FTC Endorses Texas Supreme Court’s Proposed Rule Change Eliminating ABA’s Monopoly Control Over Bar Admission

Federal Trade Commission staff endorsed a proposed amendment that eliminates the American Bar Association’s (ABA) authority to dictate the education requirements needed to take the bar exam and practice law in Texas. Currently, Texas Bar Admission Rules require that a bar applicant obtain a degree from an “approved law school,” which the Texas Supreme Court’s rules define as “a law school approved by the American Bar Association.”

In a letter submitted to the Texas Supreme Court, the directors of the FTC’s Office of Policy Planning and Bureau of Competition explained that the current rule raises serious competitive risks by giving the ABA, an association of practicing lawyers, the ability to restrict entry into their profession.

The letter states that the ABA is dominated by practicing attorneys who have a strong interest in limiting competition for legal services. Under the current rule, the ABA can exclude market participants who would compete with its members. The staff letter further explains that the ABA’s Council governing law school accreditation is also controlled by higher education interests with an incentive to keep law school expensive and prevent the entry of more affordable law schools. The current rule likely prevents many potentially qualified lawyers from providing needed legal services to the Texas public, the FTC staff letter states. The proposed amendment will instead benefit prospective law students and consumers of legal services.

The proposed change is an important step in weakening the ABA’s enduring monopoly and resulting power to impose costly, overly burdensome law school accreditation requirements, the letter further states. The letter encouraged other states to take similar steps.

The Commission vote authorizing the issuance of the staff letter was 2-0.