Now that both Mike and I have broached the possibility that economic change could radically affect the demand for attorneys in the future, let me say a little about the relationship between the law school and the market.
Optimistically, we might praise “market discipline” for law schools. Law firms want to reduce clients’ expenses; governments want to reduce taxpayers’ bills; to the extent that both employ lawyers, the better trained (and less expensively trained) their employees are, the better. There is a tension between quality and expense of training, but overall we trust the market to set plausible floors and ceilings on each.
Yet this is inevitably a partial perspective, because lawyers’ skills aren’t just bought and sold on the market–they shape what the market is and can be. Law schools must play the game of maximizing graduates’ ability to succeed in the market, but they also need to constantly remind them of their ability to shape and improve markets. A few thoughts on that below the fold.
So law practice does not merely fit into markets, but helps define them. Thus we need to be very wary of “just-so” stories about the wisdom of deregulation and the efficiency of “simple rules” of contract and property. We are just now waking up to extraordinary failures of laissez-faire in many areas of the economy–be it financial regulation, consumer protection, or environmental preservation. In all these areas the enemies of law and regulation insisted that the market, unaided by regulation, would produce efficient outcomes. We will likely be living with the terrible consequences of this blind faith in the market for decades to come.
As our current financial and environmental crises worsen, the same people who helped create them now say that (surprise!) only more deregulation and tax cuts can produce sustainable solutions. Attorneys as a class should realize that this political movement is not akin to an unchallengeable religious commitment, or an ideology that one either happens to share or does not. Rather, it is in part an attempt to shift income and power from one group (attorneys and those regulation traditionally has protected) to another (the businesses that profit from deregulation). As Robert Hale would remind us:
The market value of a property or of a service is merely a measure of the strength of the bargaining power of the person who owns the one or renders the other, under the particular legal rights with which the law endows him, and the legal restrictions which it places on others.
There is no “pure market price” for legal services because the law itself tells us what can and cannot be done in market exchange. This does not mean that law is wholly autonomous–to take but one example, the pressures of globalization will heavily punish any nation with a sclerotic and parasitic legal system. But the law sets the framework for market exchange.
Taking what might be called a “Luhmannic” view, we could model the legal system’s interactions with the market as two “systems” that struggle for dominance:
Niklas Luhmannâ€™s autopoetic systems are self-governing spheres of interaction and â€œautonomous in the sense that external impacts are selected by the system or transformed by the field itselfâ€ . . . . Modern society is characterised by highly specialised, self-sustaining and prescriptive systems which serve identifiable social functions. For Luhmann, society is nothing but reflexive, self-recursive communication. The social still constitutes a whole, but one without centre or unity, where systems sit side-by-side, differentiated by function and stabilised communications.
For those who would displace equity/fairness concerns with measures of efficiency, regulation is generally going to look like a bug, not a feature, of a working market. The “lost unity” that Luhmann perceives will eventually be regained as now quasi-autonomous systems (of law, health care, politics, etc.) submit themselves to a market order. . . . which, in short, means that they calibrate what they produce to best serve the needs of those with the most buying power.
To survive, law schools inevitably must adapt to that process of social change. But they should also recognize the insights of a Michael Walzer, who recognized the importance of distinct “spheres of justice” undominated by either monetary or raw political power. Even in its diminished state today, regulation helps assure that transactions are fair (see, e.g., TILA), that the uninsured get some health care in emergencies (EMTALA), that polluters can’t recklessly poison our waters (CWA). It helps guarantee that loan information is universally available, regardless of how much money a person has–that at least some health care is distributed according to need (and not just buying power)–and that clean water will not merely be a prerogative of an elite. Law is just as crucial to the moral ecology of markets as market discipline is to the efficient provision of law.