Federal Trade Commission Staff Endorses Proposal to End American Bar Association Monopoly on Law School Accreditation

The American Bar Association’s de facto monopoly on law school accreditation took another hit this week as the directors of the Federal Trade Commission’s Office of Policy Planning and Bureau of Competition endorsed a proposal by the Texas Supreme Court to allow alternative means of accreditation.

This endorsement came in a nine-page letter to the Texas Supreme Court released with the approval of both currently serving FTC Commissioners.

The letter reads in part:

we endorse the Proposed Amendment and commend that it would eliminate the current rule’s delegation of authority to the American Bar Association (ABA). The ABA should not serve as a gatekeeper to a critical aspect of admission to the legal profession. Such control by the ABA is inimical to the principles on which competition law rest. The ABA is dominated by practicing attorneys, who have strong interests in limiting competition for legal services. As such, the current rule raises serious competitive risks by so broadly delegating to the ABA the state’s authority to set eligibility requirements for admission to the Texas bar. It effectively gives the ABA, an organization that has previously flouted the rule of law it purports to promote, the ability to exclude market participants who would compete with its members. We encourage the Court to reclaim its authority to expand opportunities for qualified individuals to provide legal services to the Texas public as envisioned by the Proposed Amendment.

It concludes:

The ABA should no longer have “the final say on whether a law school’s graduates are eligible to sit for the Texas bar exam.”49 The ABA’s standards for accreditation appear to go far beyond what is reasonably necessary to assure adequate preparation for the practice of law in Texas, increasing the cost of a legal education. The current rule therefore likely causes Texas to forgo admitting many potentially qualified lawyers who could provide needed legal services to the Texas public.

The Proposed Amendment is an important step in weakening the ABA’s enduring monopoly and resulting power to impose costly, overly burdensome law school accreditation requirements. It is no coincidence that in its 1995 lawsuit challenging the ABA’s anticompetitive conduct, the DOJ stressed that the ABA’s power over law schools comes, in part, from state mandates: “ABA approval is critical to the successful operation of a law school” because the “bar admission rules in over 40 States require graduation from an ABA-approved law school in order to satisfy the legal education requirement for taking the bar examination.”50 Thirty years later, little has changed yet. The Proposed Amendment is a laudable first step. We commend the Texas Supreme Court for its initiative to disrupt the anticompetitive status quo and encourage other states to take similar steps.

FTC Chairman Andrew Ferguson also commented on the proposal in this Twitter thread.

I discussed the potential end of the ABA’s accreditation monopoly here. Derek Muller analyzed the Texas proposal here. Civitas Outlook sponsored a symposium on the Texas Supreme Court’s proposal here.

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