Advertising and the Price and Quality of Legal Services: The Case for Legal Clinics

Because the holding in Bates v. State Bar of Arizona is narrow and because some lawyers remain opposed to advertising, the dispute over lawyer advertising continues. Many who favor restricting advertising contend that it will not benefit consumers. They argue that prices must either rise to cover the cost of advertising or, if prices do fall, that quality must also drop.
This article addresses itself to both charges. The first section is theoretical, demonstrating how advertising could lower the costs of producing legal services. Advertising increases the volume of services a lawyer can expect to sell. Greater volume, in turn, allows greater specialization in production, more effective use of systems management, and the substitution of paralegals and capital for lawyer inputs. The authors argue that each of these changes will lower costs, thereby lowering prices without necessarily reducing quality. The second section is empirical, comparing the prices and particularly the quality of services produced by a heavy advertiser, the Legal Clinic of Jacoby & Meyers, and the traditional firms in the Los Angeles market with which the clinic competes. Quality is defined both subjectively and objectively, and original data are presented indicating that the quality of service that the clinic supplies is at least equivalent, and on some measures better, than the quality of service that traditional firms provide.     

Public choice theory and antitrust policy

We survey the pioneering contributions of Robert Tollison to the theory and practice of antitrust law enforcement. Inspired by his period of service during Ronald Reagan’s first administration as Director of the Federal Trade Commission’s Bureau of Economics, Tollison was the first scholar to apply public choice reasoning to the question why antitrust frequently fails to achieve its stated goal of protecting consumers against unwarranted exercises of market power. In supplying evidence that the outcomes of antitrust processes are shaped more by special interests than by the public’s interest, he was instrumental in launching a wholly new research program.