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Business Law Today

August 2022

How General Counsels Battle the Weaknesses in the United States Rule of Law

Dredeir Roberts


  • The Rule of Law (“ROL”) in the United States is a standard—but not the gold standard. Certain features of the U.S.ROL’s structure make it harder for businesses to uphold the ROL and for general counsels to advise business clients.
  • It is uncertain whether full compliance is even possible within the U.S. legal system, particularly when operating across state lines, which lessens clients’ motivation to put effort into ensuring compliance. GCs have to spend time translating the law in a way that will be understood and will foster compliance.
  • It is difficult to advise a business when legal outcomes are unpredictable, especially when unwritten local rules come into play.
  • Clarity, not deregulation, is the answer. GCs should advocate for clear, coherent, and consistent laws that apply across the country.
How General Counsels Battle the Weaknesses in the United States Rule of Law

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Most discussions about the Rule of Law (“ROL”) in the United States focus on either the criminal legal system or how the U.S. ROL is a goal to be attained by developing nations. Less attention is given to evaluating how the fundamental structures of the United States legal system impact its ROL strength. While the ROL in the United States is a standard, I have found in my practice as a General Counsel (“GC”) that the U.S. ROL is not the gold standard. Further, the current state of the U.S. ROL is not an inherent side effect of a developed legal system; rather, it is a product of choices we have made about how to structure the U.S. ROL.

A country with a healthy ROL “requires the law be: validly made and publicly promulgated, of general application, stable, clear in meaning and consistent, and ordinarily prospective.” As a GC, I have found that certain features of the U.S. ROL make it harder for businesses to uphold the ROL. For example, instead of an independent government body in charge of legislative language and drafting, we have chosen the collaborative, and often adversarial, process of having statutes born out of political parties’ compromises and deal-making. This process does not ensure clear, concise, and coherent statutes that the public can easily understand but instead tends to produce convoluted and incoherent statutes that are the product of so much give and take that by the time they reach the president’s desk, the entire point of drafting the law in the first place may be lost. Another example is that instead of having a judicial system that encourages trials and frequent judicial opinions, our system encourages settlements and plea deals, thus reducing how often the law is applied to new facts. While settlements and plea deals are efficient, they limit the public’s ability to learn how the law will apply to different facts and scenarios to help guide the public on what can and cannot be done. While the ROL in the U.S. has many healthy features, its struggles with indeterminacy and a new shift toward inconsistency weaken the ROL and play a large role in the challenges I face as a GC.

How the ROL Impacts My Practice

The above-stated design choices make it difficult for GCs to advise business clients trying to scale their operations. Our clients’ customers expect their businesses to follow them all over the country as seamlessly as information travels across the internet. Our clients also expect their GCs to advise them on exactly how to meet client and customer expectations while operating within the confines of applicable laws. However, the deficiencies in the U.S. ROL make this job an extraordinary challenge by: (1) increasing how much time GCs must spend with our clients explaining why they must try to be compliant, because it discourages them that total compliance is impossible in many areas; (2) increasing the difficulty of translating the law to our business stakeholders clearly and concisely, since our ROL is neither clear nor concise; and (3) increasing the difficulty in advising businesses on legal strategy because legal outcomes are unpredictable.

Time Spent Convincing the Business Impossible Compliance Is Worth Its Time and Money

ROL principles concerning the generality, clarity, publicity, stability, and prospective nature of the norms that govern a society offer significant value and benefits to business. Rarely do business stakeholders intend to operate their business outside of the confines of the law. However, their motivation to put effort into ensuring compliance is decreased by uncertainty that full compliance is even possible within the U.S. legal system. These compliance challenges become magnified when businesses operate across state lines, as: (1) following the law in one jurisdiction does not ensure compliance with another jurisdiction; (2) it may be unclear which laws apply to the business; and (3) the lack of uniform enforcement makes it appear as though some businesses are allowed to operate outside of the law while others are not. This creates a challenge for GCs, who constantly have to start compliance programs by convincing our clients that compliance, even while elusive, is worth the effort and resources. We must spend time and energy convincing them that it is better to try to comply rather than to ignore and deal with the consequences later. When the law is unclear or impossible to fully follow, unhelpful questions leak into the compliance discussion. Our clients start to wonder, what is the probability of enforcement? Are any of my competitors also following this law? The lack of clarity in the U.S. ROL fills my day with keeping business stakeholders motivated to try to become compliant, even when full compliance is not attainable.

Translate the Law to Business Stakeholders Clearly and Concisely

As in-house attorneys, we often get questions about the law in a format where the business stakeholder wants to know just enough law to legally run their business, but not so much as to become experts in the legal field. However, due to the complexity of the ROL, it is a constant challenge to successfully translate the law in a way that will be understood—and understood in a way that fosters compliant behavior. We try to come up with phrases that are easy to remember and simple to perform. One method of communicating the law to increase compliance is to pick the strictest state law and apply that policy requirement across all business operations across the country. The drawback of that approach, however, is that it gives local businesses a potential advantage because a local business does not have to comply with the laws of stricter states. We are often battling how much to rely on these cheat codes for communicating legal concepts to our clients because they come with legal and business risks.

At the core of why translating the law to our clients is so difficult, is that if you tell your clients everything they need to know and do to become compliant, they will not be able to internalize it and are therefore unlikely to follow the law (which is the ultimate goal). I see my job as a GC as one that entails not simply the act of informing the business about the law, but rather informing the business in a way that moves stakeholders’ behavior toward compliance. A good example of this dilemma is the length of employee handbooks. It is generally accepted that as the length of employee handbooks increases, the likelihood that employees will read them decreases. This catch-22 would not exist if there was more consistency in employment laws across the country. Playing the balancing act—providing just enough information to make sure the business is advised, but not so much information the individuals who implement the advice feel overwhelmed and ignore all guidance—feels like walking a tightrope on the best of days. As the internet inevitably pushes business across borders, a simplified legal system that is consistent across state lines would mitigate how much legal information is required for a business to simply sell its widgets and services across the country and thus limit the legal communication gymnastics required of a GC.

Advising the Business When Legal Outcomes Are Unpredictable

As stated above, the structure of the ROL in the United States makes it especially difficult to predict how a judge or regulator will interpret specific facts due to how infrequently guidance and decisions are issued. However, it is our job to give our client the likelihood of legal outcomes to help the business allocate resources and decide on business strategy. Recently, fast-changing political and legal regimes have made it even harder to predict where a court or regulator will land on a legal issue. Because more laws and policies, no matter how generic, are now interpreted in ways that have more to do with the personal and local politics of the government adjudicator than their text, there is even less predictability for legal outcomes.

As a GC, I experience the negative impacts of local unwritten rules when we go to court in jurisdictions all over the country. Some local courts prefer local attorneys. It is not a written rule, but it is the local ROL. How do you advise your client on the winnability of a case if an unwritten local rule is going to play a larger role in the success of your case than the written law and the facts? As a GC, I have to spend time investigating whether unwritten home rules could impact our case in certain jurisdictions. This is a breakdown in one of the main ROL principles, which is that laws must be public. Local unwritten ROL is often discussed in the context of business risk in developing nations, but it is very much a feature of the U.S. ROL that needs far greater attention.

How GCs Can Support the ROL

GCs must advocate for clear, coherent, and consistent laws that apply across the country. We should push our clients to see the long-term benefits of moving lobbying away from advocating for confusing loopholes that benefit our clients in the short term and toward lobbying for laws that increase the determinacy of our ROL. To be clear, this is not a call for “de-regulation.” I don’t believe in that approach because I have found no difference in the complexity of a statute advertised as “de-regulated” versus “regulated.” I have to read them both, and a “de-regulated” statue still requires me to train staff on what they must do to get the benefit of the “de-regulation.” A better framework is to focus on what our clients actually need, clarity. Our clients need clarity in both their legal obligations and the advice they receive from their GC so that they can make the best business decisions possible. Most of all, our clients need to focus as much of their time as possible on providing the best products or services to their customers, not on state-specific compliance training.

As in-house attorneys, we should always remember that we play an active role in creating or damaging the ROL in the United States. Every time we advise our clients, advocate to regulators, and go before a judge, we ask for a certain type of ROL to exist in the country. The question is, will our request improve or damage the ROL we seek in the U.S.?

“How General Counsels Battle the Weaknesses in the United States Rule of Law” is part of a series on intersections between business law and the rule of law, and their importance for business lawyers, created by the American Bar Association Business Law Section’s Rule of Law Working Group.