The legal industry has been remarkably buoyant in a tumultuous world. It has weathered 9/11, the global financial crisis, economic downturns, automation, digital transformation, domestic and international instability, and the Pandemic. Through it all, the legal sector has prospered financially, even as its resistance to change has misaligned it with business and distanced it from society.
Law’s financial success has come at a steep price—the health and well-being of its workforce, an obscured purpose, and high profits but low customer satisfaction. Public trust in lawyers, legal institutions, and the vitality of the rule have laware historically low. Most Americans believe the legal system is accessible only to the wealthy and the data confirms this. The legal system is widely perceived as lacking accessibility impartiality, transparency, diversity reflective of the society it purports to serve, and indifference to serving justice and equity.
The legal industry remains remarkably inward-focused. A quick review of legal trade journals reveals scant mention of geopolitical and macroeconomic forces reshaping business, the nation, the world, and the planet. Change produces risk, and law is in the risk business— detecting, remediating, mitigating, and resolving it. Yet the legal profession has been remarkably quiet about the geopolitical risks that are top-of-mind for their multinational clients.
The legal function has not marshaled a unified response to the domestic political risks that are playing out in real time. Instead, it remains focused on itself, and more specifically, its financial performance. There is discussion of disruption, but that is limited to internal industry change, not a more pervasive political and social disruption that extends far beyond the legal marketplace.
Legal disruption is a popular parlor game for industry pundits— when, by whom, and how? Technology, new business models, “outside” competition, and re-regulation are oft-cited candidates. The predictions share a common underlying assumption: American democracy and the rule of law will maintain its resilience and vitality. That was a reasonable expectation— until a few years ago.
The degradation of American democracy has emerged as the preeminent disruptive threat to the legal industry, the nation, and the free world. Few saw this coming even a decade ago. The cancer that is ravaging American democracy and culture has metastasized. It has spread across the body politic, institutions, and norms. The rule of law has been impacted. The legal industry has neither been quick to detect or respond. It is either in denial or suffers from a systemic myopia that may prove to be its undoing.
The Rule Of Law Is On Life Support
The rule of law, democracy’s oxygen, is on a ventilator. The uncertainty of its survival—at least in recognizable form— was exposed recently when a search warrant was executed on the Mar-a-Lago compound. This was no ordinary warrant, to be sure. It was the first time in the nation’s history the target was a former American President.
The search resulted from legal process involving the Justice Department that sought issuance of the warrant; the Magistrate Judge that granted it; and the FBI that executed it. By all accounts, the search was conducted lawfully. That is not how many Americans saw it. They viewed it as a “political hit job.” That conclusion presumes that the various actors in the legal process each breached their duty to uphold the Constitution; to act as officers of the court; and to subvert, not enforce, the rule of law and the pursuit of justice. For a significant part of the country, the rule of law was “rigged” not carried out. This inverted view is emblematic of the two Americas and their radically different perceptions of social, political, and legal order.
The warrant (a/k/a “raid”) caused a political and social firestorm. It produced threats of “civil war,” violence, and anarchy. The Economist, reporting on the fallout, opined the nation was divided whether the rule of law had been honored or flouted. This split reaction is a grim reminder that for many Americans, their cultural outlook, social media outlets, and politics have replaced law as the arbiter of behavior, rights, obligations, interactions, truth, and democracy.
Democracy Is In A Bad Slump
The past several years have produced a marked decline in the health of American democracy. The Economist Intelligence Unit downgraded the US from “full democracy” to “flawed democracy” status in 2016. The deteriorating condition of American democracy has coincided with a wider global decline. The World Justice Project 2021 Rule of Law Surveyfound that rule of law performance declined globally for the fourth consecutive year. Nearly three-quarters (74.2%) of surveyed countries experienced decline. Those countries account for 84.7% of the world’s population—approximately 6.5 billion people.
American democracy has been tested repeatedly throughout its history. Even in times of crisis, it has survived in no small part because of the strength, resilience, and trust in the rule of law and legal institutions. Watergate and the Bush-Gore election are two notable recent examples of that resilience.
Watergate and its aftermath threw the country into a constitutional crisis. The Watergate hearings put the rule of law on public display, and it prevailed. Democracy had many guardians back then: the press, the transparency and bipartisanship of the Congressional hearings, the courage of several public servants to put country before party, the Courts, and the legal process all held. The legal profession also rose to the occasion.
The razor-close Bush/Gore race at the turn of the Millennium was another test of the rule of law. The election produced a thirty-seven day cliffhanger with the Presidency in the balance. The election was ultimately decided by a divided Supreme Court that ruled in Bush’s favor. Shortly thereafter, Al Gore acknowledged defeat and publicly recognized his opponent as the lawful President-elect. By doing so, he fortified public trust in the judiciary, the electoral process, the orderly transition of power, the general welfare, and the rule of law. But, as Lou Reed said, “Those were different times.”
Contemporary America And Democracy: It’s Complicated
Contemporary America has a complicated relationship with democracy. Americans, regardless of political affiliation, still overwhelmingly support democracy as the best form of government. While an overwhelming majority endorse democracy and the “rule of the people” in principle, Americans are divided on who “the people” are.
Seventy percent of Republicans believe that America’s culture and way of life have gone downhill since the 1950’s. In contrast, 63% of Democrats believe things have changed for the better. Race, immigration, social mobility, ethnicity, and a raft of other factors play into the differing views of which America people prefer. Americans are increasingly willing to resort to violence to insure that “their America” is defended. In February 2021, 39% of Republicans, 31% of Independents, and 17% of Democrats said that “if elected leaders will not protect America, the people must do it themselves, even if it requires violent actions.”
The normalization of political violence, erosion of the rule of law, proliferation of mass shootings, rash of hate crimes, growing threats of domestic terrorism, and the sunset of bipartisanship began to escalate in 2016. That was, not coincidentally, the year American democracy was downgraded from “full” to “flawed.” It was also the first time in the nation’s history that non-white births eclipsed whites. The cultural clash between the two Americas intensified and took on a heightened sense of urgency. Each camp believed their democracy—not our democracy—must prevail. Democracy has become a zero-sum game for competing factions.
America’s polarization has been amplified by social media; exploited by political opportunists; coalesced by highly organized fringe groups; calcified by “alternative facts” and a pervasive attack on truth, the press, institutions, and established norms; and stoked by normalization of violence, liberalization of gun laws, perversion of the rule of law to subvert it; and the echo chamber that has replaced civilized debate.
Domestic Political Risk Analysis And Business
The Brookings Institution and the States United Democracy Center issued a joint 2022 report on the threat posed by the failure of American democracy. It considered three main issues: (1) whether democracy is backsliding; (2) whether democratic failure represents a systemic risk to business; and (3) what steps the private sector should undertake as part of its fiduciary duties to prevent adverse market reaction to democratic failure. The top line conclusions were: (1) democracy is backsliding; (2) this poses a serious risk to business; and (3) business has a fiduciary duty to its shareholders and wider stakeholder group to take measures designed to support democracy and the rule of law.
Big business is well-acquainted with political risk analysis. Multinational companies have dealt with it for decades. Many have procured political risk insurance to manage overseas risks in the event of political upheaval, tariff wars, or other events that would imperil their investment. Until recently, the US was virtually exempt from the calculus of domestic political risk. That is no longer the case. Democratic degradation not only poses a grave threat to US-based companies, but it is also a substantial risk to foreign-based companies conducting business in the US. The threat to American democracy has global financial implications that impact social, political, environmental and other life-defining areas.
The Brookings report concluded that business has a fiduciary duty to shareholder and stakeholder groups to take measures that support democracy and the rule of law. This is not simply a patriotic gesture. As Professor Rebecca Henderson of the Harvard Business School opined: “ the decline of democracy is a mortal threat to the legitimacy and health of capitalism.” That view is shared by a growing number of multinationals engaged in scenario planning, the corporate equivalent of military war games. They are developing strategies for mitigating risk posed by the failure of the rule of law and the collapse of American democracy.
Business and law have long had a symbiotic economic relationship. The rule of law is good for business and capital markets, and business sustains the legal industry. If business leaders and Boards have a fiduciary duty to take action in defense of democracy, what about their lawyers?
Last Call For Lawyers To Serve Their Purpose
Ralph S. Tyler Jr., a Harvard constitutional law professor, considered the state of the legal profession in a recent New York Times Op Ed. His assessment is stark and unsettling: “Something has gone badly wrong: It is unclear, in America in 2022, what the point of law is, what higher ends it should strive to attain. We have forgotten what law is for.” He is correct that something has gone badly wrong. The “point of law” and the “higher ends” could not be clearer, however. Nor could there be greater urgency or higher stakes. If the legal profession does not quickly find its purpose—and act on it—there will be grave consequences.
If there is a silver lining the current crisis offers the legal profession, it is the opportunity to reclaim its humanity and purpose, both for itself and, more importantly, for American democracy. Lawyers and allied legal professionals should refresh their recollections of professional purpose by reviewing the preamble to the ABA Model Rules of Professional Conduct. “(1) A lawyer, as a member of the legal profession, is a representative of clients, an officer of the legal system and a public citizen having special responsibility for the quality of justice.” All lawyers should also recall the oath taken when they were sworn in. No matter what state Bar they were admitted into, their oath imposed an affirmative, fiduciary duty to uphold the law and support the Constitution.
The current political climate has created an all-too common ethical and financial dilemma for many lawyers. It involves some clients’ objectives and the lawyer’s oath to uphold the Constitution. Resolution of the conflict is clear-cut: a lawyer/firm cannot advocate for client objectives that would require subversion of the Constitution nor can counsel take a position and/or demand relief that would cause them to do otherwise.
The Constitution, the pursuit of justice, and the rule of law are the foundations of legal purpose. They cannot be compromised regardless of client demands, personal views, or financial gain. Lawyers have a unique role advancing justice for clients and the wider society and commit to be bound by a high standard of integrity that cannot be compromised.
The legal profession, like any other group, is comprised of individuals with divergent political and social views. Notwithstanding their personal differences and preferences, all lawyers must be unified in their unflagging defense of the rule of law, the pursuit of justice, support for the Constitution, and fiduciary duty to safeguard democracy
The legal profession has largely stood on the sidelines as democracy and the rule of law have been attacked with chisels, sledge hammers, and wrecking balls. Lawyers have collectively failed to speak up—much less act— as a unified profession and with one voice. To do so is not a matter of personal choice; it is their sworn duty.
Time is running out. America and the world will soon learn whether law’s purpose has been lost or found.