Lawyers' Property Rights in State Law

Abstract:     
The current system of state licensing of lawyers is being challenged by significant changes in the legal profession, including multi-state and multi-disciplinary law firms and the rise of Internet law practice. Conventional client-protection explanations of lawyer licensing are inadequate to meet this challenge. However, lawyer licensing can be best understood in the context of the state competition debate. State licensing has an important overlooked benefit in terms of enabling lawyers' role in the state lawmaking process. Efficient laws make the state an attractive forum for potential litigants to choose at the time of their contract. Lawyer licensing encourages lawyers' involvement in lawmaking by capitalizing the benefits of their law-improvement efforts in the value of their law licenses. In other words, state licensing gives lawyers a kind of property right in law. This article shows how lawyers' influence over state law may be consistent with social welfare and how giving lawyers property rights in law through state licensing helps produce these effects.

JEL Classifications: G3, H1, H4, H7, K0, K2, K4

Working Paper Series