Whenever there is a discussion on deregulating the legal profession, those favoring deregulation claim that lawyers have a monopoly. This monopoly supposedly makes lawyers prohibitively expensive for most people. Whether lawyers’ fees are too damn high is subjective and will be discussed another time. But today, let’s determine if lawyers are really engaging in monopolistic behavior.

A monopoly has only one supplier of a good or service. This allows the supplier to charge the consumer whatever it can get away with. This is obviously not the case in the legal profession. I looked at the number of lawyers in randomly selected states:

Vermont: 3,612
Connecticut: 21,036
Virginia: 24,230
Tennessee: 18,702
New York: 182,296
Kentucky: 13,570
Illinois: 62,720
Indiana: 15,845
North Carolina: 24,253
Pennsylvania: 50,039
Ohio: 38,189

I get that not all lawyers are competing against each other. Some are working in government and get their salaries from the taxpayer community chest. Others are working in one of those quirky JD-advantage jobs. Despite that, there is a good chance you’ll find at least three law offices in a boardwalk of any major city. Because of this, fewer attorneys are in general practice in order to avoid competing against each other. Most specialize to differentiate themselves. For example, in my practice area, some specialize in minimizing income taxes, some specialize in estate taxes, and a rare few specialize in avoiding luxury taxes.Some might argue that lawyers as a group have a monopoly on giving legal advice. Assuming that is the case, the large number of lawyers makes it impossible for them to control prices by operating like a cartel. No state bar or other organization tells lawyers how much to charge a client. In fact, some lawyer message boards and listservs forbid recommending minimum fees or discussing fee structures.If there is an unspoken minimum floor on legal fees, it is due to the costs of running a law office, not because every lawyer is living on Park Avenue. My criminal defense colleagues tell me there is no free parking when they are just visiting their clients in jail. This is why I am skeptical […]

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