulation causes a lot of problems, I completely agree. But it serves to protect the public; we're effectively paying for protection against deception that capitalizes on our lack of knowledge in a specialty. That's worth protecting.
There's nothing in the current law about granting you immunity from criminal liability as long as you hire a licensed electrician, so that's a completely moot point.
>What if you don't and the house ignites in a fire one night caused by improper wiring, killing the future owners, are you responsible? Is the electrician?
In most jurisdictions you can already preform electrical work on your own property. If you install a ceiling fan should have to disclose to the new owner that it wasn't installed by a licensed electrician? Are you responsible for killing the future owner? There are scores of people installing their own light fixtures, where's the public outcry over all the dead homebuyers?
What happens when you hire the unlicensed kid next door to cut your grass, and he cuts off his foot?
What happens when an unlicensed painter falls off a ladder and kills himself?
If you want protection from damage caused by people you hire to work on your house, only hire contractors who are insured. Make them present proof of insurance before the job begins.
Fun fact: in California and New York, you are legally required to inform the new owner that the fan was not installed by a licensed electrician if the installation involved any more electrical work than simply plugging it into an outlet.
You would not be entirely responsible for killing the future owner...but yes, under the doctrine of negligence, you would be at least partially responsible for killing the future owner. In fact, this is one of the first things you learn in your first year of law school.
The unlicensed kid: That depends on how he cuts off his foot. Was he distracted? Was your wife distracting him at the time sunbathing nude next to the pool? Was he using your mower? Was your mower broken?
Unlicensed painter: Also depends on the specific facts. Was it his ladder? Why did he fall off the ladder? What did he fall onto? Would such a fall normally have killed a person? What special facts in this situation resulted in the painter's death?
Protection from damage: You're spot on. In fact, in Ohio, you're required to hire only licensed and bonded (i.e., insured) contractors for renovations or construction work. Moreover, contractors are required to provide proof of license and bond before they begin work or try to collect payment.
@learc83: the difference between professions requiring and not requiring licensure is the foreseeability of the risks. A reasonable person should be able to foresee the risk that a painter might fall from a ladder. A reasonable person might not be able to foresee the risks associated with installation of wiring by an unlicensed electrician.
>the difference between professions requiring and not requiring licensure is the foreseeability of the risks.
No, the difference is in the lobbying power of industry incumbents. A quick search will show that there are states where interior decorators, and trumpet players are required to be licensed.
I think the law can assume a reasonable person would be aware of the dangers of electricity. Most states have moved away from requiring gas pump attendants--is a reasonable person aware of the dangers of gasoline? If so why not the dangers of electricity?
You can. The ABA's licensing requirement does very little to constrain supply. There are way more lawyers graduating each year than there are jobs at big firms. So you can easily go on craigslist and find a lawyer who will work for $30 an hour to get some experience.
The reason you can not represent anyone other than yourself in court without passing the BAR examine is because the defendant might not be properly represented and cause problems such as mistrial or open up loads of appeals. Why? The bar examine is used to ensure that an attorney knows and understands the legal rules and procedures. That's it. If an attorney fails to object to a motion [on behalf of their client], fails to file a motion [on behalf of their client], or fails to respond to a claim or motion [on behalf of their client] then their client isn't being properly represented. Why can YOU represent YOURSELF? Because if you fail any of those things, well, it's your own fault. What is the number one topic we are failing to teach in our education system? BASIC [foundational] law and legal issues.
You have the right to represent yourself, but not another person or entity, which is what you would be doing if you attempted to represent your limited liability entity in court. It doesn't matter if you're the sole shareholder or not, you and the company are not one and the same.
Except that such logic seems to vanish in small claims court (where I can represent my corporation), and before the USPTO Trademark Trial and Appeals Board (where I can represent my corporation)...which means that it's really not very logical at all.
The details of small claims courts vary wildly from state to state, but more importantly, they're not courts of general jurisdiction. They have severe restrictions on what they can and can't do, and the losing party is often entitled to a de novo trial in a court of general jurisdiction.
The USPTO appeals board you mentioned is not a court at all. It is an administrative body whose holdings are again subject to review in US District Court.
Small claims courts are not much different from arbitration. There are no consequences to not showing up or participating, as losing simply means that you can move the matter to a new (i.e., independent) case in a real courtroom with a real judge.
I cannot defend the USPTO; much of what they do is indefensible.
There's nothing wrong with certifying organizations, but there ought to be competition and free market choice. Leave it to the buyer to determine if they wish to hire a "State Certified Electrician" or "Professional Electricians" certified electrician, or the electrician with not credentials. But also place legal civil obligations on the buyer. "OH NO!" you scream because how can the buyer know what the local codes are and make sure the electrician is following them? The buyer needs to know and be educated to transfer that risk to the electrician. State in the contract that the electrician is responsible for any/all civil fines due to work they perform. The certifying (and competing) organizations can/will work with insurance companies to also transfer some risk off and away from the contractor.
The contractor and buyer still should be criminally liable for any willful noncompliance.
Absolutly agree with this. There is a nice episode of the Econtalk podcast that talks about the "guilds"-Problem.
Here is the Abstract: "Clifford Winston of the Brookings Institution talks with EconTalk host Russ Roberts about the market for lawyers and the role of lawyers in the political process. Drawing on a new co-authored book, First Thing We Do, Let's Deregulate All the Lawyers, Winston argues that restrictions on the supply of lawyers and increases in demand via government regulation artificially boost lawyers' salaries. Deregulation of the supply (by eliminating licensing) would lower price and encourage innovation. "
--> http://www.econtalk.org/archives/2011/09/winston_on_lawy.htm...
> regulatory capture of government protected guilds
this just doesn't align with evidence. if it were true, there would be too few lawyers, not too many lawyers.
i'm not saying the effect you describe never happens, but when it does, there is not enough supply, driving prices up (this is probably the case in medicine, where there are not enough doctors, driving prices up)
It's not just about the number of lawyers, but also the cost to become one.
In the US, unlike many other countries, practicing law requires a graduate degree from an accredited school. This dramatically adds to the cost of a legal education, and drives up the price for everyone. This is the direct result of "regulatory capture of government protected guilds."
the cost of law school is a fixed (and by the time you become a lawyer, sunk) cost, and therefore has no bearing on supply decisions.
moreover, how does the cost of law school jack up prices in a world where there is an excess of lawyers? if you're a lawyer, do you charge the amount that covers your loans, or the amount that nets you the most profit?
the very fact that there are excess lawyers is evidence that regulation of who gets to become a lawyer is not increasing prices. now i'm not saying that lawyers are efficiently priced, merely that regulatory capture is not the reason for this.
There is an excess of lawyers in certain areas; an excess of IP lawyers doesn't map to an excess of divorce attorneys.
>if you're a lawyer, do you charge the amount that covers your loans, or the amount that nets you the most profit?
If all lawyers were interchangeable, your argument might hold, but the artificially high price of legal education leads to a misallocation of resources--The increased cost of student loans can cause lawyers to move into specialities that are higher paying, causing shortages in one area and surpluses in others.
> The increased cost of student loans can cause lawyers to move into specialities that are higher paying, causing shortages in one area and surpluses in others.
This is circular. You're arguing that shortages in some areas are causing higher prices, but then arguing that lawyers are leaving certain areas for the areas that pay higher salaries. You can't say that prices are high for corporate legal services because supply is restricted while saying that the high cost of legal education causes a surplus of lawyers in areas where salaries (i.e. prices) are the highest.
You can't make sense of the legal market by thinking of it in terms of regulation cutting off supply leading to higher prices. That is not the major operative force in the legal field.
The major operative force is branding, and that drives everything else. Companies pay substantial fees to hire firms with brands. Firms with brands pay substantial salaries to hire attorneys with brands.
There are 200+ ABA-accredited law schools, with 45,000 graduates each year. Only about 10-15% get a job working with a big firm that does corporate work. This is because at a big New York firm, fully a quarter of the new hires might come from Harvard and Yale, and 90% from the top 15 schools. Even with the high cost of legal education there is a huge untapped supply of attorneys who would jump at the chance to work for half as much as Harvard grads to do corporate work. There are no ABA restrictions to hiring these people to do corporate work. What there is is a lack of demand for lower-price lower with lesser credentials in that particular subset of the market.
>You can't say that prices are high for corporate legal services because supply is restricted
I'm not saying that. I agree with you that there is a surplus of corporate lawyers, and so deregulation wouldn't really reduce the price in that sector.
Even if there were cheap lawyers who learned through apprenticeship instead of law school, large companies still wouldn't hire them.
I'm talking about prices being driven up in other areas, where law school grads with insane debt don't want to work.
I know several law school grads who couldn't find the kind of high paying job they were looking for. However, since they had so much debt they ended up taking non legal jobs (one is a project manager, the other an entrepreneur), instead of moving into another lower paid area of the law.
Because of high education costs (and the requirement that lawyers posses a graduate degree, which means most of them are going to be at least 25 by the time they can start practicing, plus the psychological factors involved in having spent 7 years in school), there is a minimum price below which most lawyers will not work, and will seek other opportunities.
It doesn't make sense to concede that there is a high supply of lawyers and still argue that cost is driving up prices. The price of a service depends on the supply of the service and the demand curve. At a given level of supply, it is irrelevant what the cost of providing the service is, that will not change the cost.
It's valid to make the "guild" argument and say that the education requirement is driving up prices, but only if you argue that the education requirement is artificially restricting supply. When ABA-accredited schools are graduating about twice as many students as are getting hired, that's a difficult argument to make. Would salaries really go down if you added an entire category of potential hires below the current group that already isn't getting hired?
The supply of lawyers doesn't quite follow the simple market relationship either. The study and practice of law are still associated with some prestige, and the high cost of legal services leads many to believe that they'll quickly pay back their inflated student debt.
There definitely is regulatory capture going on. Small, more affordable schools are in a real bind over having to meet stringent and arbitrary accreditation criteria, but that doesn't affect the number of lawyers because students are willing to pay anything to become a lawyer anyway.
So you do not need to go to law school to be a lawyer. Anyone can take the BAR and be a lawyer. Again, as Antone points out, this all comes down to a perception of quality. Many people (and I am not saying you) would not hire a lawyer who did not go to law school.
Did not check on this until now. Meant to say, "in California" considering the heavy conversation surrounding startup lawyers and the location of the author. Good catch! Anyone can take the BAR in California and yet legal prices here are some of the highest in the country.
That's exactly the problem, regulatory capture of government protected guilds. It's exactly the same with Doctors and the AMA, or electricians, hell in some places even interior decorators.
If you've ever had to hire a commercial electrician, it's absolutely terrible. Once they pull a permit and start working, it's extremely difficult to replace them, and they know it.
Recently the general contractors in Georgia convinced the state to raise the net worth requirement for contractors. They are already required to have massive insurance coverage, so the only reason was to protect the incumbent contractors from new competition.
Anywhere you end up with government sanctioned guilds ran by industry or ex-industry people, you're just asking for regulatory capture and the resulting protectionism.