How Lawyers (And Lawsuits) Drive Our Economy.

international attorney, international business attorney, international business lawyer, lawyer economyThe first thing we’ll do, let’s kill all the lawyers.”

This famous quote from Shakespeare’s Henry IV   has become a rallying cry, of sorts, for those who bash the legal profession.  What they forget, however, is the context of the statement.

In fact, the reason the lawyers must be killed is not to cure political corruption, nuisance lawsuits and the various other malfeasant practices ascribed to the legal profession; the reason the lawyers must be killed is so that a tyrannical king can impose his will on the populace.  Just as the clergy stands in the way of the heathen, so too the lawyers, with their knowledge of and reverence for the laws of the people, stand in the way of the tyrant.

Forget About that Awful Pew Study 

So it’s disturbing when one reads of the results of a recent poll conducted by Pew Research.  Of ten popular vocations, the legal profession is the one held in the least esteem; the one least admired, least seen as a contributor to the social good.

Perhaps even more disturbing is the fact that the percentage of participants who view the legal profession favorably fell by 5 full points (from 23% to 18%) since the poll was last conducted in 2009.  So, not only is the perception of the legal profession lower than doctors, teachers, engineers and artists, it’s sinking.

Are lawyers really the bane of society of our society?  Are they really wrecking our country?   Do they contribute anything worthwhile?  Sure, we can point to the Public Defender who represents those who cannot afford representation, the civil rights advocate who works pro bono and the legal eagle who fights for the little guy when corporate America is stomping on his toes.  But while these are all legitimate, there’s another way the legal profession has a positive impact on our lives, a very positive impact.

The Role of  Lawyers (and Lawsuits)  in Stimulating Our Economy

In 1992, a 79 year old woman spilled a cup of McDonald’s coffee on her lap, causing third degree burns and necessitating costly medical treatments.  She sued McDonald’s and was awarded more than $3 million in punitive damages by a jury.  While the details of the case are far more complicated, it became the poster child for the argument against frivolous lawsuits.

But consider the case from another perspective:  what if every time you ate at a fast food restaurant (or any restaurant, for that matter,) you faced the real possibility of injury, illness or even death?  The answer is simple:  you’d eat at home.  There simply would be no restaurant industry, and thousands fewer jobs.

But, of course, that’s not the case, at least not in our country.  Because of “frivolous” lawsuits like the one cited above, restaurant owners know the serious consequences of negligence, they can take action to avoid these consequences and therefore increase their likelihood of success.  This increases the likelihood that entrepreneurs will start restaurants or buy into a franchise operation in the first place.

Likewise, consumers can feel safe beyond a reasonable degree that their burger, taco, pizza or salad is unlikely to cause them harm.  It may sound  like a stretch, but it’s a fact:  if there were no legal recourse for the consumer, there would be no retail food industry.

But is it Just the Food Industry?

By no means.  Of course, we could say that medical malpractice lawsuits stimulate the economy in the same way.  Because of them, there is an entire subset of the insurance industry devoted to protecting doctors from these lawsuits, and it employs thousands.  But that would be a rather back-handed compliment.

Instead, think of the people employed by medical schools in order to turn out doctors who can practice medicine effectively; pharmaceutical companies who hire and pay technicians and scientists to test their products, and doctors themselves who invest in the latest and greatest equipment.  This is certainly not to say that avoiding lawsuits is the only or even the primary reason for their investments, but it is a factor.

Overall, lawyers are there as a safeguard against, you guessed it, lawlessness.  Because of laws and lawyers, people aren’t afraid to engage in commerce, to participate in the creation of wealth, which raises everyone’s standard of living.  They know that there is a system, the legal system, in place to protect them, and that they will always have recourse should they need it.

If a bigger company wants to crush a small competitor by using unfair competitive practices (like pricing at a loss till the little guy becomes insolvent,) it’s restrained by the legal system and the threat of legal action under the auspices of the smaller company’s lawyer.

I’ll put Two Hotels on Boardwalk

In the iconic board game Monopoly, the winning player is the one who can buy the most properties and run his fellow game players out of business.  That’s fine as board games go, but in real life, monopolies strangle the life out of an economy by sabotaging the free market.  But what stops businesses from becoming monopolies?  You guessed it – lawsuits.

Not always lawsuits filed by competitors, sometimes they’re brought by government agencies, but the intent is the same:  make the playing field fair.  Not level, but fair; compliant with government regulations.

So how does this stimulate economic growth, you ask? 

Imagine if there were only one Telephone Company, one drugstore chain, one airline or one computer company.  With a vise grip on the market, they could charge what they want, pay what they want and employ who they want.  In other words, their growth could very well be self-restrained by their desire to optimize profits.  They could use economies of scale to employ fewer people, produce a lesser variety of products and serve only the most profitable markets.   Our economy would be stagnant.

Fortunately, we have laws, lawyers and lawsuits to assure compliance with laws and regulations and keep the markets open for entrepreneurs.  More of us work, more of us have jobs, and more of us participate in the economy.  Not to mention, our competitive economy drives innovation and creativity, so our economic health increases and our standard of living rises.

I’ll put Two Semi-conductors on Boardwalk

Nowhere is the need for lawyers more pronounced than in hi-tech.  Originally the wild west of the business world, lawsuits over patent infringement, stolen intellectual property and copyright violations have teamed up to safeguard the integrity of high technology and its developers.  With new innovations and technical advances arriving at a dizzying pace, hi tech mavens and investors must be confident that the environment they are devoting their lives to is stable, fair and well-defined.   The law is their castle, the lawyer their knight in shining armor and the lawsuit their sword.


The next time you decide to recite that line from Shakespeare, make fun of that old lady who spilled coffee on herself or tell a joke about the legal profession, (“Why didn’t the shark attack the swimming lawyer?  Professional Courtesy.”) remember that without the ability to sue and a professional to help you, you are at the mercy of a merciless world.

And the next time your company doesn’t get paid for services performed for a very large customer, remember the value of a legitimate lawsuit, and remind your employees to acknowledge this too, for it’s their jobs your lawyer might be saving.

What do you think?

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