In my last days as editor of Miller-McCune, I was lucky enough to work with Gillian Hadfield, a USC professor of law and economics who wrote a wonderful essay on the reasons that the U.S. legal system needs to be overhauled to better serve American innovators and global commerce, especially as regards Internet-based business. It’s a nuanced argument that makes the astounding and obvious point that lawyers make laws to benefit lawyers, not the economy in general, even though a huge percentage of what lawyers do involves business relations. The result is a legal system that serves the legal profession but hinders innovation. But the lawyers don’t have to be in total charge of our legal infrastructure, as Hadfield shows in a discussion of legal reforms in the U.K.
Here’s the takeaway:
I have spoken with dozens of general counsel, entrepreneurs, business leaders and experts in innovation about how well the American legal system is supporting the innovative enterprise powering the global economic transformation under way since the fall of the Berlin Wall and the birth of the Internet. They have been uniformly optimistic about the pace of innovation in their industries — but uniformly despondent about the legal tools available to them to support their efforts to ride the surging waves of the new global economy. One complained about the great “DNA gap” between lawyers and business thinkers. Another bemoaned the need to resort to a patchwork of law firms around the world to manage operations that are “global from day one” in a new economy firm. A third shared his frustration with lawyers who produce reams of paper — erudite analysis memos or long complex contracts — when what is needed, and fast, is targeted business advice or short documents that memorialize key commitments. … Surprisingly, the complaints I hear focus far more on the value of legal work than on the cost. … Clients feel that they are paying more and more for legal work that helps them out less and less. There is a way out of the legal morass that surrounds our most innovative businesses, but it involves loosening the near total grip that lawyers have on creating the law and supplying legal services in the U.S. In America, such a notion is often dismissed as a flight of fancy, in no small part because lawyers here so jealously guard their prerogatives. But the process of opening the markets that generate legal infrastructure to investors, managers and others who aren’t lawyers is already under way in the United Kingdom, creating possibilities for legal innovation — and enormous economic advantages — that ought to interest Americans whether they are lawyers or not.
This is a truly groundbreaking article that should be read throughout Silicon Valley and its subsidiaries in Austin, New York and Massachusetts — and then shoved in the face of congressmen of both parties. The piece opens with this provocative quote from the general counsel of Cisco: “Law is too important to be left to lawyers.” Yes, it is. Read this piece, and you’ll understand why.