Tournament guild

DCM and I have posted our contribution to the many pieces reviewing Brian Tamanaha's book, Failing Law Schools. We make two points that may interest readers here.

First, we suggest that many of the problems that plague law schools and the legal profession stem from the profession's guild status. At first, this seems counter-intuitive: Doesn't a guild benefit its members? In particular, doesn't it limit entry? Almost everyone agrees that we have too many lawyers. How could a guild create a glut?

The answer is that law is a "tournament guild" rather than a classic "limited entry" one. The latter type of guild operates by restricting initial entry: The American Medical Association functions in this conventional manner. Some medieval guilds worked the same way, simply specifying the number of producers in each region.

But even in the middle ages, many guild structures were more complicated; they operated as tournaments. In a tournament guild, new entrants first pay high fees simply to train for the guild. The "training" may not teach much; newcomers may simply watch others work. But the training fee is essential to purchase a chance to enter the guild. The new entrant then invests significant time learning the trade as an apprentice, often while providing valuable work to the master. To move to the next level (journeyman), the apprentice may have to produce a signature piece of work, demonstrate specified skills, or prevail in a formal or informal competition. Surmounting these hurdles may require investments of money as well as time, because the would-be journeyman may have to purchase materials or equipment to complete the required task. Apprentices in a tournament guild do not inevitably become journeymen. Some fall to the side as they fail to muster the required time or money for advancement; others lose competitions to more skilled, luckier, or better-connected foes.

In the tournament guild, a similar process unfolds as journeymen attempt to become masters. The journeyman may have to complete a set number of years, produce a particular product, or simply please the established masters to join the command circle. A tournament guild doesn't promise every journeyman--much less every apprentice--a master's berth. New entrants are willing to devote time and money simply to compete for the chance of becoming a master. Some of those who fail will find satisfaction as life-long journeymen; others will turn to other things. The guild masters, meanwhile, reap the guild's economic rents through three processes: (1) the higher prices they can charge for their own "master" products; (2) the entry fees they charge new entrants; and (3) the profit they derive from leveraging the work of apprentices and journeymen.

If this sounds familiar, it should: The American legal profession has long operated as a tournament guild. This is why it costs so much to go to law school; the guild can extract fees from eager entrants willing to pay simply for the chance to become masters. This is why we have endless competitions in law school and law practice: In what other system would it make sense to distinguish the top 10% after only a third of basic training, with that designation having long-term career implications? And the tournament system is why so many lawyers have always left practice after 5 years, 10 years, 15 years, 20 years...That's the way the guild operates.

Is there a powerful committee somewhere, controlling this system? To some extent, yes: The ABA, AALS, state supreme courts, and state bar associations set rules that keep this system operating. But if you take a sociologist's perspective on this, you'll know that social structures operate through a large number of interlocking systems. No one has to sit down each year and decide, "hey, this guild system is working great for us--let's keep things just as they are for another year." As long as the system benefits its most powerful members, the pieces are likely to stay in place.

That brings me to the second point that DCM and I make: The best way to address the problems in legal education and law practice is to end the guild. Competition from outside is already fracturing the guild, and there is no way to stop those forces. Technology, unbundling, offshoring, and the expertise of nonlawyers (compliance officers, HR managers, and others) will continue to chip away at guild profits. Soon there will be enough profit only for the masters themselves--not enough to attract new entrants or keep journey-people working toward master status.

Meanwhile, a tournament guild isn't very kind to its members. People invest in education that won't pay off for them; peers compete at every stage for advancement; and a select few reap much of the profits--not necessarily because they're more talented, skilled, or hard working than other entrants, but because they had some of those attributes and were also lucky or well connected. Nor, of course, does a tournament guild help consumers: It creates all types of market distortions.

This may sound like heresy, coming from inside the guild, but most lawyers and potential lawyers would be better off without our guild restraints. Remember that even our free markets in the United States are heavily regulated. A free-er market for legal education and legal services would create more efficient, cost-effective means of education, workplace advancement, and service delivery without compromising consumer and worker protections.

Here's just one small example of what we mean: Licensed lawyers aren't protected by minimum wage laws because they are professionals. If you're a newly licensed lawyer, eager for work and experience, you get our guild protection rather than general marketplace protections.

You may agree with us or disagree, but we hope you'll be intrigued and continue the discussion on how to fix legal education and the profession.  DJM and DCM