How ‘Big Law’ Makes Big Money 

by Adam Tooze – February 13, 2020 Issue

The New York Review of Books

“There is an estate in the realm more powerful than either your Lordship or the other House of Parliament,” one Lord Campbell proclaimed to the peers in the House of Lords, in 1851, “and that [is] the country solicitors.” It was the lawyers, in other words, who kept England’s landed elite so very, well, elite: who shielded and extended the wealth of the landowners, even granting them legal protection against their own creditors. How did they pull off this trick? Through a nimble tangle of contracts, carefully and complicatedly applied, as Katharina Pistor explains in her lucid new book, The Code of Capital: by mixing “modern notions of individual property rights with feudalist restrictions on alienability”; by employing trusts “to protect family estates, but then [turning] around and [using] the trust again to set aside assets for creditors so that they would roll over the debt of the life tenant one more time”; and by settling the rights to the estate among family members in line for inheritance. Solicitors maximized their clients’ profits and worth through strategic applications of the central institutions at their disposal: “contract, property, collateral, trust, corporate, and bankruptcy law,” what Pistor calls an “empire of law.”

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The Code of Capital brings together the ferment in American law schools and the more broad-based continental critical tradition, with concerns derived from Thomas Piketty’s history of inequality and recent thinking within so-called heterodox economics about the unstable nature of financial capitalism. The result is nothing less than a crisis theory of law. Law as it currently functions is, for Pistor, constitutive of the order that creates and perpetuates inequality, opacity, dysfunction, and crisis, and ultimately puts at risk the legitimacy of the rule of law as such.