Trimming Number of Lawyers Would Spur Economy, Professor Says : Finances: Cutting 40% of state’s attorneys would save $57 billion in ‘predatory legal behavior,’ Stephen Magee says. Critics scoff, calling his claim irresponsible.
It was Shakespeare who advised, “Let’s kill all the lawyers.” Stephen Magee suggests that’s extreme--just get rid of 40% of them, because they’re bad for the economy.
Trimming the current California lawyer population by that excess 40%, said Magee, a professor of finance and economics at the University of Texas at Austin, would save $57 billion this year in “predatory legal behavior.”
Gone would be some 57,000 lawyers, who are each--according to his research--a $1-million-a-year drag on the economy.
Eureka! Bid farewell, Magee said, to “excessive lawsuits, spurious lawsuits, reduced productivity, wasted time, new products that are discouraged (and) probably excess conflicts during divorce, which lowers everybody’s productivity.”
Critics scoff, saying it’s just not that simple. “I think Magee is irresponsible and attracting a lot of attention because, to many people, the idea that lawyers are a drag on society is appealing,” said UCLA law professor Richard Sander.
The debate between Magee and his many critics is not just academic. It marks the development of serious scholarship on an issue that has captivated public fancy for about 10 years--is the lawyer boom good or bad for the economy?
Former Harvard President Derek Bok is often credited with bringing the issue to public attention, when he lamented in a 1983 report that too many of the brightest American students were going to law school and passing up careers of greater value to the nation’s economy and culture.
In 1991, the view that lawyers and litigation were swamping the nation formed the basis for the Agenda for Civil Justice Reform pushed by President Bush’s Council on Competitiveness. The panel deplored the “baleful effects” of too many lawyers.
In 1992, the issue even became a presidential campaign theme, when Vice President Dan Quayle asserted that the U. S. has 70% of the world’s lawyers, implying that the disproportion explains lagging U. S. competitiveness.
That figure, according to numerous Quayle bashers, is a fiction.
But on the central issue there is no dispute. There has indeed been a lawyer boom--led by a surge in California.
The lawyer population skyrocketed from some 334,000 nationwide in 1970 to 754,000 in 1990, according to Sander. In California, according to the state bar, the total jumped from 29,000 actively practicing law in 1970 to 108,000 in 1990--a hike from 8% of the nation’s total to 14%.
The current California figures are 115,924 actively practicing law, 143,109 total in the state bar.
Such growth prompted professors of law and economics, many for the first time, to look beyond the lawyer jokes--to explore the economic effect of so many lawyers.
Plotting the relationship between economic growth rates and lawyer populations in various countries, Magee decided that lawyers do bring economic benefit, but only up to a point--precisely 23 lawyers for every 1,000 white-collar workers.
Magee is quick to highlight the positives, saying lawyers dutifully protect “all the property rights, . . . all the liberties we have, protecting O.J. (Simpson) in case he’s innocent, stuff like that.”
But at 38 lawyers for every 1,000 white-collar workers, the U. S. has 40% too many attorneys, or about 300,000, slowing growth by about $300 billion per year, he figured--about $1 million per lawyer per year.
“I call it lawyer-nomics,” he said.
Critics call it bunk, saying that Magee’s research is based on flawed data--asserting, for instance, that getting an accurate count of working lawyers is difficult in many countries, impossible in some.
Magee insists that his research is sound.
Sander and others concede that Magee’s work has an attractive simplicity. But that, Sander said, takes the focus away from the research that needs to be done next--a study of what it is that lawyers really do.
Right now, he said, no one really knows. “What’s really needed,” Sander said, “are careful analyses of what lawyers are doing and how the composition of their work is changing over time.”
Legal Fees
Lawyers in California took in $16.3 billion in fees in 1992, the highest in the nation, according to the U.S. Census of Service Industries.
How Legal Fees Rank
Revenues for various services in California: (Service: Dollars, in Billions)
Hospitals: $34.5
Offices and clinics of medical doctors: $26.6
Motion picture distribution, distribution and services: $21.1
Computer-related services: $18.3
Legal services: $16.3
Engineering services: $10.2
Comparison by State
Comparing legal service revenues for selected states:
(State: Dollars)
California: $16.3 billion
New York: $14.3 billion
Florida: $5.4 billion
New Jersey: $3.5 billion
Massachusetts: $3.3 billion
Hawaii: $482 million
Rhode Island: $368 million
Alaska: $268 million
Montana: $171 million
Wyoming: $96 million
California City Comparison
Comparing legal service revenues in selected California cities: (City: Dollars)
Los Angeles: $5.35 billion
San Francisco: $2.36 billion
San Diego: $1.05 billion
Sacramento: $457 million
San Jose: $434 million
Oakland: $400 million
Beverly Hills: $365.3 million
Fresno: $190 million
Valley Area Comparison
Comparing legal service revenues in the San Fernando, Santa Clarita and Antelope Valleys: (Community: Dollars, in Millions)
Glendale: $114.6
Burbank: $18.1
Westlake Village: $14.4
Lancaster: $10.3
Agoura Hills: $8.85
San Fernando: $2.63
Palmdale: $2.54
Santa Clarita: $1.24
