Monday, March 22, 2010

Read and React: So what do lawyers and PA beer distributors have in common anyway?

This is the first of what I hope will be many posts where I showcase an article that struck me as profound. I would advise reading the article first before continuing on. So here's the link:

This is the system we should be copying from the UK. The implications of legal reform that allows additional competition as well as market segmentation are potentially huge. First, the obvious points. More competition by "non-lawyer" or alternative sources for basic services like wills, estates and so on will drive the cost of these legal services down. Second, a point the author makes, market segmentation/specialization will increase the quality of these services and consumer satisfaction.

So what do lawyers and PA beer distributors have in common? They're both rent-seekers of the highest order. Rent-seeking is the practice of using the government/law to limit, or even eliminate, competition. This usually takes the form of some type of licensing controlled by the government or a trade association. To get a license to practice law, you have to pass the bar. To get a beer distributorship, well in PA anyway, let's just say you have to know the right people.

When anyone proposes allowing other entities to enter the market (LegalZoom, the Sheetz convenience store chain) the bar and beer distributors (pun intended) stomp their feet like toddlers, afraid that they'll have to work a little harder, or a little more efficiently, for our business. Worse still, consumers are denied quality service and lower prices as a result. In the legal field, according to Hadfield, many people just give up. Not so for people who want beer, but I digress.

An additional implication for a more open legal market could be a reduction in the perceived need for larger government in some quarters. If consumers with access to inexpensive legal advice could solve relatively minor disputes with car repair shops, financial institutions and...let's insurers, we could certainly justify fewer regulations and less bureaucracy. This would lower taxes and costs for everyone. Plus we'll have less sob stories, real and imagined.

Maybe Laurence Tribe will push for a more open legal market.

Maybe he can use his influence to get the bar to drop their class action against LegalZoom. (I'm sure the judges will be impartial in that case.)

Maybe Tribe, an Obama appointee, will have the guts to bite the trial lawyers' hands that feed the Democrat Party.

And President Obama, Vice President Biden and Nancy Pelosi will hold a mass resignation ceremony tomorrow at 11:15AM.

One can dream, can't he?

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