The Professional Prospectus: A Call for Effective Professional Disclosure
59 Pages Posted: 1 Mar 2017 Last revised: 20 Aug 2017
Date Written: February 27, 2017
Without easy access to relevant information, many consumers unwittingly trust serious decisions to professionals with histories of malpractice and negligence — leading to harms both individual and societal. This Article proposes to improve professional services markets with a tool that has already proven effective in the securities markets: a prospectus. A “Professional Prospectus” would reduce information asymmetries and improves the market for professional services through disclosure and consumer choice.
A Professional Prospectus would alter the market for professional services by making professional reputation a more potent force. Economic theory often relies on “reputation effects” to ensure the efficient functioning of the market without providing for mechanisms to efficiently broadcast reputation. Tailored disclosures delivered through a Professional Prospectus would put existing public information into consumer hands, allowing the market to more effectively value professional services. This would discipline and deter professional misconduct and reward higher-quality service providers.
To showcase a feasible Professional Prospectus intervention, the Article presents an initial use case of how a mandatory disclosure intervention could improve the market for immigration law services. The principles developed in this Article may also improve private and social outcomes in other markets for professional services.
Keywords: Ethics, Legal Ethics, Securities, Financial Advice, Asset Management, Immigration, Professional Responsibility, Disclosure, Market Failure, Reputation, Consumer Protection, Occupational Licensing, Self-Regulation, Healthcare, Health Law
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