Washington DC needs more lawyers

Believe it or not, according to a recent economic analysis (see NY Times story The Lawyer Surplus, State by State for details), Washington DC has a lawyer deficit. The analysis projects a market for 618 new lawyers annually. But in 2009 only 273 passed the bar. Interestingly enough, the District of Columbia’s Chief Financial Officer Natwar Gandhi recently cited other statistics showing that the absolute number of lawyers in Washington was declining (see WTOP story). Gandhi said that the decline in lawyers was one of the reasons for lower city revenues.
Now, I’m not sure that the economic analysis is necessarily correct — especially when it come to the supply side. I live in a neighborhood full of lawyers who don’t practice law (I even live with one). And DC has a reciprocity provision that allows lawyers who have passed the bar in other states to be automatically admitted to the DC bar. So that 273 number is suspect.
But the absolute decline in the number of lawyers in DC is interesting. I don’t know if that is a reflection of firms downsizing or firms moving to Maryland or Virginia.
In any event, it raises an interesting point as to whether the District of Columbia will maintain its stock of that particular intangible asset (lawyers). It also raises the question as to whether it should — and whether it matters at all. After all, one can argue that for some intangible assets (lawyers, investment bankers), a certain level is required to the smooth operation of the economy. But an oversupply of those assets might become a negative that simply gums up the works.
So that raises a meta question: contrary to what we normally think of a positive unlimited ceiling for knowledge, are there certain intangible assets that one can have too much of?

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