The Volokh Conspiracy

Law students thinking ahead about not just passing the bar exam, but also the fitness and character requirements might take a lesson from a former student of mine.  He contacted me with some alarm a few days ago to tell me that the Virginia bar committee that has to approve fitness and character of applicants had expressed concern in his case on account of a large number of traffic citations.  Not unpaid tickets or parking tickets, or anything as serious as a DUI – simple speeding, in nearly all cases caught by automatic cameras in DC.  How many?  Nine in the past 18 months – he says many for the same stretch of DC road caught in the middle of the night by automatic radar/camera.

I don’t think this will cause him problems in the end, but it’s not something one wants to have a discussion about with the bar fitness and character committee either.  I’m submitting a special character reference about his general sense of responsibility and law-abiding nature.  Anyway, word of caution to law students looking down the road to getting sworn in.  (At least until self-driving cars take over DC roads and remove temptation; some commentators see a future in which insurance companies give lower rates to self-driving car users, precisely to remove these kinds of issues, once the insurers conclude that on balance the robot car is safer.)

This Friday at 4 PM, I will be on a panel on reform of the licensing system for lawyers at the University of Washington School of Law, in Seattle. I will be joined by Paula Littlewood, Executive Director of the Washington State Bar Association, and University of Washington law professor Thomas Andrews. The panel is sponsored by the University of Washington Federalist Society and – I believe – the Washington State Bar Association.

I will argue, as I have previously at the VC, that the public interest would be best served by deregulating the licensing system, including abolition of the bar exam and elimination of the requirement that lawyers must attend three years of law school. At the very least, I will explain, we should allow people to enter the bar after “reading law” or apprenticing with a current practitioner, as was common in the 19th and early twentieth century (this is how Abraham Lincoln became a lawyer, among many others). Such reforms can drive down the cost of legal services for consumers and also make it possible for people to enter the legal profession without a vast expenditure of time and money. It will, of course, be important for consumers to have information available to them about the quality of legal practitioners. But that can be done in many different ways, without perpetuating today’s guild-like licensing system.

Brookings Institution scholar Clifford Winston recently published a good column advocating the abolition of legal requirements mandating that all lawyers must graduate from law schools and pass bar exams:

For decades the legal industry has operated as a monopoly, which has been made possible by its self-imposed rules and state licensing restrictions — namely, the requirements that lawyers must graduate from an American Bar Association-accredited law school and pass a state bar examination. The industry claims these requirements are essential quality-control measures because consumers do not have sufficient information to judge in advance whether a lawyer is competent and honest. In reality, though, occupational licensure has been costly and ineffective; it misleads consumers about the quality of licensed lawyers and the potential for non-lawyers to provide able assistance.

Rather than improving quality, the barriers to entry exist simply to protect lawyers from competition with non-lawyers and firms that are not lawyer-owned — competition that could reduce legal costs and give the public greater access to legal assistance....

What if the barriers to entry were simply done away with?

Legal costs would be reduced because non-lawyers, who have not had to make a costly investment in a three-year legal education, would compete with lawyers, who in many states are the only options for basic services like drafting wills. Because they will have incurred much lower costs to enter the field — like taking an online course or attending a vocational school — and can operate as solo practitioners with minimal overhead, these non-lawyers would force prices to fall. The poor would benefit from the lower prices for non-criminal matters, and poor litigants, who might be unrepresented in criminal matters like hearings because they could not afford a lawyer and because of dwindling state legal aid, would be better off.

At the same time, if corporations — and not just law firms, now structured as partnerships — could provide legal representation, their technological sophistication and economies of scale could offer much more affordable services than established law firms do. These firms, in turn, would have to reduce prices to compete.

Of course, lower legal prices would cause new law school graduates to be paid less, but more jobs would be available for such graduates because the demand for lawyers would increase. And new graduates would begin their careers with less law-school debt, because alternative providers of legal education would force law schools to reduce tuition.

See also his recent coauthored book on this subject.

I have made similar arguments in previous posts, here, here, here, and here. In this post, I explained why it’s better to eliminate the bar exam requirement than try to reform it.

To be clear, neither Winston nor I are suggesting that either law schools or bar exams should made illegal. We merely advocate eliminating the laws forbidding people to practice law without having these two credentials. Consumers, however, might still prefer lawyers who have gone to law school and/or passed a bar exam to those who have not. Moreover, with their legal monopoly gone, law schools will have incentives to provide better legal education and bar associations will have stronger incentives to design tests that really do correlate well with future performance as a lawyer. Voluntary certification has many advantages over the present bar exam system, some of which I covered here:

Voluntary certification is another useful tool for consumers. If state-mandated bar exams were abolished, both bar associations and other private groups would still be free to certify lawyers using either tests or other standards they deem appropriate. If lawyers certified by the bar association are generally more competent than others, sophisticated clients will soon realize that, and the knowledge will quickly trickle down to less sophisticated ones. Over time, lawyers certified by the bar association will command higher salaries and enjoy more prestige than those who are not.

Superficially, voluntary certification seems little different from the old bar exam system. After all, lawyers would still have incentives to meet standards established by some professional organization. However, there are three big differences. First, abolishing state-mandated exams allows different certification systems to compete against each other. This stimulates improvement in standards over time and also increases consumer choice. Second, since no certifying body will have a monopoly, these groups will have strong incentives to improve the quality of their certification systems. If the bar association’s certification system turn out to be inferior to that of the Better Business Bureau, for example, fewer consumers will pay attention to it, and fewer lawyers will pay to take the bar association’s test. For this reason, a bar association that didn’t have a legal monopoly on certification is likely to produce a better test than one that does.

Finally, with multiple certification systems, we would no longer have to have a “one size fits all” system that sets standards for all lawyers and all clients. It could well be that Certification A better meets the needs of some clients, while others have reason to prefer B, and still others need no certification system at all.

Market competition and voluntary certification might not be able to eliminate all need for regulation of lawyer quality. For example, there is the issue of what to do in situations where clients have no real choice, as in the case of court-appointed lawyers for indigent criminal defendants. However, it does obviate the need for crude licensing regimes such as the bar exam that completely block access to the profession to anyone who doesn’t pass.

With U.S. News rankings due out tomorrow, I thought I’d repeat part of a post from two years ago.

First, U.S. News has several methodological problems. E.g.:

Consider how U.S. News ranked part-time programs [for the first time in 2009]–it sent out a survey asking professors and deans to list fifteen schools with outstanding part-time programs. I am rather confident that no more than a tiny percentage of those who responded to this question are familiar with the particularities of different schools’ part-time programs. Unlike some of our worthy competitors, for example, at George Mason (ranked 5th in the part-time rankings) ALL tenured and tenure-track professors teach in the evening, and evening students are eligible for all students activities including law review. I can’t imagine why a professor at, say, Valparaiso Law School, would be aware of such details, but U.S. News didn’t bother to even attempt to take such factors into account. [As suggested below, the best way to rank the relative desirability of part-time programs is by the LSAT scores of matriculating students.]

Advice for prospective law students:

There are three groups of law schools: the handful of truly “national” law schools, which place almost everywhere; the somewhat larger group of “strong academic” law schools, which place many graduates regionally but also have the reputation to get you a job elsewhere with a little legwork; and the regional law schools, which don’t have placement pull nationally but place their grads locally, often with great success. If you have been admitted only to regional law schools, rankings and the such should be almost entirely irrelevant to you; you should be attending law school in the city in which you would like to live and practice.

The only ranking you should consider with any seriousness:

If you must rely on ranking and desire a superior alternative to U.S. News, look at matriculating students’ LSAT scores. The wisdom of crowds suggests that tens of thousands of law students making hundreds of thousands decisions about accepting and rejecting offers of admission, taking into account everything that prospective law students take into account–location, academic reputation, faculty quality, clinics, placement, specialties, cost, and so forth–provide far more useful information than the hamhanded U.S. News rankings. And unlike GPA, LSAT scores are both a reasonable proxy for student quality (at least when considered across an entire school’s student body) and are not really manipulable by the law schools. [Addendum: You should also consider bar passage rates; no sense spending three years and 100K only to find yourself unemployable as an attorney. And if you are admitted to a law school with LSATs significantly below the schools' median, for whatever reason, you should ask very directly what percentage of students with LSATs within a couple of points of yours have successfully completed law school and passed the bar over the past decade. If the school won't tell you, go somewhere else. LSAT scores don't predict law school performance that well overall, but law school administrators know that that LSATs below a certain lever tend to be highly predictive of failure at their school--but admit students with such LSAT scores anyway.]

Of course, no student is the average student, and anyone about to devote three years and a lot of money to law school should consider how his individual interests and needs may vary from the median. But as a rough approximation as to the true desirability of a law school, I don’t think you can go very far wrong with LSAT scores.

UPDATE: Over the years, I’ve met quite a few prospective law students who express an interest in practicing “international law” [by which, to be clear, neither they nor I mean representing clients in U.S. courts in matters that happen to have an international component.] I always ask, “Do you speak any foreign languages?” “Have you ever lived abroad?” “Do you have the sort of LSAT score that will get you into one of the nation’s top law schools?” The answers are almost always “no,” “no,” and “no.” I then politely try to disabuse them of the notion that there is a significant chance that a monolingual graduate of a middling law school with no international experience will find a job in “international law,” public or private. It’s a simple matter of supply and demand. If you fall into this category, consider yourself warned.

In a thoughtful response to my recent post on the bar exam, prominent criminal lawyer Nathaniel Burney agrees with my view that the current bar exam system is flawed, but argues that the best solution is to adopt a new and better exam:

We are not fans of the bar exam, either, but we think the solution is not to abolish the exam, but more and better bar exams.... Nobody in their right mind believes that the bar exam is a reliable indicator of who is going to make a good lawyer. It doesn’t test judgment, reasoning or understanding. More importantly, it doesn’t test actual skills that lawyers need to know....

Instead, the bar exam should be replaced with a series of exams for something along the lines of board certification in medicine. You want to practice criminal law? Someone’s life and liberty is going to be on the line. You’d better prove you know what you’re doing, and get bar-certified to stand up in a criminal courtroom. Or you say you want to be a transactional lawyer? People’s assets and livelihoods will be at stake. You’d better be able to prove you know how to put together a deal that does what the client needs, and get bar-certified.

Burney’s proposed exam system might well be better than the status quo. But I see no reason to believe that bar associations would ever adopt a system whose goal is to protect consumers rather than advance the interests of incumbent lawyers. Even if the bar exam were written by a more objective body, it would still be vulnerable to “capture” by lawyers, and still likely to be inferior to market mechanisms as a means of weeding out bad attorneys.

I. Why Bar Associations Can’t be Trusted to Run Mandatory Bar Exams.

As Burney points out, bar associations are not neutral experts on law. Rather, they are interest groups representing currently licensed lawyers who have a strong incentive to try to reduce competition by making entry into the profession difficult. This helps explain why the bar exam requires applicants to memorize thousands of rules that most lawyers will never use. This approach weeds out people who lack the time, patience, or talent for memorization needed to learn all that arcana. In Burney’s words “[t]he legal profession is a cartel ... [W]e have absolute control over entry into our ranks, the rules by which we operate, and even the laws that would apply to us and their enforcement.” Like any other cartel, it’s no surprise that we lawyers use our monopoly power to try to reduce competition and increase our own incomes.

It’s possible that bar association leaders will suddenly decide to prioritize the public interest ahead of their members’ interests. But I wouldn’t bet on it. As Burney puts it, “We need to make sure that the members of our profession are up to the task. Weed out the incompetent. We’re not doing that now. We’ve never really done that.” [emphasis added]. If “we’ve never really done that” in the hundred year history of bar exams, it seems highly unlikely that we are going to start now.

II. The Independent Regulatory Agency Alternative.

One possible alternative to bar exams administered by bar associations are exams developed by independent regulatory agencies. In theory, they could be free of control by lawyers and thus more likely to focus on protecting consumers. But even an independent bar exam agency is likely to be “captured” by lawyers through lobbying. Because of collective action problems and rational political ignorance, the general public is unlikely to effectively monitor the bar exam agency. Lawyers, by contrast, are a well-organized interest group with a strong incentive to flex their lobbying muscle over this issue. Extensive research shows that it is common for independent occupational licensing agencies to be captured by the professions they seek to regulate. Morris Kleiner’s recent book has a good summary of the relevant evidence. Still, an independent bar exam agency would be at least somewhat better than just handing over control to lawyers. It might, for example, be marginally more open to influence by consumer groups.

Even if the independent regulatory agency could be completely insulated from lobbying by lawyers, its tests are still likely to have important shortcomings. One is that lawyer “competence” is not a binary variable in which either you’re competent or you’re not. Rather, there are different degrees of competence. Some low-quality lawyers lack the skill needed to handle complex cases and transactions, but are knowledgeable enough to handle very simple ones. Many such people could well end up failing even a well-designed bar exam. Yet keeping them out of the market would harm consumers by driving up the cost of the simple but important basic legal services they can provide. This is a crucial point, since one of the main flaws of the current system is the very high cost of simple legal services, which is especially damaging to the poor.

Second and related, consumers in many markets are willing to trade off quality for price. Only the individual consumer himself can really know how much he values the one relative to the other. A poor quality lawyer who flunks a well-designed bar exam may still be better than no lawyer at all; and some clients could reasonably prefer to hire him at a low price relative to hiring a better practitioner that costs more. No regulatory agency can really know how a variety of different consumers would make such tradeoffs, especially since there will be great variation in preferences. Inability to take account of varying consumer preferences is a standard flaw of paternalistic policies.

III. Market Competition and Voluntary Certification.

The main fear that many have about abolishing the bar exam is that consumers will have no way of assessing lawyer quality without becoming legal experts themselves. Most clients don’t know much about law, after all.

However, markets have numerous tools for dealing with this problem without resorting to government-mandated licensing. The most obvious is reputation. Clients can’t directly assess a lawyer’s competence. But they can learn about his reputation from other lawyers, previous clients, and others. Law firm brand names are also useful. If I hire Wachtel or Cravath, I may not know much about the individual lawyers who will work on my case. But I do know that the firm has a strong reputation overall, and that they have powerful incentives to hire lawyers who will uphold it. Less sophisticated clients can also piggyback on the knowledge of better-informed ones.

Voluntary certification is another useful tool for consumers. If state-mandated bar exams were abolished, both bar associations and other private groups would still be free to certify lawyers using either tests or other standards they deem appropriate. If lawyers certified by the bar association are generally more competent than others, sophisticated clients will soon realize that, and the knowledge will quickly trickle down to less sophisticated ones. Over time, lawyers certified by the bar association will command higher salaries and enjoy more prestige than those who are not.

Superficially, voluntary certification seems little different from the old bar exam system. After all, lawyers would still have incentives to meet standards established by some professional organization. However, there are three big differences. First, abolishing state-mandated exams allows different certification systems to compete against each other. This stimulates improvement in standards over time and also increases consumer choice. Second, since no certifying body will have a monopoly, these groups will have strong incentives to improve the quality of their certification systems. If the bar association’s certification system turn out to be inferior to that of the Better Business Bureau, for example, fewer consumers will pay attention to it, and fewer lawyers will pay to take the bar association’s test. For this reason, a bar association that didn’t have a legal monopoly on certification is likely to produce a better test than one that does.

Finally, with multiple certification systems, we would no longer have to have a “one size fits all” system that sets standards for all lawyers and all clients. It could well be that Certification A better meets the needs of some clients, while others have reason to prefer B, and still others need no certification system at all.

Market competition and voluntary certification might not be able to eliminate all need for regulation of lawyer quality. For example, there is the issue of what to do in situations where clients have no real choice, as in the case of court-appointed lawyers for indigent criminal defendants. However, it does obviate the need for crude licensing regimes such as the bar exam that completely block access to the profession to anyone who doesn’t pass.

UPDATE: Some commenters doubt that bar exams really keep out a significant number of would-be lawyers. However, the National Council of Bar Examiners reports that 32% of bar exam takers failed in 2009. And that doesn’t count people who chose not to attend law school or take the bar exam in the first place because they knew they lack the talent for memorization needed to pass and therefore don’t want to waste time and money trying.

Richard Epstein and John Yoo have responded to Elizabeth Wurtzel’s critique of the bar exam, which I previously commented on here. Surprisingly, Epstein comes to the defense of the bar exam:

There is a good reason why some Yale Law School graduates fail the bar. They do not learn enough law in law school to carry them through the tedium of the bar examination. It is a real black mark against my alma mater (class of 1968) that so many of its students do not take enough core courses to know law. It is also a mistake to think of the law as a set of senseless rules. The students who fail the bar can’t work with any set of rules. There are virtually no students at the top of the class who don’t pass the bar.

John Yoo disputes Epstein’s position:

[J]ust because Yale doesn’t train practicing lawyers doesn’t mean that a) law schools in general are good at it, or b) that the bar exam has any real relationship to one’s success as a lawyer. Most students no matter where they go, I believe, pay thousands of dollars after graduation to attend cram courses to prepare for the bar exam. Only a hardy (or foolhardy) few, I bet, dare take the bar based on what they learned in school....

[The bar exam] has little to do with whether someone will make a good lawyer. I knew someone in law school with a photographic memory — he could recite exactly the text of a case after reading it once (or, more importantly, the pages from a cliff notes summary of the case). But he couldn’t adapt that memorized rule to a new set of facts, which is what law practice will require; his mind didn’t work that way. So even if Liz Wurtzel failed the bar exam, I bet it has little predictive value for her lawyer skills.

This is one of those rare instances where I agree more with Yoo than with Epstein. It is simply not true that “students who fail the bar can’t work with any set of rules.” The bar exam doesn’t test your ability to “work with rules” in any serious way. Rather, it is primarily a test of memorization skills. To pass, you must memorize thousands of arcane rules, most of which you will never again use as a practicing lawyer. True, the exam sometimes makes you apply the rules to very simple fact patterns. But I suspect that most of those who fail the bar did so not because they couldn’t apply rules they knew, but because they simply couldn’t remember what some of the rules were. As I pointed out in this post, most successful practicing lawyers could not pass the bar if forced to take it again without spending many hours studying.

Many people who aren’t good at memorization can still work with rules effectively in law practice. And, as Yoo notes, some people who pass the exam easily because they are excellent memorizers will turn out to be poor lawyers. Epstein may be right that “[t]here are virtually no students at the top of the class who don’t pass the bar.” But many students from the middle or bottom of the class do fail, and many of them could still have been reasonably competent lawyers, even if they are poor memorizers.

It is also worth noting that law is a profession with a great deal of specialization. Few if any lawyers ever deal with more than a fraction of the many subjects covered on the bar exam. A person who lacks the memorization skills or the patience to learn by heart thousands of rules across many areas of law can still master a specific area of law well enough to give good legal advice in that field.

Finally, I should perhaps mention that I passed the bar with little difficulty, without taking a prep course. That was in part because I’m very good at memorization. But I soon saw that my skill at memorizing large numbers of legal rules wasn’t especially useful either in my work as a law professor or in the various pro bono and consulting projects I did in practice. It did help somewhat, but only very modestly. As a practical matter, modern technology makes it easy to look up any relevant arcane rules I may have forgotten. And it would be foolish to rely on memory alone anyway, since there’s always a small chance that I remembered something incorrectly. Being a good memorizer did little to make me a good lawyer. Conversely, bad memorizers aren’t necessarily bad lawyers.

A test of memorization skills is therefore a poor way to weed out the wheat from the chaff among would-be lawyers. It’s certainly not likely to be nearly as effective as market competition. In the unlikely event that passing the bar really were a strong predictor of legal competence, there would be no reason for government to mandate it. Consumers of legal services would demand it anyway, or at least pay a premium for lawyers who have that credential relative to those who don’t.

At the Brennan Center for Justice, Elizabeth Wurtzel makes the case for abolishing the bar exam:

In 2005, Kathleen Sullivan, then dean of Stanford Law School, took and failed the California bar exam. After many years in legal academia—Ms. Sullivan literally wrote the book on constitutional law—she was going to practice law and needed a license. Ms. Sullivan has since passed the bar and is a very successful appellate attorney.... If the bar exam was meant to be more than an empty and painful ritual, if the American Bar Association was anything more than an absurd and fusty guild, when Kathleen Sullivan failed the bar, bar administrators might have used Sullivan’s failure to pass the test as the occasion to ask whether, perhaps, something is wrong with the exam and process of bar admission. After all, if the results of the bar exam were meant to matter—if it were meant to predict the likelihood of success as a lawyer—the failure of a great legal mind ought to alarm the people in charge....

But nothing changed.

And there’s a long, proud tradition of gifted attorneys who failed the bar, at least on their first try. Hillary Clinton, Michelle Obama, Franklin D. Roosevelt, Jerry Brown—who is now California’s attorney general—all screwed up once, as I discovered when I myself failed. Both Pete Wilson, the former governor of California, and Antonio Villaraigosa, the current mayor of Los Angeles, took the bar four times; Benjamin Cardozo, one of the greatest justices of the Supreme Court, sat for it six times. Harold Ford Jr. still has not managed to pass the bar in Tennessee—a State in which the curve cannot be terribly dangerous—but that didn’t keep him out of Congress, though he’s been less lucky with the Senate.

Given this simple data point—that many gifted people fail the bar exam while plenty of plucky idiots who you wouldn’t trust to haggle over a parking ticket in White Plains traffic court get through the test with the greatest of ease—it is curious that it endures.

I agree with Wurtzel’s point that the bar exam is primarily a test of memorization that covers huge amounts of material most lawyers won’t need. For this reason, among others, I’m all in favor of abolishing the bar exam myself. If we retain the exam, it at the very least should not be administered by bar associations, which have a vested interest in reducing the number of lawyers so as to increase the demand for their members’ services.

I’m not sure, however, that I agree with all of Wurtzel’s argument. Most of the “gifted people” she mentions had their greatest successes as politicians, not lawyers. It’s perfectly possible to be a great politician while also being a poor lawyer. Moreover, it’s hard to evaluate a system that tests thousands of applicants on the basis of a few individual cases that could be atypical.

I also disagree with Wurtzel’s view that government needs to adopt various policies to reduce the number of lawyers (which of course is the main real function of bar exams):

There are many better ways that the ABA could keep the numbers down in the profession: for instance, while there are only 130 accredited medical schools, there are nearly 250 law schools that have been approved by either the ABA or a state equivalent..... And there are many more students in a law school than a medical school, given the lack of need for cadavers and the like: for instance, the entering class at Harvard Medical School has 165 slots, whereas the 1L class at Harvard Law School contains 550 people. Plainly, the population of legal academia is excessive.

I see no reason why the number of medical schools should have any bearing on the number of law schools, especially since the former is also artificially restricted by regulation. These are two different professions that face different market conditions. More importantly, I think that the high salaries of lawyers combined with the high cost of even very basic legal services show that we have too few lawyers rather than too many, and that the best way to determine the “right” number of lawyers is through market competition, not government mandate. To that end, I would abolish ABA accreditation of law schools as well as the bar exam. As law school faculty and administrators who have gone through the ABA accreditation process know, many of the ABA’s requirements add nothing to the quality of legal education, and are just as ridiculous as the more arcane questions on the bar exam.

Both the ABA and state bar associations have strong incentives to regulate the profession in ways that reduce competition for their members rather than benefit consumers of legal services. If we must have government-mandated accreditation and licensing (which I doubt), it should at least be conducted by independent agencies insulated as much as possible from lobbying by the organized bar. Giving lawyers the power to exclude potential new members of their profession is much like giving Ford and GM the power to exclude new car manufacturers from the market.