All government-backed monopolies are objectionable, but perhaps none so much as the monopoly that state governments give to their licensed attorneys. Laws against “unauthorized practice of law” (UPL) ensure that licensed attorneys won’t have to face competition from individuals who are not licensed. Obtaining a law license is extremely time-consuming and costly, which acts as a huge barrier to entry into the market for legal services. Violate the law and you’re subject to prosecution for a misdemeanor, no matter whether your legal service is paid or not. You’ll also be subjected to a court injunction ordering you to cease and desist from continuing to provide legal assistance.
This nasty anti-competitive system has recently come under legal attack in North Carolina. With the assistance of the Institute for Justice, plaintiffs Morag Black Polaski and Shawana Almendarez have filed suit against the state’s attorney general seeking relief against application of the UPL law to services they would like to render.
Here are the facts.
The plaintiffs are certified paralegals with extensive experience with court-created forms for basic legal problems common to lower-income people. They work for the North Carolina Justice for All Project (JFAP), an organization dedicated to helping people who can’t afford to hire an attorney navigate their way through the court-created forms they encounter in dealing with legal matters such as landlord-tenant disputes. North Carolina has recognized that many litigants can’t afford an attorney and for that reason make available online the legal forms that arise. The problem is that for many people, the language is bewildering (e.g., “implied warranty of habitability”) and they can’t represent themselves effectively without help.
The JFAP wants to be allowed to offer advice to individuals who need this legal help, but its workers are not licensed attorneys. They are perfectly competent to assist those who want their assistance, but because they are not licensed, they risk prosecution if they provide it. North Carolina’s UPL statute says they may not, but the lawsuit argues that the Constitution – specifically the First Amendment’s guarantee of freedom of speech – overrides that law.
As the complaint states, “Plaintiffs have a First Amendment right to give this advice, and the North Carolinians they would advise have a First Amendment right to hear it. That is because advice — including even expert advice on technical subjects — is speech. That is true regardless of the topic discussed or whether the speaker is paid.”
When a state law appears to conflict with a right guaranteed under the Constitution, the Supreme Court has long held that it must be subject to “strict scrutiny,” meaning that the law must be “narrowly tailored” to achieve a “compelling governmental interest.” The complaint proceeds to argue that the state’s UPL law is not narrowly tailored (it is a broad-brush prohibition) and that it does not achieve any governmental interest (UPL laws supposedly protect people against incompetent legal advice, but all they accomplish is to guarantee that many people get no advice at all). Accordingly, the plaintiffs contend, the court should enjoin the government from prosecuting the plaintiffs if they interact with people who come to them for legal assistance.
Is that an unreasonable position? Hardly. Two states (Washington and Utah) already allow paralegals to do the kind of work the plaintiffs want to do. Also, in England and Wales, it is perfectly legal for nonlawyers to offer services as long as they do not hold themselves out to be licensed solicitors or barristers.
North Carolina (and all other states, and even the American Bar Association) knows that UPL prices many people out of the legal-services market. Hiring a lawyer is far too expensive for poor people and even many middle-class people. The “solution” they offer is “free” legal help through government-funded legal aid offices. But that is a poor solution for two reasons. Many people make too much money to qualify for legal aid, but they still can’t afford a lawyer. Moreover, getting “free” legal aid is usually less beneficial than entering into a contract for it with a practitioner who stands to gain if the work is done well or to lose if it isn’t.
The legal establishment defends UPL prohibitions, saying that they’re needed to protect individuals from getting bad legal advice from incompetent people. It is conceivable that that might happen, but consumers have strong incentives to avoid dealing with people who do not have a good reputation in any field. Those who truly are incompetent won’t last long in any market. The hidden cost of UPL (and other occupational-licensing laws) is that when people cannot afford services from government-approved providers, they try to do it themselves, which is usually much worse for them.
But the consumer-protection argument is merely a smokescreen for the self-interest of the legal profession. UPL prohibitions go back to the 1920s, when the American Bar Association, upset over “excessive” competition, began lobbying the states to enact these laws and make entry into the legal services market far more costly with the requirement that would-be lawyers must graduate from an ABA-approved law school, which entails three years of formal schooling There is nothing that a lawyer needs to know to be a capable adviser and advocate that he or she can only learn sitting in a law-school class.
The plaintiffs in this case would be no better at their jobs if they did go to law school; they would merely be far poorer due to the high cost of earning a law degree and then taking the bar exam.
Is there reason for optimism here? I think there is. The Institute for Justice has succeeded in a similar lawsuit in New York, as we read here.
I wish the plaintiffs well in their fight with the legal monopoly in North Carolina. A win would create a tremendous precedent for similar cases elsewhere — that freedom of speech is more important than protecting a powerful special-interest group from facing unwanted competition.