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May 19, 2006

Is Lawyer Licensing Necessary?

By Jonathan B. Wilson

Recently, Larry Ribstein and I kicked off a debate on the necessity of lawyer licensing. (Past POL coverage: Is Lawyer Licensing Necessary?; A Response to Professor Ribstein; A Response to Wilson).

The topic must have touched a nerve, as a number of the leading blawgs chimed in and even the Wall Street Journal conducted an online poll on the topic. (Smug aside: As of Friday afternoon the "yes" votes commanded a 59%/41% lead.)

Our hope in this week's Featured Discussion is to dig into this topic further. My own view is that this question, when viewed from the proper angle, offers a number of suggestions for how the legal profession and the American system of litigation can and should be reformed.

What is Lawyer Licensing?

By defending lawyer licensing, I am defending a system whereby, in order to legally practice law, an individual must receive a license at the state level. In nearly every state, this license takes the form of admission to the bar, usually following successful completion of an ABA-approved course of study and passage of the state's bar exam.

Most state bars also require an applicant to complete a "moral fitness" examination. In my home state of Georgia that entails a detailed personal application, identifying every place of residence, job, and course of study taken by the applicant since the age of 18. The moral fitness exam in Georgia also includes an investigation of the applicant by the bar's examiners (many of whom are former FBI agents) and contacting the applicant's relatives, friends and neighbors to validate the applicant's claims.

So what is it, exactly, that lawyer licensing is supposed to achieve?

Lawyer Licensing Ensures Competency and Moral Fitness

As one of the pamphlets for the Georgia Office of Bar Admissions states:

When a client walks into a lawyer's office, he has the right to assume both that the lawyer is competent in the law and that the lawyer will conduct the client's matter in a professional and ethical manner. The responsibility of ensuring that those who seek licensure as attorneys are competent and are fit to be licensed is shared by two separate and equal boards: the Board of Bar Examiners, which deals with the questions of the applicant's competence; and the Board to Determine Fitness of Bar Applicants, which inquires into the character and fitness of the applicant.

The chief purpose of lawyer licensing is to ensure technical competence and at least the minimum level of moral character required to perform as an attorney. This aim supports a number of public policy goals:

1. The public is protected by the state mandate that only licensed attorneys can hold themselves out to the public as qualified, both technically and morally, to practice law.

2. The state is protected by ensuring that attorneys who appear in its courts have a sufficient level of competence. (An excessive number of incompetent practitioners could clog the courts with inappropriate or excessive process. [More on this later]).

The moral examination, at least in Georgia, is quite rigorous and includes questions and third party validation of the following points for each applicant:

unlawful conduct; academic misconduct, including plagiarism; making of a false statement, including omission of relevant facts in the fitness process; misconduct in employment; acts involving dishonesty, fraud, deceit or misrepresentation; abuse of legal process; neglect of financial responsibilities, especially failure to repay student loans; neglect of professional obligations; violation of an order of a court, especially failure to pay child support; evidence of mental or emotional instability; evidence of drug or alcohol dependency; denial of admission to the bar in another jurisdiction on character and fitness grounds; disciplinary action by a lawyer disciplinary agency or other professional disciplinary agency of any jurisdiction

So, at its heart, the issue of lawyer licensing is one of protecting the public from the baneful effects of incompetent or immoral lawyers.

But the Current System is Flawed!

Readers of these pages know that our litigation system is flawed and at least some measure of responsibility for those flaws rests with attorneys, the bar associations that license and police the attorneys and the judges who began their careers as attorneys. Supporting the continued licensing of lawyers does not necessarily entail blindness to the shortcomings of the current system.

Indeed, the flaws in the status quo suggest that lawyer licensing should be improved and strengthened, rather than eliminated.

The Laissez-Faire Argument

Of course all students of the school of law and economics prefer a market solution where one exists. In his paper on the subject, Professor Ribstein suggests that lawyer licensing is unnecessary, except to the extent that it facilitates the involvement of attorneys in the law-making process.

Without addressing the professor's theory of lawyers' property rights in the law of their home states, I think a more direct justification for lawyer licensing is that laissez-faire simply doesn't work when it comes to the market for legal services.

In classical economic theory, a free market works efficiently to set prices among competing goods when there is ubiquitous and accurate information concerning the relative merits of competitors.

As I describe in Out of Balance: Prescriptions for Reforming the American Litigation System, in the market for apples, there is exactly this kind of information. Everyone knows what they like (or don't like) about apples. A consumer who wishes to compare the apples from producer A and producer B, for minimal cost, can sample both and choose the one that presents the preferred qualities and price.

Legal services are utterly unlike apples. Consumers are ill-equipped to evaluate the skills of competing attorneys and the cost of "sampling" attorneys is very high. Indeed, the cost of sampling an attorney's services (and the possible consequential damages if the attorney proves to be unskilled) could be disastrously high. An ex post facto analysis of the quality of the service will, in nearly all cases, be completely inadequate.

Bad Facts Make Bad Law

Professor Ribstein began this debate by recounting a particularly ugly story in which Brian Woods represented his autistic son in litigation against the Akron school board involving the son's access to educational facilities. After successfully obtaining a remedy, Mr. Woods was rewarded by an unauthorized practice of law prosecution, initiated by the Cleveland Bar Association. Professor Ribstein connected this case to lawyer licensing when he wrote:

Since Mr. Woods could have acted as his own lawyer, and for his son in finding a lawyer, there's obviously no reason not to let him decide to dispense with the lawyer rather than paying the huge fee a lawyer would have asked or having to drop the case.

The Ohio Supreme Court was right to have chastised the Cleveland bar and there seems to be widespread agreement that the bar should not have gone after Woods. I would even be amenable to a more general rule that permits close family members who are unlicensed to represent each other in non-criminal cases. The family relationships in those situations generally eliminate the client-protection rationales for lawyer licensing.

But Brian Woods' good fortune as a pro se litigant does not mean that every Tom, Dick and Harry should be permitted to hang out his (or her) own shingle.

In-house practitioners like myself quickly amass a treasure chest of war stories involving pro se litigants. Litigating against a pro se plaintiff, in many situations, is more costly than litigating against a well-heeled attorney. The plaintiff who represents himself will often get "velvet glove" treatment from the judge (who fears looking like a lout on appeal) and the professionally-represented defendant will be forced (via the American rule of attorneys' fees) to literally pay for the plaintiff's education on the finer points of law.

Rather than the somewhat orderly pre-trial and discovery process that results when professional lawyers practice their craft, the self-represented plaintiff will force his professional opponent to respond to out-of-order motions and arguments, helter-skelter, in an inefficient and lengthy march towards the likely conclusion of a defense victory.

So, while I applaud the individual merits of parents like Brian Woods and am somewhat embarrassed when bar associations create this kind of bad publicity for themselves, stories like this one do not justify the wholesale elimination of lawyer licensing. At most, they may suggest the need for limited exceptions to the general rule that attorneys must be licensed.

What Would an Unlicensed Bar Look Like?

Perhaps the best argument against eliminating lawyer licensing is asking the question, "what would our litigation system look like if lawyers were not required to be licensed?"

Do you think our courts have too many weak or unjustified cases?

An unlicensed bar would compound that problem as individuals with no legal training would be free to make up whatever legal theories they wish. With the American rule of attorneys' fees, defendants will bear the costs of disproving every harebrained theory that comes along.

Do you think our courts are two willing to consider unscientific legal theories and novel theories of liability?

If every citizen were free to hold himself out to the public as a legal advocate for hire there would be no end to the novel legal theories these hired guns would be able to pursue. Perhaps judges might be prompted to clamp down on novel claims in a post-licensing era, but the past offers little reason for optimism.

Licensed attorneys have enough difficulty applying the Daubert rule to their cases in the current regime. Do you think that unlicensed attorneys would have a better chance of getting it right?

Are the existing limitations on lawyers' ability to pursue weak or frivolous cases toothless and ineffective?

Imagine how toothless and utterly irrelevant they will become when unlicensed lawyers can defend themselves against Rule 11 sanctions by complaining that they had never heard of Rule 11. If any person could act as an attorney, why even bother having principles (like Fed. R. Civ. P. 11) that hold some persons to a higher standard than others? How could an unlicensed attorney, perhaps with no legal training whatsoever, distinguish between those arguments that are valid and those that are not?


Criticizing the legal profession for protecting its turf via UPL prosecutions is fair game. Lawyers are often their own worst enemies when it comes to their public reputations and their share of the public trust. When the legal profession allows its sense of professionalism to atrophy and when the state bars become little more than trade associations for a guild that protects its own, its entirely understandable for sensible persons to question why the state bars should hold a monopoly on the licensing of lawyers.

But this criticism ought to remind us why lawyer licensing is necessary and the flaws in the status quo should give us reason to preach reform, rather than deregulation.

Lawyers behaving badly is a far too common occurrence. The solution is to tighten the rules of ethics and to empower prosecutors to pursue lawyers who breach those rules.

A related solution for the problem of a profession that has lost its sense of professionalism is to reform those laws that tend to encourage lawyers to think of their craft as just another good in the marketplace. If our sense of civil justice is offended by "complaint mill" plaintiffs who churn out hundreds of filings in the hope that a handful will result in a lucrative payday we should reform the laws that permit this practice, rather than empowering the general citizenry to engage in the practice.

Deregulating lawyers as punishment or retribution for a profession that has lost its way would be a recipe for disaster. Deregulating the practice of law would open the floodgates to fraud of every conceivable variety and would only compound the problems that the readers of these pages see in our civil justice system.

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Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.