Dropping bar exams may raise lawyer labour supply by over 15%

But slashing law degree requirements doesn’t do much, the same study finds

Dropping bar exams may raise lawyer labour supply by over 15%

States that eliminate the bar exam as a prerequisite to the practice of law could unlock as much as 16% of their labour supply of lawyers, a new study shows.

Washington University school of law associate professor Kyle Rozema published a working paper called ‘How do occupational licensing requirements affect labor supply? Evidence from the legal profession’, hoping to better qualify and quantify the role of licensing lawyers in access to justice against a backdrop of falling bar exam passage rates across the U.S.

“The primary stated benefit of licensing is ensuring a high-quality workforce, and the primary cost of licensing is reducing [labour] supply,” Rozema said in introducing his research. “An optimal licensing regime, therefore, strikes a balance between this quality-quantity tradeoff, so designing one requires estimates of both the benefits and costs. By estimating the primary costs of licensing, this article provides evidence relevant to the active policy-making of state supreme courts in changing their licensing requirements.”

Rozema used data from the American Bar Association, its survey on lawyer discipline systems, and bar statistics from 1980 through 2019 to calibrate the influence of licensure requirements in the legal profession on the labour supply of legal professionals.

Rozema found that the labour supply of lawyers would increase by 8% if jurisdictions adopted “the most lenient bar exam policies”, which rate would double (16%) if jurisdictions eliminated the exam altogether. On the other hand, adopting “the strictest” exam policies would cause the labour supply of lawyers to drop by 14%. He measured the leniency of bar exams based on the cut-off score for passing it and the number of times a state allowed people to take the test, among other factors.

Rozema was interested to note that eliminating law degree requirements, as opposed to bar exams, was “unlikely to increase labour supply meaningfully”. He explained that jurisdictions that did away with the law degree requirement normally carved out an alternative, mandatory method of gaining legal knowledge and experience outside a law school classroom, which Rozema referred to as “law office study”.

“Among other reasons why the law degree requirement does not meaningfully impact [labour] supply, law office study should be considered a barrier to entry in itself because someone must find a lawyer or judge to supervise their study,” he said.

Rozema’s working paper also analysed how much time elapsed between taking a bar exam, getting the results, and being fully admitted to practice law.

It took five months on average, he found.

While this could appear as a “temporary delay” to recent graduates, Rozema said that a change in policy addressing this time gap could increase labour by as much as 3%.

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