When actress Jill Hennessy’s character, Clair Kincaid, was introduced to viewers of “Law and Order,” part of her role as the new, young assistant district attorney was to ask questions – mostly about what her boss, Jack McCoy, was doing, and why.
McCoy was played by Sam Waterston, and after he outlined one particularly unsavory plea bargain deal with a defense attorney, Hennessy’s character asked, “Where’s justice in this?”
McCoy replied, “This isn’t about justice. It’s about justice until there’s an indictment. Then it’s about winning.”
The producers of the show were not deluged with letters saying that McCoy had it all wrong. In fact, sadly, he had it all pretty much right on the money.
Money, as it happens, plays a very important role in winning. The relationship between economics and the law is fascinating, and it has been explored by many distinguished scholars, including Gerald Posner and Gary Becker.
There is no single area within this subject though, that is more interesting than the role money plays in determining the outcome of a trial.
It is not a new thing. As a young man, Abraham Lincoln saw that even in the near-frontier courtrooms of Illinois in the 1840s, the winner in a jury trial was most often the person with the better lawyer. And when the strong elements of meritocracy in the legal industry intersect with the free-market system, the result is that the better lawyers are often the better-paid lawyers.
The ability to pay for a legal defense is, then, a key element of our constitutional right to a fair trial. This has been recognized for a long time by our courts, and even shows up in the Miranda warning that we all know by heart from watching television: “You have the right to remain silent … You have the right to speak with an attorney and to have an attorney present during any questioning. If you cannot afford a lawyer, one will be provided for you at government expense.”
The big money doesn’t always win, but it works out that way often enough so that economics affects the actions of both sides.
In part because of the nature of news media coverage of trials, we tend to think of this issue in terms of the relative wealth of defendants. Famous, wealthy defendants can afford to hire legal “dream teams” that outmaneuver and overwhelm the prosecution and provide their clients with the best chance of winning in court.
For most people, though, the justice system looks very different. State and local governments command an array of legal and law enforcement resources that stacks the odds in their favor.
And anyone unfortunate enough to have the federal government as a legal adversary faces fearsome odds. The legal and economic resources available to federal prosecutors are not infinite in total; they have budgets, too. But money and legal resources can effectively be limitless for any particular case. It is intimidating … and they don’t like to lose.
The result is that when faced with the threat of federal prosecution most people, and most companies, even the large ones, cave. Plea bargaining then substitutes for a jury trial.
The federal government isn’t satisfied with “most,” though, and sometimes tries to extend its advantage by limiting the legal resources available to defendants. In a recent tax shelter case involving KPMG, the international accounting firm, federal prosecutors threatened a criminal indictment against the company – a mortal blow to an accounting firm – unless they cut off legal defense money to its 19 officers that the feds had charged.
Manhattan Federal District Court Judge Lewis Kaplan has now dismissed the criminal indictments for 13 of the KPMG defendants, writing that the federal government’s attempts to deprive them of legal fees “…shocks the conscience” and violated their due process rights under the Constitution.
The case is a reminder of how dependent our economic system is on our legal system. The tax law under which KPMG was being prosecuted is incredibly complicated and imprecise at best, and it is not clear at all how a court case would turn out. It is not surprising, then, that the federal government preferred to win outside of court.
This case was about economics, about business practices. Maybe KPMG was marketing abusive tax shelters, and maybe they weren’t. That should be for the court to decide.
Moving the justice system out of the courtroom into the hands of prosecutors with the power to cut off the livelihood of a business and to choke off the money for legal defense can’t be a good thing for our economy, or for justice.
But, maybe Jack McCoy had it right. It isn’t about justice. It’s about winning.
James McCusker is a Bothell economist, educator and consultant. He also writes “Business 101” monthly for the Snohomish County Business Journal.
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