At Volokh Conspiracy, Ilya Somin writes:
This week, many of my former students will be undergoing the painful experience of taking the Virginia bar exam. My general view on bar exams is that they should be abolished, or at least that you should not be required to pass one in order to practice law. If passing the exam really is an indication of superior or at least adequate legal skills, then clients will choose to hire lawyers who have passed the exam even if passage isn’t required to be a member of the bar. Even if a mandatory bar exam really is necessary, it certainly should not be administered by state bar associations, which have an obvious interest in reducing the number of people who are allowed to join the profession, so as to minimize competition for their existing members.
What changes would we see if it was no longer necessary to pass the bar in order to practice law? We can analyze this in two steps. First, hold everything else about the bar exam fixed and ask how the market will react to making it voluntary.
The first effect would be to encourage more entry into the profession. Going to law school is not as much of a risk if you know that failing the bar is not fatal. There would be massive entry into specialized law education. Rather than go to a full-fledged law school, many would take a few practical courses focused on a few services. Traditional law schools would respond by becoming even more academic and removed from practice.
Eventually the bar will be taken only by high-level lawyers who work in novel areas and whose services require more creativity and less paper pushing. But the bar will no longer be the binding entry barrier to these areas. The economic rationale for the entry barrier is to create rents for practicing lawyers so that they have something to lose. This keeps them honest and makes their clients trust them.
Now reputation will provide these rents. Law firms, even moreso than now, will consist of a few generalist partners who embody all of the reputation of the firm and then an army of worker-attorneys. All of the rents will go to the partners. The current path of associate-promoted-to-partner will be restricted to only a very small number of elites.
As a result of all this, competition actually decreases at the high end.
All of these changes will alter the economics of the bar exam itself. Since the bar is no longer the binding entry barrier, bar associations become essentially for-profit certification intermediaries. This pushes them either in the direction of becoming more selective, extracting from further increases in rents at the high end or less selective and becoming effectively a driver’s license that everyone passes (and pays a nominal fee.) Which direction is optimal depends on elasticities. Probably they will offer separate high-end and low-end exams.
My bottom line is that banning the bar increases welfare but perhaps for different reasons than Somin has in mind. Routine services will become more competitive and this is good. Increased concentration at the high end is probably also good because market power means less output and for the kinds of lawyering they do, reduced output is welfare-improving.
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July 28, 2009 at 7:53 am
Greg
All hat, no cattle.
There are states that don’t require lawyers to pass the bar. I live in Wisconsin. Graduates from either of Wisconsin’s two law schools are exempt from taking the bar exam.
Real world experiments exist in this topic. Get some facts and then write a real column.
July 28, 2009 at 10:04 am
jeff
thanks for your comments greg.
The Wisconsin Bar has exclusive authority to accredit law schools which grant graduates entrance to the bar. So effectively the system is the same. The thought experiment here considers what happens when the bar association no longer restricts entry into law practice (whether by bar exam or final exam.)
July 28, 2009 at 6:53 pm
L2P
Actually, in several states you can become a lawyer without passing the bar simply by practicing under the guidance of another lawyer (called a “country lawyer.”) You could also look to Mexico, which does about what you’re imagining. But I think your deal isn’t with passing the bar, it’s with licensing altogether.
Still, I’m going with “all hat, no cattle,” like your first commenter. It doesn’t seem like you know about mill practices, where one attorney has several paralegals, in areas don’t require “more creativity and less paper pushing.” (Walk into any consumer bankruptcy practice or immigration shop.) That already largely fills the need you think would be filled by those non-bar-passing guys, who’ll have a hard time competing with guys who are licensed and billing at a lower blended rate. Do you even know what a blended rate is? Just curious.
You also seem confused about how firms aquire their reputations. Most big firms market themselves on the quality of THEIR ASSOCIATES as much as their partners. That’s why a premium goes to top-25 law schools and top-20% grads. But even with your factless daydreaming, you can imagine how Rainmaker A (sterling reputation, sucky associates) will compete with Rainmaker B (sterling reputation, awesome associates.)
Frankly, you seem pretty clueless about the legal profession. I hope it’s not your specialty.
July 29, 2009 at 9:37 pm
Podcaster
What’s next, becoming a lawyer without going to law school?
September 7, 2009 at 1:08 am
kachi
you are doin a nice work.
this same problem poses in Nigeria. the federal govt through the council of legal education runs our law schools(just 4 campuses) while in a year more than 1500 lawyers are been graduated by the different universities acrorr the nation. But non of them will be called to bar unless he or she struggles to enroll in the underscaled 4 available campuses.
i just graduated this year after studing law for five years at MAdonna UNiversity, Okija NIGERIA. am still waiting to go for my one year law school programe. TELL ME WHAT CAN I DO IN SUCH A BAB SITUATION!
May 15, 2014 at 12:36 pm
Diana Drakulich
I would love to see the legal profession opened up through banishing the Bar. I live in NVA and lawyers around here bill $300-$500/hr. That is just ridiculous and puts legal representation outside of economic capabilities of the the middle class. Furthermore the ones I have dealings with have been shockingly mediocre for that much money.
So many VA lawyers act like greedy shysters. They have so little competition. Banish the Bar and let the law school graduates make the legal field more competitive and therefore more ethical.