Fixing the Law’s Bias Against Sharing

In the quest to imagine and build a new “sharing economy,” one factor that is often overlooked is law.  What shall be the role of formal law in a world of social enterprises, shared workspaces, cohousing, car-sharing groups, tool-lending libraries, local currencies and crowdfunding?  Who has legal rights in these various contexts, and what do they look like?  Who holds the legal liabilities?

These questions are sometimes ignored by commoners who consider the law a retrograde, irrelevant force to be avoided.  But even among those who acknowledge the inescapability of conventional law, the contours of legal rights and liabilities are not always self-evident because the law tends to be silent about commoning, or construes such activities in archaic legal categories. The law as it now stands presumes that we are either businesses or consumers, employers or employees, or landlords and tenants.  Production and consumption, and investment and usage, are "naturally" considered separate activities pursued by different people. 

But nowadays countless activities in the sharing economy are blurring old categories of law. There may be many parties involved in managing a a workspace, childcare facility or online information, or perhaps many people have ongoing relationships and responsibilities and entitlements that are collective and evolving. Should the strict letter of the (archaic) law necessarily trump our informal, self-negotiated social rules? 

Janelle Orsi, director of the Oakland-based Sustainable Economies Law Center, has tackled these and many other such questions in a terrific book, Practicing Law in the Sharing Economy:  Helping People Build Cooperatives, Social Enterprise and Local Sustainable Economies (ABA Publishing).  The book covers a monumental array of legal topics that are relevant to the sharing economy.  Most of the chapters deal with how to craft agreements that validate special forms of sharing – for example, how to form organizations, how to exchange with each other and how to invest in each other’s work.  There are also chapters for shared working arrangements, mutual provisioning, sharing rights to land, sharing rights to intellectual property, and managing collective risks.  

Orsi notes that while a great deal of attention is focused on the social or technological systems for inventing a “new economy,” relatively little attention has been focused on the mundane but vital role of everyday law.  We like to think that informal social arrangements are adequate – and indeed, they are a vital engine of commons and other sharing activities.  However, as Richard Stallman and Larry Lessig discovered when trying to advance sharing in software code and creative works, sometimes there is no substitute for the formal recognition of conventional law.  Sometimes it is needed if only to serve as a credible token that you are capable of enforcing your self-chosen commoning arrangements (as the GPL in software and Creative Commons licenses do). 

Orsi’s book exemplifies this spirit, but with a keen practical edge.  She also calls on lawyers to help build new legal structures and contracts that will support the new sharing economy.  “Transactional lawyers are needed, en masse, to aid in an epic reinvention of our economic system,” she writes.  Thus the book goes beyond advising about specific bodies of law (cooperatives, land, zoning, capital raising, etc.) to also advise lawyers how to practice law in ways that assist the sharing economy. 

For example, Orsi urges more lawyers to break from their reliance on legal boilerplate and standardized forms, and to cultivate mediation and facilitation skills.  She urges law schools to train their students how to engage with the sharing economy, and advises existing lawyers how to structure a sharing economy law practice, including the possibility of a “law collective.”

The book also has some useful sidebar essays on practical legal challenges for specific aspects of the sharing economy.  For example, what are the legal issues in launching community solar projects, especially with respect to public utilities?  What special capital financing model was used by Equal Exchange, the fair trade coffee company, to build its enterprise? 

At 607 pages, Practicing Law in the Sharing Economy will be a landmark reference tool for law and the sharing economy for years to come.  May it inspire more law students to enter this under-served field of law, and may it help catalyze changes in law and public policy to affirmatively support the new modes of sharing that are popping up all over.  The mismatch between the burgeoning sharing economy and legacy legal regimes urgently needs to be addressed.