The conventional wisdom in America is that there are too many lawyers.

In Atlantic and Cape May counties alone, there were 248 offices of lawyers in 2010.

But three economists who studied the lawyer supply think the problem with the legal profession is not enough lawyers, that the cost of legal services would be far lower without what amounts to a cartel run by existing attorneys.

Restrictions on who can practice law begin with the American Bar Association's ability to determine which law schools are accredited, say Clifford Winston and Robert Crandall, of the Brookings Institution, and Vikram Maheshri, of the University of Houston.

Most states give that ABA accreditation the weight of law by requiring a degree from such an institution before someone can practice law.

The economists point out that California doesn't require ABA-accredited degrees or any law degree for that matter, just passing the bar exam. That seems to work for the nation's third-largest state.

Then there's the bar exam itself, a grueling challenge that requires special preparation after graduate school and bears little relation to what lawyers actually do once they're working. The dean of Stanford University's law school famously failed the bar exam in 2005 on her first try as she prepared to enter private practice.

In the book based on their study, "First Thing We Do, Let's Deregulate All the Lawyers," and a Wall Street Journal essay along the same lines, the economists argue that removing these barriers to practicing law would lower the cost of many services and create jobs.

"Allowing accounting firms, management consulting firms, insurance agencies, investment banks and other entities to offer legal services would undoubtedly generate innovations in such services and would force existing law firms to change their way of doing business and to lower prices," Winston and Crandall wrote in the Journal.

They said many legal services such as do-it-yourself wills, uncontested divorce documents and patent applications don't require three years of law school and mastering the bar exam - not when they're already sold by companies such as LegalZoom.com.

In 2000, the average lawyer at a U.S. law firm made $191,000, with a total legal tab for America of $170 billion. The economists figure $64 billion of that cost is due to market distortions caused by regulatory restrictions on the practice of law.

In our region, being a lawyer is one of very few occupations that hasn't suffered much in the economic downturn.

Total wages for lawyers in Atlantic and Cape May counties was $83 million in 2006. In 2010, after the severe recession, it was $82 million, federal Bureau of Labor Statistics data show.

Jobs in law offices in the two counties have fallen from 1,114 in 2006 to 1,080 in 2010.

Lawyers responding to the economists on the American Bar Association website mainly argue that deregulating entry to the practice would allow unscrupulous and unprofessional operators into a crucial field.

Most of the comments are anonymous, and a typical one reads: "Hogwash. There is enough of an over-supply of lawyers to bring downward pressure on prices. And lowering barriers to entry will just bring in more incompetents from subpar diploma mills. Bad idea all around."

Some lawyers, however, agree with the economists.

Alan H. Crede, a Boston lawyer, wrote in his blog that sooner or later the barriers to entry into the law profession will be abolished.

Crede said the argument that people need protection from lesser-quality lawyers makes no more sense than requiring special degrees and exams for public officials.

He said soaring legals fees - now approaching $1,000 an hour for top lawyers and resulting in perhaps $1 billion in legal fees just in the General Motors bankruptcy case - will drive deregulation.

"When corporations feel oppressed by legal fees, they will lobby for stripping away the anticompetitive restrictions that drive up their legal bills," Crede wrote. "It's not a question of if, but when."

Chidem Kurdas, an economist and visiting scholar at New York University, isn't sure that deregulation will yield the hoped-for cost reductions.

Removal of barriers to entry must also address "the special role lawyers have in policymaking and the ease with which they can boost regulation," she said last month on a university blog.

"I'd worry that if there were a significant increase in law school graduates, the country would get further bogged down in regulation that creates demand for legal services," Kurdas said.

Deregulation worked wonders for telecommunications and airlines. It would be a shame if legal deregulation were done in a way that made matters worse.

Contact Kevin Post:

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