Case Study

Example: United States of America

The Federal Trade Commission (FTC) frequently makes use of advocacy letters as part of advocacy efforts. This example illustrates how US competition authorities were able to influence the policy outcomes affecting the Professions Sector in a way that focused on securing benefits of competition, specifically increased consumer choice and lower prices, experienced by consumers.

Advocacy Letters: Professions

Professions in the United States are often subject to laws and regulations specifying who may enter the profession and what types of minimal competency requirements must be satisfied before the individual can receive a license. In the United States, the fifty states, rather than the federal government, regulate the legal profession. One aspect of their regulation is to define through “unauthorized practice of law” (“UPL”) statutes those activities that are reserved for lawyers. UPL statutes prevent non-lawyers from competing with lawyers in a variety of services.

At times, state UPL provisions have been used to prohibit non-lawyers from offering professional services that are not legal in nature, such as performing real estate closings without rendering legal advice. Several state bars and legislatures have sought to adopt opinions or bills, in various forms, that would declare real estate closing services and other types of services to be the practice of law, and thus prevent non-lawyers from closing real estate transactions.

In keeping with their missions to foster competition, the Antitrust Division of the Department of Justice (“Justice Department”) and the Federal Trade Commission (FTC) (collectively, “antitrust agencies”) opposed state UPL regulations that would likely harm consumers by depriving them of the benefits of competition.

In one UPL case in Kentucky, competition existed in the provision of real estate closing services.

However, in 1997, the KBA's Unauthorized Practice of Law Committee drafted a proposal that would have prevented non-lawyers from competing with attorneys in providing real estate closing services. This would eliminate consumer choice and drive up the prices of real estate closings.

Similarly, in Rhode Island, markets were competitive with respect to real estate closing services. However, in 2002, a bill was introduced into the Rhode Island House of Representatives that would prevent non-lawyers from competing with lawyers to perform real estate closings.

The specific aim of the advocacy efforts in Kentucky and Rhode Island was to discourage the adoption of the proposed opinion or bill. Agencies engaged in efforts to educate decision-makers about possible anticompetitive effects. In Kentucky, the Justice Department sent letters to the Board of Governors of the KBA when it was considering the UPL proposal, submitted a legal brief before the Kentucky Supreme Court in a lawsuit brought by an association opposed to the proposal, and issued press releases. In Rhode Island, the FTC and Justice Department relied on letters to the state legislature when it was considering the UPL bill and accompanying press releases promoting the letters.

In both examples the agencies’ efforts helped to achieve the desired result – the rejection of the anticompetitive regulations. In 1997, in Kentucky, the Justice Department advocacy efforts appear to have contributed to the KBA’s decision to not adopt the proposed measure. Similarly, in 2003, the Rhode Island legislature declined to adopt the proposed UPL bill after receiving the agencies’ advocacy letter in opposition to the regulation.