All Those Lawyers? There Oughta Be a Law

Here’s a scary fact: In 1940, California got by with one lawyer for every 567 regular folks. However did they manage? By now there’s a legal eagle for every 234 of us, and lawyers are proliferating so much faster than people that at some point in the not-so-distant future they’ll outnumber us.

Or so it seems. Lawyers are a fat target, of course. They charge a fortune, inflate the cost of everything and suppress innovation. They’re probably a bigger threat to the state’s economy than Saddam Hussein or Japanese mercantilism ever will be.

But the really terrifying thing is that such a high proportion of our best and brightest choose to enter this genteel protection racket instead of some more genuinely productive line of work.

With a few exceptions, the smartest people I know are lawyers. These aren’t just the stereotypically narrow and compulsive grinds that we all like to sneer at. They are thoughtful, curious, ethically conscious, in some cases even learned.

And instead of inventing a better mousetrap, making widgets, teaching our children or doing basic scientific research, they take the bar exam. Big-time law firms have become California’s Flanders Field, plowing under the flower of a generation in pointless legal combat (or in expensively averting same).

Despite the nationwide slump in Scholastic Aptitude Test scores and other measures of literacy and academic achievement, scores on the Law School Admission Test are creeping upward, nothing short of a miracle considering the 20-fold increase in the number of test takers since 1947. Peter Winograd, president of the Law School Admission Council, says applicants have higher grades too.

“It’s a disaster,” says UCLA economist Jack Hirschleifer. “My very best students are going into that. I’d much rather they went into plumbing.”

But who can blame them? Nearing retirement, Hirschleifer makes $100,000 a year, a fortune by professorial standards but a joke to comparably successful attorneys. Starting salaries at the 50 biggest California firms average $66,000, and partners are paid in the six and sometimes seven figures.

By way of sickening contrast, the National Science Foundation found that, in 1987, Ph.D. scientists had median earnings of $47,800. Ph.D. engineers got all of $58,100.

A look at UC Berkeley can help clarify the consequences. Almost all the students at its Boalt Hall law school are American. But foreigners last year took 59% of Berkeley doctoral degrees in engineering and 32% in the physical sciences, including math.

If we’re betting our future on technology--and in California we certainly seem to be--these odds look lousy. Lawyer compensation is a great example of the subconscious death-wish characteristic of all free markets, whose capacity for excess moves them toward monopoly, collusion and so forth. All these lawyers are just another sign of this weird capitalist Thanatos. Why else reward top attorneys with such wealth and pay true innovators so little?

Smart people become lawyers precisely because they aren’t stupid. They know that the work is boring and stressful, but most are sensibly motivated by greed (they want to get rich) or despair (what’s an anthropology major to do?). Either way, it’s a double whammy for the California economy.

Besides the immeasurable opportunity cost of all that talent lost to productive enterprise, the direct cost is both staggering and deceptive.

It’s deceptive because, like remora, those hitchhiking fish that latch onto sharks and whales, lawyers are a sign of strong economic activity. They thrive in places such as California, where people are making money. But don’t confuse cause and effect. Lawyers sap economic vitality.

The state Department of Finance reports that receipts at legal services enterprises--law firms, mainly--reached $11.3 billion in 1987, up more than 150% since 1977, even after allowing for inflation. Of course, that doesn’t count spending for the court system, in-house counsel and law schools.

More important, it overlooks the enormous cost to the economy. Tort liability accounts for 30% of what a stepladder costs, more than 95% of the cost of childhood vaccines and a third of the price of a small plane, Peter W. Huber says in his book “Liability” (Basic). It keeps several safe and important drugs and contraceptives off the market and adds $300 to the cost of every birth.

“More medical malpractice suits were filed in the decade ending in 1987 than in the entire previous history of American tort law,” Huber writes.

Lawyers would be a drain even if they worked for free, but they don’t, and billing practices at the top California firms are illuminating. Hourly fees range from $100 to $400, and until big customers started insisting, bills weren’t routinely itemized. “For Services Rendered,” one might say in its entirety, “$60,000.”

Firms don’t just bill for time. One of the best downtown law firms charges 20 cents a page for photocopies (I know two places on Sunset Boulevard that make money charging 2.5 cents) and $2 a page for faxes, including incoming. That’s right; you pay for every page you send them.

It’s a nice business. The same firm spent $500 a couple--perhaps $37,000 in all--on its Christmas party last year at a Southland museum. When curators warned that stain-prone floors would preclude red wine, the firm carpetted the place just for the night.

The answer is not fewer lawyers but a greater supply of legal services, including law clinics, independent paralegals, arbitration, self-help books, software, etc. Of course lawyers are a strange kind of supply, one that generates its own demand. Mercifully, a slowing economy and other factors have helped. Cheaper lawyers are having a harder time, public respect is waning and competition supposedly has stiffened. It’s harder to make partner all around; the big money is reserved for an elite minority.

But they’re the ones we need to worry about. That’s the group that has our future in its hands, and every time one of them opts for law school over graduate biophysics, it’s another blow to California’s economy.

We’ve got 12% of Americans and 17% of America’s lawyers. It’s a good thing the sun still shines.