Academic and author Gillian K. Hadfield is a pioneer in pushing the current legal system into the 21st century.
Hadfield is a Faculty Affiliate at the Vector Institute for Artificial Intelligence in Toronto and the Center for Human-Compatible AI at the University of California, Berkeley. She is also teaching Legal Design Lab (with Dan Ryan) at the University of Toronto. Her research is focused on the need to reform and redesign legal systems in market democracies.
Her book, Rules for a Flat World, goes into great detail on why we need to radically rethink today’s legal system in the face of globalization, digital technology and artificial intelligence. Hadfield says, “We are at an inflection point in the evolution of legal systems, facing the need to reinvent how we do law.”
According to Hadfield, the existing regulatory structures “inhibit innovation in law to meet the needs of the new global economy and the potential for more market-based methods of providing legal inputs to support economic growth, democracy and global integration.” In her 2017 book she asserts that in order for the legal system to better support the global economy the world over, we need to rethink the rules and rule systems in their entirety.
Current approaches to law, Hadfield continues, are not only not helping…they are making matters even worse. She points out that the problem is not that we have too much law, but rather “the way we have gone about producing law for the last few hundred years—exclusively through state-controlled political institutions such as legislatures, state-run courts and lawyer-controlled legal professions—is starting to max out on its ability to manage the burgeoning economic and social complexity to which it has played midwife.”
Hadfield eloquently argues why the existing legal system is no longer sustainable in today’s globalized and digitized market. The challenges with globalization and technology are well-documented, and Hadfield’s research brings a unique twist by focusing on how the legal system is hindering progress of a modern economy.
I especially like that Hadfield’s work focuses on making law more available, applicable and capable of contributing to innovation and growth. One of my pet peeves is that lawyers have a strict black-and-white approach when it comes to supplier relationships. Those with the most power use their muscle to tip legal terms and conditions to their benefit (e.g., sorry supplier, your work is work for hire and I own the Intellectual Property and we have a 30-day termination for convenience). So, you can imagine why I admire Hadfield for her progressive thinking and writing.
One of my favorite areas of interest in Hadfield’s work is around how social norms play a role in the legal system. She believes that social norms are not something established and born of an enterprise, or championed by an entrepreneur with an agenda, but rather that they are “organic” and emerge in processes that are sometimes hidden. Although, she says that no one really knows how a norm becomes a norm, it is “when norms become the subject of a deliberate project intended definitively to designate a particular set of rules, including the rules for making rules, as ‘law’ that social norms can become law.”
This is where the Vested business model for relational contracting is important, because Vested embeds social norms, or guiding principles, into the contract. In effect, what are commonly referred to as “unofficial rules” are made law. Would lawyers or a legal department come up with that innovation? Perhaps in some cases, but as Hadfield suggests, innovation requires not only deep expertise, but also a fresh set of eyes to reframe a problem and have the breakthrough moments required.
The trick, as Hadfield says, is to build a stable legal platform that accounts for increasing complexity…AND makes room for innovation. That is quite a trick indeed. What’s needed are creative ways to manage enormously challenging, costly and dynamic strategic relationships. Hadfield’s tip? Don’t hire more lawyers; instead, harness markets for legal innovation.
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