Cadillacs, Lawyers, and Sushi

This morning's Times has a story about the Bar Association suing a parent who dared to represent his disabled son in court.  The family didn't have any money, so the father petitioned the court to act on his son's behalf, even though he (the father) was not lawyer.  After the father won the case, the Bar sued, hoping to win a $10,000 fine and to ban the man from helping other parents in similar situations from accessing the courts without representation from a member of The Bar.  Some might shocked by the actions of The Bar, but there's nothing shocking about it -- it's precisely what The Bar Association is supposed to do.  Their raison d'etre  is to keep the barriers to entry of lawyerdom sufficiently high, so that they can keep charging $200/hour to have a paralegal sit in a room and watch boxes of affidavits. As we've said before, one of the biggest issues facing the economy in the future will be dealing with the professional unions, or more appropriately, the professional cartels.  What makes them so worrisome, or so successful if you're looking it at from the point of view of the membership, is that they've created quasi-government roles for themselves.  You can't practice law if you don't past The Bar exam.   You can't do certain things of finance without passing the CFA exams.  It's not a stretch to argue that people who clear the hurdles are somewhat immune to market forces which naturally would deflate their value year after year.

Here's a snippet from Milton Friedman's Capitalism & Freedom:

A story about lawyers will perhaps illustrate the point. At a meeting of lawyers at which problems of admission were being discussed, a colleague of mine, arguing against restrictive admission standards, used an analogy from the automobile industry. Would it not, he said, be absurd if the automobile industry were to argue that no one should drive a low quality car and therefore that no automobile manufacturer should be permitted to produce a car that did not come up to the Cadillac standard. One member of the audience rose and approved the analogy, saying that, of course, the country cannot afford any thing but Cadillac lawyers! This tends to be the professional attitude. The members look solely at technical standards of performance, and argue in effect that we must have only first-rate physicians even if this means that some people get no medical service -- though of course they never put it that way. Nonetheless, the view that people should get only the "optimum" medical service always lead to a restrictive policy, a policy that keeps down the number of physicians. I would not, of course, want to argue that this is the only force at work, but only that this kind of consideration leads many well-meaning physicians to go along with policies that they would reject out-of-hand if they did not have this kind of comforting rationalization.

This is exactly it.  It would be nice if everyone could drive a Cadillac, but were that to be legislated, there would be large swaths of people with no car at all.  It would be nice if everyone could see a doctor for every minor ailment, but because people are required to see a doctor (as opposed to some 2-year trained technician) every time they get an earache, the cost of medicine is prohibitive for many. 

In any market, there are gradations of quality.  You go to Nobu for sushi, I go to M2M and take my box of unagi into the theatre across the street.  We're both happy.  Were the chef at Nobu to get a law passed that said that any sushi must meet a certain standard, I'd never get to enjoy it.

So whether it's the ABA, AMA, CFA or the sushi-chef cartel (which I don't believe exists yet), it is of major importance for the economy that they be thwarted.

Update: Larry Ribstein has more.

Comments

[Hal Merkow]

Untrained laymen in a courtroom is the same as an untrained layman performing surgery. Sure, there's plenty of room for paraprofessionals in every discipline but one takes an enormous risk classifying all 'professionals' as Chevrolets. Even with the standards of law schools today, I see MANY lawyers to whom I would not trust the completion of a simple document let alone successfully argue a case in court, cross examine witnesses and evaluate evidence. There is no single simple answer.

[meep]

Right. The only people likely to end up dead due to poor lawyering are those up for the death penalty, and even then there's a delay of several years. When it comes to surgery, you can be dead in seconds. And then, there's always the malpractice suits that comes later -- no hospital would (knowingly) hire an uncertified surgeon as they would not be able to get liability coverage (and neither would the surgeon).

It's amusing to see lawyers hyperventilating over stuff such as Nolo press offerings and legalzoom.com, which is filling a need for cheaper, commodity-like legal offerings. Not everybody needs a complicated will or power-of-attorney, and most people will forgo it altogether if it costs them hundreds of dollars.

I happen to belong to a profession that has a similar gate-keeping group and subgroups -- the actuarial profession. Thing is, I believe there's only a few activities where one has to have the correct credentials for it to be legal (signing actuarial memos on pension plans, actuarial statement/memo on solvency of insurance company) and most other actuarial work can be (legally) done by anybody (though most companies will not hire you for such without some proof of your competency, which usually requires credentials and/or a certain amount of experience). You don't need a particular college degree, or years of work experience -- you just have to pass a series of exams that most people self-study for. Because the main consumers of the "actuarial product" are companies and not private individuals, I guess no one thought they had to protect the public from poor actuarying...and the check we have in any case is other actuaries (i.e. those working for the govt regulators) looking over our shoulders.

[angie]

Good luck on this crusade. Republicans oppose unions of the worker sort, but doctor's and other professional associations are their friends. A lot of conservatives are essentially feudal believing in protected niches.

There are alternatives to formal courts for many conflict resolutions. There is nothing in theory stopping them from reaching a degree of integrity that would encourage trust.

Indeed the current system is such that doctors essentially work with lawyers. Doctors refuse to admit a mistake. In systems where errors are documented and addressed the experience is far more patients recieve responses and compensation, but the costs of these go down. Also corrections are made.

But this requires doctors being able to admit their wrong. And in such a system the profits of "defensive medicine" would go way down.

Nowadays a lot of real medicine is practiced by nurses, therapists and others. they perform many tasks and evaluations and in some cases deal enough with the patients to know the situation and offer advice. Doctors like 5 minute sign off sessions.

We have created guild systems. Rational analysis of what it takes to get the task done are necessary. in many cases different degrees of training and different organization of responsibility could be much better.

The Cadillac analogy is a pure lie. Doctors and lawyers do not like transparency and rating. A good article on this battle is here:

http://www.newyorker.com/fact/content/?041206fa_fact

In fact in regions with more doctors in a certain specialty the nmber of procedures and other treatments go up. The market is not competitive, they are able to tweak it.

If they cared about Cadillac ratings they would pblicly be wondering why we pay twice as much of our income as other industrial countries with the lowest life expectancy, the high highest infant mortality rate and the largest percentage of seriously ill.

Note I don't say this is all doctor's responsibility, but the fact that they refuse to touch the subject, but reatreat to the claim we have the best system is an indication that much of it is.

They will be more difficult to reform than GM.