Why America Needs More Lawyers

Posted on August 28, 2014 by Yves Smith

Reader Deontos sent a link to a provocative article on SSRN, The Lawyer-Rent Seeker Myth, by Teresa Schmid. Schmid focuses explicitly on the impact of economic theory on how legal services are delivered. Using county-level data in Oregon, Schmid make a persuasive case that lack of access to legal representation isn’t just a social justice issue but is also an economic problem, since it exacerbates poverty and inequality.

Since the Carter Administration, pundits and citizens accept the notion that America is overlawyered and that legal action constitutes a deadweight cost on economic activity. However, the public does not realize that this point of view was promoted aggressively and is even tacitly accepted in the legal profession despite a lack of evidence. As Schmid describes, the result of this line of thinking going mainstream is the implementation of policies to reduce the access of lower and middle income people to free or affordable legal services. The inability to obtain legal representation has much greater economic costs than the anti-lawyer consensus recognizes.