3 ms·

The disgrace of the legal services market

24 points by cwan 16y ago

weel 16y ago
To give any legal advice, you must be a licensed attorney, which requires that you pass the bar exam, which requires (in most states) that you attend an ABA accredited law school. This system limits the supply of lawyers, which drives up their wages. That's bad. But what is also bad is that it allows the ABA to impose its priorities on law schools. (http://goo.gl/tosb http://goo.gl/tosb etc.) And don't even get me started on the restrictions on law firms taking outside capital.
- rfrey 16y ago
  Are you saying there's a scarcity of lawyers? Last I saw, the ABA said there were >1.2 million lawyers in the USA, or one for every 255 people.
  - ahi 16y ago
    +1, a lot of top tier graduates have been having trouble finding positions the last couple of years.
karzeem 16y ago
Government licensing is a surprisingly pervasive way of driving up wages in a profession. In my home state of Maryland, you need a license from the state in order to be a barber. Lawyers have it especially good for a couple reasons. First, they (and thus their interests) are well-represented in the ranks of people who make laws, so the laws on who gets to practice law are very restrictive. Second, legal services are one of a small handful of things that you can be forced to spend money on. Nobody forces you to buy an iPhone. But getting sued is something that happens against your will, and when it happens you have little choice but to spend money on a lawyer.
- tomjen3 16y ago
  Ha you think that is bad - in Florida you have to get a license to be a floral decorator. I do wonder how they got that one past the law makers.
  - hugh3 16y ago
    It's amazing what you can get people to do by sending them some flowers.
    - zackattack 16y ago
      Or sending them an AwesomenessReminder :-)
- dockd 16y ago
  I think it's very common to require a license for any job that involves touching other people: barber, massage therapist, cosmetologist. In Oregon, you need a food handler's permit to work in a restaurant. I wouldn't call that a barrier to entry.
- bd_at_rivenhill 16y ago
  First, they (and thus their interests) are well-represented in the ranks of people who make laws This is the most understated assertion I've seen in while, congratulations. I would actually say that the legal profession in the US is the most extreme example of regulatory capture that has ever been seen.
nroach 16y ago
The article was insightful, and describes some of the problems, but is short on solutions. A seemingly good solution would be to allow limited-scope representations with more frequency that is common at present. In Texas, this is permitted by Texas Disciplinary Rule of Professional Conduct 1.02(b) states, "A lawyer may limit the scope, objectives and general methods of the representation if the client consents after consultation." However, many lawyers are still hesitant to "help out" citizens who want to handle a case themselves but just need pointers. This is in part because many state bars historically don't condone reduced-fee or "partial" representation. It's assumed by many that if a lawyer helps someone with a case, no matter how slightly, they have created an "attorney client relationship" and are then obligated to provide full representation for that case. Obviously, a lawyer isn't going to be comfortable doing an hour or two of work if it means he or she will be committed to being "on the hook" for the entire rest of that matter. My 2c is that we need clear-cut rules for the legal profession that allow limited scope representations without implied obligations of full representation. You can sort of get there now in some states by being very clear in your representation agreement, but the fear of the state bar or an upset client bringing a grievance is a significant concern. But, with a limited-scope representation you have to think about how that sort of thing gets explained to a client. For example, assume a) the client is defending him/herself against a lawsuit b) a lawyer agrees to "give" the client four hours of consultation on the case at half their normal rate c) the client goes into court and loses Does the client now have the right to come back and sue the lawyer because they didn't learn everything in the 4 hour consult that they would have if the lawyer had been on their side full time? Is it malpractice for the lawyer to cut off the representation when the second hand ticks past 4 hours? What if the lawyer knew that there were other issues that would take eight hours to explain? Are they now obligated to provide another four for free? It's those kind of questions that have led many bar associations to draw relatively bright lines in the sand, even if they seem to be inefficient and draconian. In the end, I think limited scope representation should be allowed, as long as the expectations are clearly communicated up front. But, that's easier said than done.
- noonespecial 16y ago
  If you think about it, medical doctors face almost exactly the same problem. I think medicine has handled things a little better by creating a system of referrals and domain experts and by training specialized workers (nurses and paramedics) with clearly defined roles that do a large part of the work under supervision at lesser cost. Legal 'nurses' (paralegals with specialized training in certain areas of law) might help things immensely. Doctors have a PR advantage though. Most people think of doctors as highly scrupulous individuals and give them the benefit of the doubt. The way some lawyers (and whole branches of legal practice) have conducted themselves have lead to a bit of a PR problem. A law practice has the (often unjustified) whiff of dishonesty and underhanded dealing to it, not unlike used car salesman. People just expect to be overcharged and undeserved and are more than eager to cry foul whenever they don't get the outcome they desire. This makes lawyers extra (perhaps over-) careful. This will probably need to be fixed as part of the solution. Medicine has set up an exceptional system to distribute expertise efficiently and to diffuse and insure against its outsized liability that the law profession might do well to investigate.
deleted 16y ago
[deleted]
gamble 16y ago
The most bizarre aspect of law school is that students take on enormous debts even though they don't actually learn how to practice law. It isn't the sign of a healthy market when there are a huge number of people who can't afford representation and a huge group of unemployed lawyers.
ahi 16y ago
I am on the board of housing nonprofit. Despite being real nice, we still have to take people to court to get an eviction processed occasionally. $250 a pop. $250 to fill out a form and bring copies of the lease and late notice to the courthouse. If I recall correctly we can only recover ~$60 of court/lawyer fees from the debtor so it is often cheaper for us to ignore a debt. Part of the problem for us is that our general manager is a lawyer, so he puts a premium on "building a relationship with a legal professional". I suspect this is the case for the rest of the market where in house counsel is reviewing compensation for the firm they just left.
- ahi 16y ago
  This is one of my pet peeves so I need to elaborate a bit. In our jurisdiction, renters have some decent protections which make it a pain in the ass to evict them (as it should be). Unfortunately, because of the ridiculous lawyer fees everybody but the lawyers lose. By the time a renter reaches eviction they have racked up so many lawyer fees that even if they can now pay rent they won't be out of the hole. Their credit is going to be ruined anyway so they skip out and don't bother paying what they owe to the landlord. So now the renter has screwed up credit and loses their home, and the landlord has an empty apt, loses out on rent and lawyer fees while the renter could have paid off the debt! In other words, the lawyers charge so much they make the law irrelevant. No one wants to get them involved at all. There are many people in my life I love who happen to be lawyers, but there are lawyer jokes for a reason.

24 points by cwan 16y ago

weel 16y ago

To give any legal advice, you must be a licensed attorney, which requires that you pass the bar exam, which requires (in most states) that you attend an ABA accredited law school. This system limits the supply of lawyers, which drives up their wages. That's bad. But what is also bad is that it allows the ABA to impose its priorities on law schools. (http://goo.gl/tosb http://goo.gl/tosb etc.) And don't even get me started on the restrictions on law firms taking outside capital.

rfrey 16y ago
Are you saying there's a scarcity of lawyers? Last I saw, the ABA said there were >1.2 million lawyers in the USA, or one for every 255 people.
- ahi 16y ago
  +1, a lot of top tier graduates have been having trouble finding positions the last couple of years.

karzeem 16y ago

Government licensing is a surprisingly pervasive way of driving up wages in a profession. In my home state of Maryland, you need a license from the state in order to be a barber. Lawyers have it especially good for a couple reasons. First, they (and thus their interests) are well-represented in the ranks of people who make laws, so the laws on who gets to practice law are very restrictive. Second, legal services are one of a small handful of things that you can be forced to spend money on. Nobody forces you to buy an iPhone. But getting sued is something that happens against your will, and when it happens you have little choice but to spend money on a lawyer.

tomjen3 16y ago
Ha you think that is bad - in Florida you have to get a license to be a floral decorator. I do wonder how they got that one past the law makers.
- hugh3 16y ago
  It's amazing what you can get people to do by sending them some flowers.
  - zackattack 16y ago
    Or sending them an AwesomenessReminder :-)
dockd 16y ago
I think it's very common to require a license for any job that involves touching other people: barber, massage therapist, cosmetologist. In Oregon, you need a food handler's permit to work in a restaurant. I wouldn't call that a barrier to entry.
bd_at_rivenhill 16y ago
First, they (and thus their interests) are well-represented in the ranks of people who make laws This is the most understated assertion I've seen in while, congratulations. I would actually say that the legal profession in the US is the most extreme example of regulatory capture that has ever been seen.

nroach 16y ago

The article was insightful, and describes some of the problems, but is short on solutions. A seemingly good solution would be to allow limited-scope representations with more frequency that is common at present. In Texas, this is permitted by Texas Disciplinary Rule of Professional Conduct 1.02(b) states, "A lawyer may limit the scope, objectives and general methods of the representation if the client consents after consultation." However, many lawyers are still hesitant to "help out" citizens who want to handle a case themselves but just need pointers. This is in part because many state bars historically don't condone reduced-fee or "partial" representation. It's assumed by many that if a lawyer helps someone with a case, no matter how slightly, they have created an "attorney client relationship" and are then obligated to provide full representation for that case. Obviously, a lawyer isn't going to be comfortable doing an hour or two of work if it means he or she will be committed to being "on the hook" for the entire rest of that matter. My 2c is that we need clear-cut rules for the legal profession that allow limited scope representations without implied obligations of full representation. You can sort of get there now in some states by being very clear in your representation agreement, but the fear of the state bar or an upset client bringing a grievance is a significant concern. But, with a limited-scope representation you have to think about how that sort of thing gets explained to a client. For example, assume a) the client is defending him/herself against a lawsuit b) a lawyer agrees to "give" the client four hours of consultation on the case at half their normal rate c) the client goes into court and loses Does the client now have the right to come back and sue the lawyer because they didn't learn everything in the 4 hour consult that they would have if the lawyer had been on their side full time? Is it malpractice for the lawyer to cut off the representation when the second hand ticks past 4 hours? What if the lawyer knew that there were other issues that would take eight hours to explain? Are they now obligated to provide another four for free? It's those kind of questions that have led many bar associations to draw relatively bright lines in the sand, even if they seem to be inefficient and draconian. In the end, I think limited scope representation should be allowed, as long as the expectations are clearly communicated up front. But, that's easier said than done.

noonespecial 16y ago
If you think about it, medical doctors face almost exactly the same problem. I think medicine has handled things a little better by creating a system of referrals and domain experts and by training specialized workers (nurses and paramedics) with clearly defined roles that do a large part of the work under supervision at lesser cost. Legal 'nurses' (paralegals with specialized training in certain areas of law) might help things immensely. Doctors have a PR advantage though. Most people think of doctors as highly scrupulous individuals and give them the benefit of the doubt. The way some lawyers (and whole branches of legal practice) have conducted themselves have lead to a bit of a PR problem. A law practice has the (often unjustified) whiff of dishonesty and underhanded dealing to it, not unlike used car salesman. People just expect to be overcharged and undeserved and are more than eager to cry foul whenever they don't get the outcome they desire. This makes lawyers extra (perhaps over-) careful. This will probably need to be fixed as part of the solution. Medicine has set up an exceptional system to distribute expertise efficiently and to diffuse and insure against its outsized liability that the law profession might do well to investigate.

deleted 16y ago

[deleted]

gamble 16y ago

The most bizarre aspect of law school is that students take on enormous debts even though they don't actually learn how to practice law. It isn't the sign of a healthy market when there are a huge number of people who can't afford representation and a huge group of unemployed lawyers.

ahi 16y ago

I am on the board of housing nonprofit. Despite being real nice, we still have to take people to court to get an eviction processed occasionally. $250 a pop. $250 to fill out a form and bring copies of the lease and late notice to the courthouse. If I recall correctly we can only recover ~$60 of court/lawyer fees from the debtor so it is often cheaper for us to ignore a debt. Part of the problem for us is that our general manager is a lawyer, so he puts a premium on "building a relationship with a legal professional". I suspect this is the case for the rest of the market where in house counsel is reviewing compensation for the firm they just left.

ahi 16y ago
This is one of my pet peeves so I need to elaborate a bit. In our jurisdiction, renters have some decent protections which make it a pain in the ass to evict them (as it should be). Unfortunately, because of the ridiculous lawyer fees everybody but the lawyers lose. By the time a renter reaches eviction they have racked up so many lawyer fees that even if they can now pay rent they won't be out of the hole. Their credit is going to be ruined anyway so they skip out and don't bother paying what they owe to the landlord. So now the renter has screwed up credit and loses their home, and the landlord has an empty apt, loses out on rent and lawyer fees while the renter could have paid off the debt! In other words, the lawyers charge so much they make the law irrelevant. No one wants to get them involved at all. There are many people in my life I love who happen to be lawyers, but there are lawyer jokes for a reason.