Why are lawyers so expensive?

Vladimir Vinokurov is a solicitor and a deputy Victorian State director of the Australian Taxpayers’ Alliance. The views expressed here are his own.

Vladimir Vinokurov is a solicitor and a deputy Victorian State director of the Australian Taxpayers’ Alliance. The views expressed here are his own.

Everyone complains about the cost of lawyers, but few look at the cause: occupational licensing laws. Occupational licensing requires anyone who intends to become lawyer to comply with a range of requirements to practice law. These including studying a law degree that is too long, formally applying for “admission” into the profession in an unnecessary ceremony, as well as meeting cumbersome training and supervision requirements that are sometimes unnecessary. These requirements cost law students years of time and tens of thousands of dollars to comply with. The more expensive it is to become a lawyer, the fewer lawyers there will be and the more they can charge. There can be no doubt that this partly explains why lawyers are expensive.

The sheer expense of hiring a lawyer undermines the individual right to obtain legal representation. It means that hiring a competent, effective lawyer can be unaffordable for poorer members of the public. Even wealthier people may find their resources drained by legal fees. The expense of becoming a lawyer also undermines the right to pursue a career of one’s choice, especially poorer students who lack the financial support to study full-time for years and comply with red tape. Lastly, these laws reduce the quality of legal services. The fact that competent would-be lawyers are being excluded from the profession means that existing lawyers have less incentive to operate competently because they have less competition.

The problem starts with the law degree, which must include 11 “core compulsory subjects” but takes three years of full-time study to complete as a result. The degree costs about $10,000 per annum with government subsidies and more without them. Many solicitors may never encounter some of those subjects in practice. Few lawyers practice in constitutional or administrative law. Some solicitors exclusively practice in criminal law or commercial law. Only some do both. It is simply not necessary to study them all in order to practice law. Students should have the choice of studying criminal law and procedure, commercial law subjects or both. Splitting up the degree will reduce costs and create new pathways to legal practice.

But the red tape doesn’t stop there. Graduates must undertake “practical legal training” before they can practice law. They must pay several thousands of dollars to learn what they otherwise should be learning as junior lawyers. If they are not, they can take the course. The problem is that everyone is forced to take it whether or not they have learnt the basics of legal practice. Even experienced overseas barristers have been forced to undertake this training. Forcing this requirement on everyone is unnecessary and wasteful.

Formal admission ceremonies further increase costs. As of 2015, Victorian admission ceremonies alone cost $926. This is a substantial hit to the savings of many graduates. The ceremonies take place monthly, but applicants must apply months in advance to become admitted—further delaying their careers. In the meantime they are simply expected to make ends in meet.

The restrictions pile on after admission. As of 2011, would-be barristers must pass a bar exam and undertake a 2 month readers course, costing thousands of dollars in total, to practice. The exam is unnecessary: barristers typically spend hours to prepare for specific cases, and thinking up answers on the spot will not get you far in the courtroom. Moreover, the exam covers material that graduates may have just covered at university. It’s no wonder practising barristers, even junior barristers, weren’t required to sit the exam: it has nothing to do with upholding standards.

Similarly, solicitors are required to practice for two years under the supervision of another lawyer before they can do so independently—unless they are overseas, or happened to open a practice before that rule was imposed. The inconsistencies in these requirements expose both their arbitrariness and their actual purpose: keeping people out of the profession.

Running a law firm is also unnecessarily cumbersome. By law, all practitioners must obtain “practising certificates” and insurance coverage from a single government-appointed insurer. A competitive insurance field would reduce costs. On top of that, barristers must buy robes and wigs. Costumes can cost thousands. Renting chambers (if practitioners choose to do so) and paying for practising certificates and insurance every year, taken together, costs thousands more.

While there is a great deal of concern about the supposed oversupply of law graduates, the simple fact of the matter is that they are legally forbidden from working without complying with these requirements. The expense of doing so means they cannot compete with established practitioners, which brings prices up.

It is also hard to argue that these regulations protect the public, given that so many current practitioners were exempt from them when they entered into the profession.

By contrast, deregulation will help society at large—especially the poor. Legal fees are just one factor at the margin that can lead to financial insecurity. Reducing costs will help those who are financially at risk.

Nor are regulations the only way to protect the public. Lawyers’ societies could still accept, reject or expel members on the basis of reputation, skill, honesty or competence just as the regulators do now. Ratings systems and online review websites  can also serve an important role in keeping the profession honest. These measures are informative and cost effective. Lastly, in serious cases incompetent lawyers can still be sued by clients for breach of contract, just as they are today.

Those concerned about upholding the standards of the profession forget that some legal work is already competently performed by non-lawyers with knowledge of the law. Tax agents and accountants, police prosecutors, patent attorneys, and industrial advocates all provide legal representation in their chosen fields right now. Indeed there are prosperous, stable nations with reliable justice systems like Sweden and Finland in which anyone can practise law without a licence. There is no reason why Australia cannot adopt a similar system for lawyers or other trades and professions, for that matter.

The case for deregulation is clear: it empowers the poor, the public as a whole and law students. Occupational licensing laws must be repealed. The law must recognise that for many lawyers, the years of study and tens of thousands of dollars spent obtaining a licence to practice is unnecessary.

The Importance of Social Conservatism

Tim-Andrews

Tim Andrews writes on why libertarians ought embrace social conservatism. 

So! I think the time has come for me to once again alienate everyone who reads this blog, and raise the ire of conservatives and libertarians alike! 🙂

I do this for a very simple reason. Specifically, I do not think most conservatives understand just why achieving their aims through the coercive power of the state is totally counterproductive, and, more pertinently at the moment, I am rather convinced that libertarians in Australia don’t realise the importance of social conservatism to achieve their aims. Which is not only strategically to our detriment, but something that, on the random off chance of a libertarian revolution, will lead to a social catastrophe of epic proportions.

Allow me to explain.  Even if we ignore the fringe elements of the now thoroughly-discredited liberaltarian movement (those people who seem to advocate rank hedonism as a necessary lifestyle choice) almost all libertarians have taken a very similar position on social matters: “You run your life how you want to, it is no business of mine as long as the state is not involved.” Which is a nice ideology in theory, but in practice, I worry that it is one that shall degenerate into total and utter failure. Because with the moral vacuum caused by the exodus of government, unless something comes in to take its place, society shall go to hell in a handbasket. In the same way that the years immediately following the collapse of communism in the USSR led to morally repugnant economic practices, I fear the same may happen in social matters if we achieve our aims, but are not careful about how we do so. Indeed, the older I get, the more I find the traditional libertarian position unsatisfactory, and somewhat of a cop-out.  To deny the real problems of broken families, of drug abuse, of the consequences of actions – this is naivety at the extreme. Which is why the only possible way libertarianism can succeed in the political sphere is by combining it with social conservatism in the personal/societal one. For if we do not do so, we shall have a world without shame, a world where everything goes. And a world that shall rapidly become a nightmare.

The impetus for this post of mine was Andrew Bolt’s piece today. I quote:

But I’d like to know how she was allowed to so forget herself and her dignity—to forget why it was shameful to get drunk, smoke dope, drive too fast, abuse the helpless or leave our children far behind in our wake.

I can’t believe that she did all this forgetting by herself. Oh no, not at all.

Maybe a generation or three ago, someone like her would at least have had a priest in her ear once a week booming: remember! “Thou shalt not.’’

Now, of course, most priests find the only people who turn up on Sundays are too creaky to need tying down with sermons.

No, these days the young and frisky must get their little homilies from government advertising instead—30-second messages of don’t smoke, don’t be a bloody idiot, don’t gamble, and talk to your children.”

Mr. Bolt has a point that I think far too many libertarians ignore. As a society, we need constraints and strictures on people’s behavior. Libertarians rightly believe that these should not come from the State, but most of us pay little attention to the fact that something must fill the void.

Allow me to simply sketch out one example, that of the War on Drugs. The use of the coercive power of the state to forbid people from taking drugs – quite literally at gunpoint – is, in my mind, morally reprehensible. However, no-one in their right mind could argue that a drug-fueled society is one that shall be good for all. Sure, some people can handle drugs in the way there are functioning alcoholics, but for the most part, it is a net societal ill, and the more it can be minimized, the better off we all are. Hence why social pressures are so important. If we, as libertarians, want to get the state out of legislating morality, then we must take care to prop up social structures that take its place.

I have already discussed at length how government regulation is the root cause of most things social conservatives find abhorrent, and  how by reducing the size and scope of government most social conservative goals will be realised. But I really want to go further than that. I want to argue that the only way we can achieve a society free from government coercion  is by buttressing the social fabric of civil society. Removing the chains of government does not mean every individual should be free to pursue every vice. Rather, it ought mean that civil society should grow up.

As such, libertarians ought not endorse drugs, ought not endorse families out of wedlock, ought not endorse rampant hedonism. Rather, they must do the opposite. They must join forces with their traditional foes – the social conservatives – and recognise that the only way to achieve their policy aims is to ensure our civil society is based on a strong social conservative ethos. Because otherwise, the Sodom and Gomorrah society that shall emerge shall quickly fail and burn.

This isn’t only something that is tactically sound, or something that will ensure greater political gains. Rather, it is the only way we will be able to get a great society to flourish.

 (Tim Andrews is a Washington DC based political consultant, and well as co-founder & Editor of Menzies House. His personal blog is Musings of an Australian Classical Liberal in Washington DC. This was originally posted at Thoughts on Freedom, the official blog of the Australian Libertarian Society)