The domestication of law

Office anthropology™ The Jolly Contrarian holds forth™ →Go uptown intro sa Resources and Navigation The JC puts on his pith-helmet, grabs his butterfly net and a rucksack full of marmalade sandwiches, and heads into the concrete jungle Index: Click ᐅ to expand: Work anthropology Index: Click ᐅ to expand: Essays

All the world’s a stage,
And all the men and women merely players;
They have their exits and their entrances;
And one man in his time plays many parts,
His acts being seven ages.

— As You Like It, II vii

Just as one can make the case that humans did not domesticate wheat so much as wheat domesticated humans, so might one argue that investment banks did not domesticate big law firms as much as big law — okay, and big consultancy — cultivated the investment banks. Our IB GC genealogy refers.

For there are certain pillars of bank activity — the conduct of litigation being one, the execution corporate advisory business another and let us throw in the wheel-spinning “industry” of industry associations for a third — whose conduct so depends upon, and is in thrall to, the memetic interests and commercial imperatives of law firms, to the outright detriment of anyone else, that they are hard to see as anything other than a kind of extended phenotype for the private practice of commercial law.

The in-house legal department — a bank function all but unknown thirty years ago, but now so monstrous that it needs its own chief operating officer — really only exists to make life as easy as possible for the law firms to optimise the recording and recovery of chargeable time.

The neat evolutionary trick big here was to weaponise the agency problem by imposing structural intermediation between those who instruct the lawyers, and those who ultimately pay for them.

In an organisation big enough to have its own legal function, this is straightforward enough to describe. The decision to instruct a law firm (a corporate agent) — i.e., what it is required to do and how much it should be paid for doing it — is handled by the legal department (staffed by human agents), but paid for, ultimately, by shareholders (principals).

If the legal department is evaluated at all for the quality of its counsel management, it will be impressionistically, by people lacking technical chops to know whether wheels are being spun, and its performance is unlikely be reflected in the Christmas bonus.

But in bigger organisations this disintermediation becomes ever more baroque. Once a firm appoints a bank to advise it, all bets, and controls, are off. Here is the scenario:

Corporation, represented by its legal department (human agents) — appoints its own law firm (a corporate agent), but also an advisory bank (a corporate agent), itself represented by its legal department (human agents), who appoints its own law firm (another corporate agent) itself represented by its staff (human agents) — to advise on a transaction between the first corporation and another corporation, similarly represented.

There arises therefore a delicate chain of agencies — six would be standard in the simplest bilateral transaction — between those who instruct the firms and those who are, ultimately, expected to pay for the services rendered. By design, none of the intermediaries — agents — have personal skin in the infinite game and have only one uniting interest: to keep playing the game. But it is a powerful interest indeed.

On this view, then, investment bankers are the Zaphod Beeblebroxes and Vogons of the galaxy; not the masters of the universe they imagine, but lowly pawns in a chess game playing at an abstract level they cannot even see. These unseen hands, run the blasted furnace not for earthly gain or economic progress, but the oblique objectives of the hyper-intelligent pan-dimensional mice who actually control the universe. These uber-beings present in our dimension not as mice or dolphins but Sullivan and Cromwell partners.

The domestication of the wider economy

Lest anyone think this might stop at the gates of finance, we have non-banking examples. None better than the Post Office Horizon IT scandal, in which the lives, livelihoods and reputations of 900 sub-postmasters serve as no more than scenery for the darkest of black tragicomedies.

That the world should regard this as simple villainy, while overlooking the abstract legal pantomime it really represents only compounds the irony. For this this calumny was perpetrated notwithstanding the agency of literally dozens of lawyers. Between them, they not only failed to vouchsafe abstract justice — which arguably was not their job advocating, as they were, for one side of a dispute — but at the same time they managed to utterly demolish their own client’s reputation, franchise, business and income, which explicitly was what they were being paid to do, on their own evidence.

But the legal machine was not finished. Having perpetrated the injustice, it then examined it, at a cost (to date) £21m for the inquiry and its own counsel, £190m for the post office, and then, well here’s the list from the Inquiry’s own website:

• Post Office Limited represented by Chris Jackson, Burges Salmon LLP with legal assistance from Fieldfisher LLP (with input from Herbert Smith Freehills LLP and Peters & Peters LLP).*
  
• Fujitsu Services Limited represented by Saqib Alam, Morrison & Foerster (UK) LLP.
  
• UK Government Investments represented by Sarah Jones, Eversheds Sutherland.
  
• Department for Business & Trade represented by Peter Johnson, Government Legal Department.
  
• The Commissioner for the Metropolitan Police Service represented by Tracey Fowler, Metropolitan Police Directorate of Legal Services.
  
• Communication Workers Union.
  
• National Federation of Subpostmasters represented by Catriona Watt, Anderson Strathern LLP.
  
• Paula Vennells represented by Sonia Campbell, Mishcon de Reya LLP.
  
• The Solicitors Regulation Authority.
  
• Gareth Jenkins represented by Andrew Smith, Corker Binning Limited.
  
• The Bar Standards Board, represented by Manjit Mandair.
  
• Second Sight Support Services Limited.
  
• The individuals listed below, but for those who have been granted anonymity by the Chair, who are represented by either David Enright, Howe + Co, Neil Hudgell, Hudgell Solicitors, Mike Schwarz, Hodge, Jones & Allen or Stuart Monro, Livingstone Brown.
  

The Inquiry has the advantage, that none of its witnesses had, of perfect information, a clear view of the implications of certain actions, a non-advocational perspective, and perfect hindsight of every consequence of every action taken by each of the witnesses: consequences which cannot, at the time they were taken, have been apparent to the witnesses because if they were, plainly the witnesses would have behaved differently. This is therefore something like a show-trial: these unfortunate bureaucrats are thrown, in full view of the public, before well-armed gladiators and asked to explain, with the benefit of hindsight, decisions they took without that benefit.

To be clear: the sub-postmasters were the victims in all of this — but in just the same way that the investment banks are victims of their lawyers. The injustice against them is obvious and straightforward, and of theatrical but not dramatic interest.

The drama lies in how it can have come about. Were you to present to any of the implicated lawyers then what the world knows now, every one of them would have been horrified. Their working theory, however delusional it now seems, was that the best explanation was fraud. They did not believe the sub-postmasters. Not one of them had the malicious intent of prosecuting the innocent. That being the case, some of the perplexities of their behaviour fall away. It might have been slapdash, it might have bent rules, it might have had an agenda — it did have an agenda: to optimise the prospects of convicting people who deserved conviction. Had any of them believed differently, we should assume they would have behaved differently.

That is the difficult question: how, through the agency of so many actors, could such a calumny come about without any actual malice. Could this disaster have occurred courtesy only of the basic mediocrity of the legal profession? That is the drama of the first act. To ask, “where is the villainy?” is to ask “where is the gold with which the goose lays its eggs?” You will find yourself zeroing in on a perfidy that may not actually exist: none of the lawyers, given what they knew, what their mandates were, what they reasonably believed, and what they were being told by each other, is guilty of much beyond failing to rise above the mediocrity that beats in every breast.

The drama of the second act is just as much a