The Legal Profession Isn't Overregulated It's Just Badly Regulated

Don't walk away from the value of regulation just because the legal industry is a mess.

For the last four decades or so, the American metanarrative has more or less blindly accepted that deregulation is the answer to everything. America deregulated the airlines… and gutted routes to small and mid-sized airports while creating airline gate monopolies while claiming to have lowered ticket prices (which it mostly did not, the invention of high bypass ratio turbofans and automation did). America deregulated cable companies and stacked the FCC with industry stooges… and now those companies function as geographic monopolies that are getting taken to court for actively subverting local governments. The cheerleaders for deregulation prefer to use struggling immigrant small-business owners as a fig leaf for oligarchic corporations, but for every irrational regulation on a nail salon, there’s a swath of dying employees to remind us why we had those regulations in the first place.

Like every other industry, the legal profession has gotten the deregulation bug lately and true to the deregulation story, it’s all about the “widows and orphans” on the wrong side of the access to justice gap. “If only we didn’t have all these regulations on the practice of law, they could get the legal help they need!” It’s a well-meaning argument and there’s no denying that a lower cost alternative is necessary for the growing gap — which now extends beyond the indigent — but opening up the floodgates is not a particularly attractive solution.

Andrew Arruda of ROSS Intelligence recently took on this subject:

The legal system has been regulated so tightly that it has led to a world where only a fraction of the citizens who require legal services can access them. Consequently, the current regulatory scheme has led to a black market of legal services and innovation stagnation in the evolution of legal services.

Unfortunately, as Arruda points out, the anecdotal tales of black market scams are hyperbolic and are often presented in ways that play on thinly veiled racism. When some unscrupulous actor tried to take advantage of poor immigrants by offering doomed legal advice for a fee, it often gets framed as a reason to lock out anyone willing to offer legal help to these communities rather than a sign that many more people are trying to offer genuine assistance and are hamstrung by the current regulatory framework.

But the answer isn’t to unleash professional anarchy on the most vulnerable. The legal industry needs to begin from the premise that regulation is good and necessary to protect the public and then recognize that the current regulatory regime is incredibly bad and replace it.

We need to reregulate as it is clear that our current framework, which requires an all-out prohibition of legal assistance by anyone other than a lawyer, only serves to strengthen the systemic racism that these groups already face on a daily basis.

In typical lawyer fashion, we have allowed perfect to become the enemy of good. A lack of tiering and specialization of labor in the legal industry then creates an innovation vacuum as lawyers have been forced to become jacks of all trades and are unable to collaborate, delegate, or systematize their practices. Through an absolute prohibition on nonlawyer ownership of law firms, we have created a system where an individual who has worked hard to earn their Juris Doctor must also simultaneously perform the functions of someone who has earned a degree in business, in accounting, in computer science, in social work, and in psychology. How can we expect thoughtful innovation, with or without technology, within law when we freeze out those who specialize in what lawyers most need assistance with? I imagine a world where an attorney can team up with an MBA recipient, a social worker, and a computer scientist to open a highly profitable law firm where each of them benefits equally as owners. Again, our professional regulation as it currently stands does not allow this.

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Arruda and the IAALS Unlocking Legal Regulation project is not aiming to just remove prohibitions, but to transform them. The industry should have tiered practitioners the way medicine does. State bars should be devising regulatory schemes to allow that in a manner that protects against abuse. These licensing programs should be able to move out of the law schools to 4-year and even community colleges that meet appropriate standards to allow practitioners to be trained without carrying a debt-load that prevents them from making a living serving the community.

The deregulation mindset takes as a given that if any regulatory policy is bad, then all regulations must be severely curtailed. It’s thoroughly busted logic and usually peddled cynically by folks trying to take advantage of the resulting anarchy. The cure for bad regulation is good regulation — or at the very least better regulation — not no regulation. That’s a lot harder work than just tearing everything down, but thankfully there are some people out there willing to take it on. Now the rest of the profession has to join in.

Reregulation, Not Deregulation [IAALS]


HeadshotJoe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

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