The Bar Exam and Its Impact on the Legal Business

by February 17, 2021
As another bar exam approaches, the fallout from July’s test is still wide-ranging, and well-suited for coverage by business journalists. (Photo via Pixabay.com)

The bar exam in the United States, the latest edition of which will be administered Feb. 23-24, is a rite of passage for law school graduates. The test, which serves as their final academic obstacle to entering the legal profession, is older than the country itself. This gives the impression that it is a thoroughly ingrained tradition. 

For over a century, however, the bar exam played a minimal role. Some states allowed any citizen who could vote to also practice law. As more and more states sought to attract aspiring lawyers to fledgling law schools, they opted not to enforce a more rigorous bar exam, but to implement what is known as diploma privilege. A state with diploma privilege allows graduates of certain local law schools to enter the profession without passing a bar examination.

By the 1920s, though, the bar exam was on the rise. The American Bar Association, wielding increased influence, argued that inconsistent academic standards between different law schools made diploma privilege suspect, and that a widespread written bar exam, penned by esteemed national examiners, could improve the quality of lawyers around the country. By 2020, diploma privilege had fallen by the wayside in every state but Wisconsin.

In the interim, the bar exam became an industry all its own, led by the National Conference of Bar Examiners (NCBE), a 501(c)(3) organization with yearly profits in the millions. This is to say nothing of the cottage industry of test-prep companies, such as Barbri and Kaplan, whose extensive bar review courses have become almost as essential to law students as law school itself.

This industry, like so many others, has been uprooted by COVID-19.

The bar exam typically occurs biannually, in February and July. The July 2020 edition of the bar exam was plunged into chaos by surging coronavirus cases around the country, and states adopted diverse approaches to assessing their test-takers. Several jurisdictions returned to the old standby: diploma privilege. 

Eligible 2020 law school graduates in Louisiana, Oregon, Utah, Washington, D.C., and Washington state were granted the ability to enter the profession without ever sitting for the bar — yielding an estimated 1,400 new lawyers as of January. Many other states permitted graduates to enter the profession under supervision until they had a chance to take the exam.

Could the rise of emergency diploma privilege lead to the eventual abolition of the bar exam — something activists have long clamored for? The NCBE is powerful, but may not be able to stand in the way of diploma privilege if it gains enough traction. (When the NCBE, which is based in Madison, Wisconsin, released a white paper criticizing diploma privilege in April, critics pointed out that the organization’s president, Judith Gundersen, is herself a beneficiary of diploma privilege.) 

Barbri president Mike Sims also told Bloomberg in June that the company considered lobbying against diploma privilege, and that if more states had adopted the measure, it could have hurt Barbri’s business significantly. 

As another bar exam approaches, the fallout from July’s is still wide-ranging, and well-suited for coverage by business journalists. Consider asking local law firms how they feel about hiring young lawyers who haven’t sat for the bar, or what it’s been like supervising the work of temporarily licensed graduates while they wait to take the exam. Some firms in Washington state, for instance, expressed reservations about hiring diploma-privileged lawyers.

Journalists can also report on local test-prep companies and tutors, especially those in diploma-privilege jurisdictions, and ask how their bar review timelines have been disrupted, or if some customers have ditched them completely. Do they consider the recent rise in diploma privilege a passing fad, forced by extenuating circumstances, or expect it to persist as a sustained movement? How do they plan to adapt?

Efrain Hudnell, co-founder of United for Diploma Privilege, said in August that the new lawyers who didn’t have to take the bar exam can serve as a “control group.” Hudnell says their success could demonstrate the long-term feasibility of diploma privilege. Business journalists now have a golden opportunity to observe that “control group” in action, and report on how the group impacts the legal business.