In responding to Jonathan Wilson's latest post, I think it's useful to discuss the defects of lawyer licensing in terms of its distinct objectives.

1. Protecting clients from dishonest and incompetent lawyers.

As I said in my initial post, licensing communicates little useful information to the client and serves mainly as an entry barrier. Indeed, the exhaustive research that I did for Lawyers as Lawmakers: A Theory of Lawyer Licensing, 69 Mo. L. Rev. 299 (2004) revealed no credible arguments or data in support of the client protection rationale for lawyer licensing. Of course legal training provides important skills, as Jonathan argues in his recent post, and as I said in my post. But that doesn’t support licensing. Clients could be protected by markets, including certification by private organizations.

The challenge in defending lawyer licensing is that it's not enough to argue that licensing addresses the problem of incompetent and immoral lawyers. This is true. The question is whether legally enforcing the lawyer cartel does a better job than markets alone would – a much more dubious proposition.

Jonathan says the poor and middle class will be hurt if they can hire unlicensed practitioners. But, again, there’s no evidence that licensing is a cost-effective remedy for this problem.

I can’t guarantee that the legal profession and journalists won’t demand regulation when the inevitable horror stories occur. But that’s an argument for appropriate skepticism about such demands, not for regulation.

2. Protecting against abusive and irresponsible litigation.

As I argued Monday, there is no reason to believe that our current licensing system protects against excessive litigation. Anybody with a grievance can find somebody to argue it. I suggested some possible reforms, but whether they would work or are politically feasible is tangential to the present debate.

3. Enforcing ethical rules.

The legal profession has been notoriously lax at disciplining itself. Bribing litigants, as alleged in the Milberg case, is serious misconduct (though I don’t think the nuclear option against the firm is appropriate). Where was the state bar? Where, indeed, is Eliot Spitzer? Even with lawyer licensing we had to rely on federal criminal prosecutors. Moreover, as I’ve argued in Ethical Rules, Agency Costs and Law Firm Structure, 84 Virginia Law Review 1707 (1998), ethical rules often disable the very market mechanisms that could provide real protections.

4. Ensuring that lawyers fulfill their obligations to the public, as by monitoring corporate clients.

The appropriate extent of such obligations is an open question, in my view. In any event, since the bar has refused to impose meaningful obligations in this regard, we now have SOX 307.

5. Giving lawyers incentives to engage in lawmaking.

This is the argument I made in my lawyer licensing article. Some would say that if licensing encourages lawyers to make law, that’s a reason not to have licensing, given lawyers’ perverse effects on the law. I agree that this argument for licensing is a close call. In any event, even if I’m right, this argument supports only a limited licensing requirement for high-end law practice, mainly for transactional lawyers. It would not impose significant constraints on the availability of legal services for the poor and middle class.

* * *

Having said all that, I’m hardly sanguine about the prospects for meaningful reform of our current system, supported as it is by our most powerful interest group. Nevertheless, I support Jonathan’s recommendation of a blue ribbon commission. However, I would argue that we need a commission focused on problems in the market for legal services, not just one for abusive litigation. The commission I have in mind would be explicitly tasked with analyzing the functions of lawyer licensing, and whether it is fulfilling its goals. The case for such a commission is made, in my view, by concerns about excessive litigation and by significant changes in the markets for legal services and the functions of lawyers. These changes should prompt a reexamination of our more than 100-year-old system that the profession, on its own, would be unlikely to undertake.