Legal Barriers to Innovation
USC Legal Studies Research Paper Series No. 09-5
9 Pages Posted: 27 Oct 2008 Last revised: 12 Nov 2013
Date Written: October 24, 2008
The American Bar Association and its state-level brethren control and regulate the legal profession, determining who can provide legal services, how those providers are trained, and what business forms those providers can use. This professional regulation limits what may be offered as a legal product or service, homogenizes the pool of potential innovators in terms of training and risk-orientation, prohibits the corporate practice of law, severely restricts the available financing for large-scale legal ventures, and constrains the capacity to exploit economies of scope and scale in developing better methods of producing what business clients ultimately need. This article examines this problem and encourages states to adopt a different regulatory structure that encourages innovation that benefits legal clients.
Keywords: innovation, corporate legal markets, law, legal barriers, bar association, regulation, monopoly, self-regulation, legal market, barriers to entry
JEL Classification: D42, J2, J4, J44, J71, J78, K2, K23, K31, L51, L89, O1, O11
Suggested Citation: Suggested Citation