Two Ironies of UPL Laws

Posted by Social Science Research Network

Two Ironies of UPL Laws

David McGowan (University of San Diego)

Abstract:       Laws that require a license to practice law are supposed to divide work that requires lawyerly expertise from work that does not. But the laws that draw this line generally show little evidence of the legal craft supposedly necessary to protect consumers who need “the practice of law.” By adopting a definitional approach they often blend the worst features of both rules and standards. Among other things, such laws imply that anyone with a license is competent to “practice law,” which is not true. The practice of law is not a unitary concept and definitional approches that treat it as one may create one of the very harms they seek to avoid — sellers holding themselves out as qualified to do things they are not competent to do.

This paper uses the basic economic critique of rules and standards, and the example of antitrust law, to propose a standards-based regulation of entry that focuses directly on consumer protection. Though it would not eliminate error costs, it would reduce them to the extent possible. It would also avoid the ironies that typify many UPL restrictions.