George Leef on If We Want Creative Destruction, Destroy Unauthorized Practice Prohibitions

I may have missed it, but a topic that I don’t think has come up in the discussion thus far is unauthorized practice of law prohibitions. If we want to allow the free market’s discovery process to work – finding new modes of delivering services that serve consumers better than the old ones – we must get rid of unauthorized practice prohibitions.

Those vague laws can and often do ensnare anyone who assists anyone else in something that the bar association thinks should be its “turf.” Here’s a revealing case I learned about quite a few years ago when I lived in Michigan.

A man’s daughter had gotten involved in an extended custody battle with her ex, but she had lost her job and could not afford a lawyer to draft the responses necessary if she was to continue the fight. So she asked her father, an accountant, if he could help her. Why not, he thought – it can’t be all that hard. He went to the library at the Cooley Law School in Lansing and asked where he could get a book with the appropriate forms. He got them, filled them out, and sent them in. No problem – or so he thought.

A few months later he was informed by the Michigan State Bar’s unauthorized practice committee that by filling out the forms and submitting them, he had violated the state’s unauthorized practice of law statute.  The State Bar filed suit against him, demanding not only that he never do that heinous act again, but that he pay the Bar back for its expenses in investigating and suing him.

Appalling.

Other people have felt the wrath of similar committees because they offered low-cost services by cutting out the middleman (the lawyer) who had been billing clients at high rates for work the individuals (secretaries or paralegals) had done themselves.

Bar associations don’t win all the fights they pick. They wanted to stop the publication of self-help law books, going way back to How to Avoid Probate. They lost in Arizona when they tried to muscle in on real estate closings by declaring that they entailed “the practice of law” and thus required an attorney’s presence. (That led to an amendment to the state constitution declaring otherwise.) But these battles shouldn’t happen at all. Individuals ought to be free to choose for themselves whether they want to do business with a licensed practitioner who has been to law school and passed the bar exam, or someone else.

If licensed attorneys and their bar associations want to try persuading consumers that they are much better off going with them, that’s fine. They should not, however, be allowed to scare away or kill off any competition through actions for “unauthorized practice.”