Professional Discipline and the Labor Market: Evidence from Lawyers

I investigate the labor market outcomes of American lawyers after they are professionally disciplined. To do so, I match employment data for 672,000 lawyers in 2012 and 2020 to novel data on public disciplinary measures imposed by state licensing bodies since 1990. I find that lawyers who are professionally disciplined are not representative of the legal profession in terms of the type of law firms they work for and their practice areas. Compared with similar nondisciplined lawyers, disciplined lawyers are more likely to subsequently end up in law firms with limited oversight and in practice areas with unsophisticated clients.

Investigating causal channels, I find suggestive evidence that the labor market outcomes of lawyers after they are disciplined likely operate through law firms’ concerns over reputation and by serving as a signal of lawyer type.