Academic journal article Washington Law Review

The Legal Monopoly

Academic journal article Washington Law Review

The Legal Monopoly

Article excerpt

Introduction

As much as 80% of the American public goes without a lawyer to resolve legal problems, primarily due to lack of information and cost.1 This problem, first acknowledged in the 1930s,2 continues nearly a century later, notwithstanding extensive efforts like expanded legal aid and pro bono services.3 To understand why, consider the market for legal services.

High barriers to entry, information asymmetries, and anticompetitive restrictions are hallmarks of the legal profession. Only lawyers, regulated exclusively by lawyer-judges in most jurisdictions, may provide legal representation. The profession justifies this level of self-regulation as necessary to preserve independence and ensure that the judicial branch remains a separate check on the executive and legislative branches of government. At the same time, this regulation prices legal representation beyond what many individuals can afford, consequently making access to justice out of reach.4 It also limits available information so severely that much of the American public does not realize when a life problem has a legal solution.5

Federal antitrust law typically breaks up business relationships like this, where members of an industry or profession act in concert to suppress competition. Why does the legal profession enjoy such control over the market for its services? The answer lies in the unique role that lawyer-judges play simultaneously as a regulatory arm of the state and also as members of the regulated profession.

When the state creates the monopoly or cartel, regulatory constraints typically are immune from antitrust review under what is known as the "state-action doctrine."6 This exemption from antitrust liability is based upon principles of federalism, state sovereignty, and judicial economy.7 It is justified, at least in part, by the belief that publicly accountable officials will not be influenced by the same financial motivation or other self-interest as private actors.8 Moreover, state regulatory officials usually represent a diverse range of backgrounds and experiences. This is not the case, however, for legal assistance.

In most jurisdictions, the highest courts-made up of judges who usually are also lawyers-adopt and enforce rules governing who may practice law and how law may be practiced. Even where these lawyer-judge regulators are presumed nonpartisan by virtue of a committee-based appointment process or subject to some measure of public accountability through elections, the fact remains that they are members of the profession subject to the regulations they enact and enforce.

Consequently, lawyer-judge regulators are vulnerable to capture, both perceived and actual, because as industry members, they may consciously or unconsciously advance the commercial or special concerns of their own profession. Although the judiciary is presumed to act in the public's interest, its members are nonetheless part of the legal profession. This vulnerability ought to remove lawyer regulation from aspects of the state action doctrine. Even if individual lawyers or judges may act to advance consumer interests over the profession's interests, capture risks remain.

When members of a profession enact and enforce anticompetitive regulations as an arm of the state-whether as legislators, the judiciary, or the executive-dual allegiances exist. As Justice Kennedy cautioned in the 2015 decision North Carolina Board of Dental Examiners v. FTC,9 such an arrangement risks that "established ethical standards" will "blend with private anticompetitive motives in a way difficult for even market participants to discern."10 Accordingly, in this sort of circumstance, limiting antitrust immunity is "most essential."11

Interestingly, courts do not protect competition only via antitrust law. In several instances, the U.S. Supreme Court used the First Amendment to limit anticompetitive regulations when state action immunity would otherwise protect the regulation from federal antitrust review. …

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