Arbitration, The Law Market, and The Law of Lawyering

76 Pages Posted: 6 Nov 2013

See all articles by Erin A. O'Hara O'Connor

Erin A. O'Hara O'Connor

Florida State University - College of Law; Gruter Institute for Law and Behavioral Research

Peter B. Rutledge

University of Georgia School of Law

Date Written: November 4, 2013

Abstract

This paper builds on Larry Ribstein’s path‐breaking work concerning the role of lawyers and bar associations in jurisdictional competition and law production. According to Ribstein, unauthorized practice of law (UPL) rules, which create barriers to entry preventing out‐of‐state attorney and other professionals from providing services, can actually encourage the development of higher quality legal rules in a state. Ribstein’s work also focused on the role of contractual choice clauses in promoting jurisdictional competition for substantive and procedural legal rules. This paper builds on his insights by incorporating the increasingly important role of arbitration into Ribstein’s framework and testing empirically for possible effects of jurisdictional competition for arbitration business. We also consider and empirically test for the potential effects of jurisdictional competition on the production of law, including special rules exempting arbitration from ordinary UPL rules and state laws concerning arbitration. Our findings suggest that the adoption of a liberal UPL rule may have a significant effect on attracting legal business, but most other legal changes do not. Moreover, our findings also suggest that some (although not all) of these legal reforms are enacted as coordinated packages, validating Ribstein’s insights about the political economy of law production. Finally, our findings suggest that lawyers in many states are finding ways to cleverly respond to international competitive pressures while simultaneously insulating domestic dispute resolution from similar forces, a dynamic not explored in Ribstein’s work, and the Supreme Court’s strong preemptive stance toward the Federal Arbitration Act may be fueling this segregation.

Keywords: arbitration, courts, jurisdictional competition, legal services, UPL rules

Suggested Citation

O'Hara O'Connor, Erin A. and Rutledge, Peter B., Arbitration, The Law Market, and The Law of Lawyering (November 4, 2013). International Review of Law and Economics, 2014 Forthcoming; Vanderbilt Law and Economics Research Paper No. 13-33. Available at SSRN: https://ssrn.com/abstract=2349674

Erin A. O'Hara O'Connor (Contact Author)

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States

HOME PAGE: http://www.law.fsu.edu/our-faculty/deans/ohara-oconnor

Gruter Institute for Law and Behavioral Research

158 Goya Road
Portola Valley, CA 94028
United States

Peter B. Rutledge

University of Georgia School of Law ( email )

225 Herty Drive
Athens, GA 30602
United States

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