The Federal Trade Commission endorsed a proposed rule change that would eliminate the American Bar Association's control over education requirements for taking the bar exam in Texas, marking a potential shift in how states regulate entry into the legal profession.
FTC staff submitted a letter to the Texas Supreme Court supporting an amendment that would remove the ABA's authority to dictate which law schools qualify graduates to sit for the Texas bar exam. Currently, Texas Bar Admission Rules require applicants to obtain degrees from "approved law schools," defined specifically as institutions "approved by the American Bar Association."
The FTC's Office of Policy Planning and Bureau of Competition directors argued in their letter that the current arrangement creates serious competitive risks by allowing an association of practicing lawyers to restrict entry into their own profession. "The ABA is dominated by practicing attorneys who have a strong interest in limiting competition for legal services," the letter states.
Under existing rules, the ABA can effectively exclude potential market participants who would compete with its members for clients and legal work. The commission views this as a classic case of industry self-regulation that serves incumbent interests rather than consumer welfare.
The FTC staff letter also criticized the ABA's Council governing law school accreditation, noting it is controlled by higher education interests with incentives to maintain expensive law school programs and prevent entry of more affordable alternatives. This structure, according to the commission, creates barriers that go beyond ensuring competency and instead serve to limit supply in the legal services market.
"The current rule likely prevents many potentially qualified lawyers from providing needed legal services to the Texas public," the FTC staff letter states. The commission argues that consumers would benefit from increased competition among legal service providers, which could lead to lower prices and greater innovation in service delivery.
The proposed amendment represents what the FTC characterized as "an important step in weakening the ABA's enduring monopoly and resulting power to impose costly, overly burdensome law school accreditation requirements." The commission sees the Texas proposal as potentially setting a precedent for other states to follow.
For prospective law students, the change could open pathways to legal careers through alternative educational models that might be less expensive or more flexible than traditional ABA-accredited programs. This could include online programs, apprenticeship models, or specialized training focused on specific areas of legal practice.
Consumers of legal services stand to benefit from increased competition among attorneys, which economic theory suggests should lead to competitive pricing and service innovations. Currently, many Americans struggle to afford legal representation, with studies showing significant unmet demand for legal services across income levels.
The ABA has historically defended its accreditation role as necessary to ensure quality legal education and protect the public from incompetent practitioners. The organization argues that its standards maintain professional competency and ethical training essential for effective legal representation.
However, critics have long argued that ABA requirements go beyond what is necessary for competency and instead serve to artificially limit the supply of lawyers. These critics point to other professions that have successfully maintained quality while allowing more flexible pathways to licensure.
The Texas Supreme Court's consideration of this rule change comes amid broader discussions about professional licensing reform and access to legal services. Several states have experimented with alternative pathways to legal practice, including limited license programs that allow non-lawyers to provide specific legal services under supervision.
Other regulatory reforms in the legal industry have included allowing non-lawyer ownership of law firms in some jurisdictions and creating new categories of legal service providers with more limited scope but faster pathways to practice.
The FTC's endorsement carries significant weight given the commission's expertise in competition policy and market regulation. The unanimous 2-0 commission vote authorizing the staff letter demonstrates bipartisan support for challenging what the FTC views as anticompetitive professional licensing arrangements.
In their letter, FTC staff encouraged other states to consider similar reforms, suggesting this could be the beginning of broader changes to how legal education and bar admission are regulated across the United States.
If Texas proceeds with the proposed amendment, it would become one of the first states to break from the ABA's accreditation monopoly for bar admission purposes. The outcome could provide valuable data on whether alternative approaches to legal education maintain professional competency while increasing access to legal careers and services.
The Texas Supreme Court has not yet announced a timeline for its decision on the proposed rule change. The court will likely consider public comments from various stakeholders, including the legal profession, law schools, and consumer groups, before making a final determination.