Brian Leiter’s report here on the tough expectations Tulane Law School has for its returning faculty post-Katrina was certainly sobering, and reminds those of us fortunate enough not to be hit by the disaster that life may never return to “normal” for many of our colleagues in New Orleans.
Now comes this Joseph Nocera column in the Times (“To be Better, New Orleans, Think Smaller”, available only for a price) which offers an even more stark view. Nocera spoke to Henry F. Owsley, a New Orleans native who works in NY as an I-Banker for the bankruptcy specialist Gordian Group. According to Owsley:
New Orleans is a little like a bankrupt company . . . You have to think of it like a restructuring: what can be revived and what can’t?
Owsley, through Nocera, concludes that the “legal communities will largely disappear, and the universities, including Tulane, will shrink drastically as they lose both professors and students. ‘The universities may eventually have to serve a largely local clientele for years to come’ . . .”
Nocera, in essence, says that New Orleans partisans may find solace in a smaller, more manageable city – smaller tax revenues will mean that “local government is going to have to be run more efficiently,” smaller classes will mean that the “school system could be good”, and federal money will shore up basic housing stock and anti-flooding measures. Some (including Owsley) recommend turning New Orleans into more of a gambling destination; others conclude that gambling is merely a “quick fix.”
All in all, it is a sobering column. I do not know if the empirical predictions about the diaspora of the legal community will be born out. It would seem to me that the local bar will tend to remain clustered around its pillars: Tulane/Loyola; and the Federal Courthouse. The sooner these institutions reopen their doors and (especially) libraries, the faster the lawyers will return.
To the extent that the legal community of New Orleans is something that helps to drive the region’s success, there may be reasons to reward those law firms that return to the area in force. There is likely to be a large amount of legal work involved in the disbursement of funds from private and public sources in coming years. I wonder if regulations that established a preference for the local bar for such work would be (a) wise; and (b) constitutional?
Posted by Dave Hoffman on September 24, 2005 at 06:25 PM
Comments
Christine’s point is best here, I think. All of this is in some sense moot, because Louisiana lawyers tend to be Louisiana lawyers — natives, who have learned the bizarre civil law system (which honestly is mostly vocabulary changes — for reasons best left unexplained, I happen to be a rare exceptional yankee member of the Louisiana bar). The perception in New Orleans before was that there was a glut of Louisiana lawyers relative to the population for much that reason: they couldn’t go anywhere else. (For what it’s worth, my sort of casual evidence suggests that was true: prices for legal services seemed, pre-Katrina, markedly lower in Louisiana than everywhere else I’m familiar with.) (There also seemed to be a striking number of truly abysmal lawyers in New Orleans.)
So I doubt there will be a shortage of people in the state ready and willing to practice in cases arising out of Katrina, or to make up a “louisiana legal community,” centered, perhaps, on Baton Rouge now instead of New Orleans for the time being.
The only question is whether there’s some separate value to preserving (and subsidizing in some as-yet-undetermined fashion) a “new orleans legal community.” And frankly, I don’t see it.
Posted by: Paul Gowder | Sep 26, 2005 1:49:33 PM
Dave and Scott: I must be missing something in your arguments. We want to increase the number of lawyers in New Orleans. One would think the way to do so is by creating a regime that’s super-hospitable to every otherwise qualified lawyer who wants to practice in NOLA: less regulation, lower taxes, waived requirement of local bar membership, etc. But you are proposing a regime that would *discourage* outsiders from entering this extremely under-served legal market. Wouldn’t that *reduce* the number of lawyers, reduce competition, increase prices, reduce quality, etc.? How does a reference to “extreme circumstances” or “existing restrictions on advertising” make this proposal work?
Posted by: Kate Litvak | Sep 26, 2005 1:21:49 PM
The argument that this plan would be “wise” (my prior post was just about whether it’s constitutional) is that this is not “government restring supply,” but a protectionist subsidy justified by extreme circumstances (though I guess it’s hard for any of us to be precise in characterizing a plan that doesn’t yet exist). Viewed in that light, gov’t funneling resources toward the devastated local economy would be analogous to the Marshall Plan, or to “enterprise zones” in the most troubled parts of cities.
I do agree with the free-market argument that if there are too few attys in the “new” New Orleans, then that void will create an opportunity for enterprising attys to move there… the basic point about how markets tend to correct shortages. But in extreme circumstances — acts of god (New Orleans) or of Nazis (Marshall Plan) — I think we can create exceptions to the “wait for the market to fix things” principle, on the premise that it is a public policy imperative that the battered locality recover in a shorter number of years.
Posted by: Scott Moss | Sep 26, 2005 11:30:44 AM
I think these regulations are already in place in La. in the form of a civil law system that only La. law schools teach and that only La. attorneys know. Louisiana’s “legal community” for some years has consisted of law firms that act locally and act as local counsel for Texas law firms. So, I’m unclear as to why anything additional is necessary to ensure that La. attorneys get the bulk of the legal work that is arising in La.
Posted by: Christine | Sep 26, 2005 10:17:09 AM
Dave: but preferential contracting for veterans works when it’s the federal government (or its general contractors) handing out the contracts. How would this work when it’s private people (i.e. clients) handing out the contracts?
Posted by: Paul Gowder | Sep 26, 2005 9:18:15 AM
Kate: The point is that the provision of attorney services is already a highly regulated activity, leading to a distorted market, suggesting that we can feel less bad about further protectionist regulation (which would be justified in increasing the quality of such services in the long term by ensuring a critical mass of N.O. lawyers.)
You speak of an “obvious effect” in general, and I agree. But instead of talking about markets in general, let’s talk about the actual conditions in the legal market. And so I’ve got to ask you again whether you agree with the existence of state level bars?
Posted by: Dave Hoffman | Sep 26, 2005 7:51:56 AM
Dave: give me an example of a single market where governmentally-restricted supply of goods or services (for reasons that have nothing whatsoever to do with the quality of such goods or services) benefits consumers. No amount of advertising regulation negates this obvious effect.
Posted by: Kate Litvak | Sep 26, 2005 12:20:47 AM
Scott: I think you are right on the DCC analysis (although I do think that the particular structure of the program might really matter.)
Paul: I thought it would look something much more like a preferential contracting currently in effect for federal disbursement regs. (i.e., preferences for military veterans).
Kate: Your position would also reach and end state level bar membership, which I think would be potentially unwise in the long-term. Moreover, given current attorney advertising regulations, it is at best unclear to me how often lawyers are able to compete on quality – at least with respect to the type of routine government procurement work we’re discussing here.
Posted by: Dave Hoffman | Sep 25, 2005 11:27:56 PM
“I wonder if regulations that established a preference for the local bar for such work would be (a) wise; and (b) constitutional?”
Let’s see. Such protectionist regulations, if at all effective, will impose barriers to entry and reduce competition among providers of legal services. Which means higher prices, lower quality, and less choice for consumers of those services. Are you seriously deliberating whether this is wise?
Posted by: Kate Litvak | Sep 25, 2005 10:27:51 PM
How would such preferences work? Decree of the court: “nobody who doesn’t live here can represent a client on any of the following types of cases…”? That seems rather impractical, and the clients probably wouldn’t be too happy either…
Posted by: Paul Gowder | Sep 25, 2005 2:33:02 PM
Typo in my prior post — after “‘dormant commerce clause,'” that’s supposed to be “if,” not “is.” Sorry.
Posted by: Scott Moss | Sep 25, 2005 12:20:20 PM
I believe (I’m going off memory here, which is dangerous) that a leading Sup Ct case on a local gov’t (Camden, I think) trying to dole out work preferentically to locals said that doing do doesn’t violate the “dormant commerce clause” is there’s a sufficiently weighty governmental interest at stake (but this wasn’t strict scrutiny). The usual case is a local gov using public works projects to help local unemployment — your basic WPA-type projects at the local level. In New Orleans, the governmental interest would seem unusually strong, so (assuming I remember the Camden case correctly) such a program would seem constitutionally safe.
Posted by: Scott Moss | Sep 25, 2005 12:19:10 PM