There's also the fact that our demand for healthcare is enormous, because we all get sick, it's a fact of life that's not gonna change very soon.

But the demand for lawyers is completely cultural. Where I am, the amount of lawyers per capita is one tenth of what it is in the US, there's no innate demand for lawyers, so if they start to price themselves too high, demand will fall as people and communities and businesses figure out ways to accomplish the same things as before, but without lawyers.

I don't think that's the case. People think that the U.S. has a lot of lawyers because we're a "litigious society" but I've never seen evidence suggesting that Americans are more likely to sue than other sorts of people.

I think the demand for lawyers is more structural than anything else, and there are a lot of dimensions to this. First, the amount of conflict rises proportionally with the number of interactions between people. This means larger societies have more (superlinearly more) conflict than smaller ones, more active economies have more conflict than less active ones, and heterogenous societies have more conflict than homogenous ones.

Second, different countries use different mechanisms to accomplish the same tasks. The U.S. is at one extreme--we use private litigation to handle things like employer/employee disputes that might in other countries be handled by a complaint to some sort of board. Litigation is, by design, the way to challenge most government action. In the regulatory regime, we skimp on government enforcement of things like financial or enviromental laws, and write in "citizen suit provisions" to allow private enforcement.

Third, the demand for lawyers depends on the structure of the economy. An economy based on financial services, which can result in expensive and complex disputes, needs many more lawyers than one based on agriculture.

Fourth, the number of lawyers in a country isn't directly proportional to the amount of conflict within the country itself. A country that hosts numerous multi-national corporations will have many lawyers working on disputes that actually arise in other countries. Moreover, a country with a sophisticated legal system will be asked to resolve disputes that only have a tenuous connection to the country. The U.S. is also a net exporter of legal services, in conjunction with its export of financial services. American firms do work for Brazilian companies doing IPOs in Brazilian markets. The reverse is never true.

An example of an (industrialized) country that has 1/10 as many lawyers per capita as the US is Finland. Can you compare the US with Finland? The US has 133 Fortune Global 500 companies, Finland has 1. The US has 9 cities as large or larger than Finland. The U.S. is extremely heterogenous. Finland is extremely homogenous. The US has to alter its laws to limit the number of foreign cases coming into New York City's courts (a city 4x as large as Finland). An American (or sometimes UK) firm is involved in some way in nearly every major IPO that happens in one of the world's large financial markets. How many Finnish firms are involved in American IPO's? Etc.

This is a big difference, and is even used within government, for example when a state sues the federal government to challenge a law. For Constitutional things that is true in any country with a federalist system, since if a state/province argues the national government overstepped its authority, some kind of constitutional court needs to resolve the dispute. But the U.S. uses it even in statutory disputes. Congress will pass a fairly general law, delegate enforcement to bodies such as the EPA, and then you have years of litigation between the EPA, a state, and maybe even a municipality, over things such as new transit systems. In many other countries, even large ones, this is done more centrally. For example, if Paris decides to build a new line on the Paris metro, it will present a proposal to the national legislature, which will (if it agrees) pass a law specifically authorizing the construction of that line. After that happens, the line expansion becomes definitionally legal: the national parliament has passed a law authorizing it, which supersedes any previous laws, except for the constitution itself. So there is no grounds for anyone to sue to block the line on the basis of other laws (environmental laws, noise ordinances, etc.), since the legislature is presumed to have already weighed all those factors in passing the law authorizing the metro expansion. The U.S. Congress instead prefers to pass general guidelines and leave it up to the courts to decide whether a particular metro line follows those guidelines or not.

USA: 5805 Suits per 100k people (cf. next highest - UK/England @ 3681 per 100k) - [1]

[1] http://www.law.harvard.edu/programs/olin_center/papers/pdf/R...

Saying that 2 multi-nationals are going to duke it out in the States over the rest of the world may or may not be true - (Are a major percentage of multi-nationals headquartered in the US? If they are lodging action in the US, is it because it is easier?)

But I would tend to think that 300 Million americans and their individual actions are going to be greatly more influential on the total case load and per capita case load in the US than the approximately 70,000 multinational companies - which would be like a drop in the ocean against the individual litigations.

That said, number of cases still does not mean that people are litigious in the sense of resorting to lawsuits instead of other available means of dispute resolution. E.g., car collisions are a huge source of litigation. The US has 3.4x as many motor vehicle deaths per capita per year as the U.K. (and presumably, many more collisions too) because of our highly suburban structure. So if we have more motor vehicle/insurance lawsuits, it doesn't necessarily mean it's because we're quicker to rely on litigation. Employment litigation is another big one for regular people. Here in the US, if you think you were fired unfairly, there is no administrative agency that'll handle the dispute. If you think you were fired because of race you can complain to the EEOC, but either way the dispute will end up in court.

What you are saying is reaonable and might be true in a lot of places, but Japan has 1/50 as many lawyers per capita as the US. It's also much, much more homogenous than the US, but can that explain 1/50? There has to be more than that.

> Second, different countries use different mechanisms to accomplish the same tasks.

Yes, and that is completely cultural, not structural. The US has chosen certain mechanisms, as a result of that choice more lawyers are needed than elsewhere, but if that burden becomes too heavy, many americans might start choosing differently, might start resolving disputes in a cheaper way.

I'll give you that heterogenity and being the hub for international financial transactions increases the need, but I still think culture plays a large part as well, and, to get back to the original argument, that means that the American Bar Association and similar have to watch out, they can't assume the demand for legal services to be boundless in the same way as it is for medical services.

> Yes, and that is completely cultural, not structural. The US has chosen certain mechanisms

I think we just disagree on the meaning of "cultural" here. I consider the fact of whether you bring a dispute over an employment issue to a civil service agency versus a court to be a matter of structure, you consider it to be a matter of culture. My point is simply to point out that to a certain extent you're pushing on a balloon. Yes, we could restructure things to require less lawyers, but we'd likely require more civil servants instead.

> But the demand for lawyers is completely cultural.

I don't think this difference can be taken for granted at all. For example, the American cultural tendency to consume greasy and fattening food in high quantities while not exercising leads to higher rates of disease than in other developed nations. This in turn leads to a higher need for medical care that is purely cultural in origin.

This sounds like a cultural factor as well.

I don't know where you are, so don't know if this applies, but I know that for some countries where lawyers per capita is much lower than the US, it is because the term "lawyer" has a different meaning. In the US, anyone licensed to practice law (with a few minor exceptions) and who does so is counted as a "lawyer". That would include the attorneys who represent the State in criminal proceedings, the attorneys who represent defendants in criminal proceedings (whether employed by the State or by the defendant), attorneys on staff at corporations who handle contracts, mergers, intellectual property, employment issues, and so on.

In many countries, I believe, "lawyer" is only used for a subset of these, such as only those who actually litigate, or only those who handle criminal cases. Some of the lists of seen of lawyers per capita fail to take this into account, and so end up skewing the numbers.

Juries are limited, and thus less lawyers needed overall.

Here, if you go to court, either civil or criminal, you of course need a lawyer. I don't see how that is substantially different from the way it works in the US. And the UK, which also is a common law country, has a much lower amount of lawyers per capita than the US.

One explanation for the difference is of course that the US is a very litigious society, resulting in more legal proceedings than elsewhere, and that might be hard to change. But to me it appears the americans in general use lawyers for trivial matters like divorces or wills or entering into contracts or buying property or whatever, and if the cost of lawyers were to increase sharply, I think that americans would be able to discover ways to do those things without lawyers, just like the rest of the world is doing perfectly fine already.

Unlike medical associations which have driven up prices of healthcare, but thanks to our limitless demand for those services, we grin and bear it instead of finding alternative solutions.

All I read is that if they did become more expensive, people would work out other ways to get things done.

Comparing Germany to England there are many differences when it comes to libel. Germany has a civil law system while England has a common law system. German cases are decided by a panel of professional judges, while in England juries can be used. German lawyers are paid on a task based system, while English lawyers are paid by the hour. The German system needs one lawyer per claimant and defendant, for cases where English law would need three solicitors, a partner, some trainee solicitors, and two or three barristers. In the German system there are no punitive damages, only compensation.

Because of these differences, a claim with legal costs of 10,000 euros or less in Germany can cost several million pounds in legal fees in England.

How a country's legal system works can radically alter the costs of going to court.

[1] http://pcmlp.socleg.ox.ac.uk/research/project/comparative-st...

http://en.wikipedia.org/wiki/Civil_law_(legal_system)#Differ...

http://en.wikipedia.org/wiki/Jury_trial#South_Africa

http://en.wikipedia.org/wiki/File:LegalSystemsOfTheWorldMap....

Some numbers I compiled a while ago: http://www.kmjn.org/misc/uc_funding.txt

The situation might well be different for law schools or other university systems, which I haven't investigated in detail.

Or did I misunderstand what you meant by "in real terms". "in real terms" means TCOE = tuition + state contribution

I agree lower enrollment is a possibility if there were both decreased state funding and no increase in loan availability. Not sure, though. Would need some information on supply and demand of UC enrollment slots, and what kind of marginal impact loan availability has.

One hypothesis is that it might just result in a wealthier student population with lower average grades. That scenario would happen if there currently exist students who didn't have good enough grades to make it into a UC, but whose parents would have paid cash out of pocket to attend, if their sons/daughters were able to get in. Those potential customers/students who are willing and able to pay, but are currently being turned away, might pick up the opened slots, if any materialized. I don't know how many such students exist, though.

Another approach could have been for the UC system to lower enrollment on its side, so they could educate fewer students at lower tuition, given the same amount of state funding. But California law doesn't currently permit them to do that: the UC system is required to open admissions slots equal to at least 12.5% of in-state graduating seniors.

That $11,700 figure is a bit low. Take $6,830, compounded it at a very modest 3.0% and you will end up with over $13,000 after 22 years.

A more realistic rate of return would be about 5% which compounds to about $20,000 in todays terms.

http://inflationdata.com/Inflation/Inflation/DecadeInflation...

So, no I'm not up to speed on the cost of living in the USA ;)

All those banks pay a 4.5% dividend and on top of that you also get capital growth on that investment.

Now while this is by no means risk free investing, unlike banks in America that are pretty much unregulated, these Australian banks are heavily regulated.

So for these institutes the term 'safe as a bank' does in fact apply.

  > 1990 was $6,830 per year (about $11,700 in today's
  > dollars). It is now over $48,000/year