More on lawyers and foreclosure-gate

Cite this Article
Larry Ribstein, More on lawyers and foreclosure-gate, Truth on the Market (October 22, 2010),

A few days ago I wrote that a cause of foreclosure-gate was the law industry’s failure to fully adapt to mass production, at least partly because of current ethics rules.

But lawyers are, of course, fully capable of litigating the mistakes that result from this business model.  Yesterday’s WSJ examines “the growth of a legal sub-specialty called foreclosure defense that has sown confusion and turmoil in the housing market.”

Some will think of these lawyers as heroes for keeping their clients in their homes, while others will think of them as money-grubbing transaction-cost generators. My point here is only that the structure of the law industry skews it to litigating problems rather than creating solutions.