Imagine two neighbours growing vegetables in their gardens. One grows carrots and the other grows potatoes. They exchange their surplus produce over the fence, with no money changing hands. Both their lives are improved by the exchange, and there is no unnecessary work. All of the value they are producing is new and useful.

Now suppose that instead of exchanging their surplus crops they both sell them to a trader. They use the money they receive to buy the other’s produce from the trader. The trader isn’t working for nothing, and once they have taken their share the carrot grower will get fewer potatoes and the potato grower will get fewer carrots. Factor in the time and energy required to move the produce to the trader and it is clear that both the growers are worse off. It is only the trader who is winning.

After a while, the carrot and potato growers get worried about the prices at which they are selling and buying their produce. They decide to call in a lawyer (or even one each) to draw up contracts that they can enforce. Now the trader needs their own lawyer, and these lawyers also don't work for nothing. They want some of the carrots and potatoes, too.

No matter what the contracts say, the total value of consumable produce is exactly the same. Instead of growing on the back of all this additional work, the value contained in the carrots and potatoes is being spread increasingly thinly and the economy as a whole is not gaining in terms of useful production. Neither legal services nor traders add to the total of what has been produced and can be consumed.

This is not to say that lawyers, accountants, managers and other intermediaries are unnecessary in a complex social and economic system. Clearly they have their place. But since they operate as a cost on real production, since they extract their share of wealth rather than creating it from new, it makes sense to try to manage with as few of them as possible. That way there will be more work-time and resources available to apply directly to improving the quality of people’s lives.

But that's not what’s happening. The image shows the growth in the number of solicitors in England and Wales since 1981, adjusted for increases in the population. Most of these are commercial lawyers working on business or property deals. (There is still a shortage of lawyers in the criminal law system.) The blue circles show the number of solicitors in 1981: about 40,000, or eight per ten thousand people. The red circles show the number in 2022, a total of 157,000 or twenty-six per ten thousand people - over three times as many.

The legal profession is far from unique in this. Similar figures apply to accountants, management consultants, and many other financial and business services. The number of commercial solicitors, however, and the volume of transactional activity they administer, serve as a bellwether for an economic system in which the opportunities for wealth accumulation have far outpaced the growth in the real wealth being produced.

Lawyers patrol and regulate the interface between primary producers and end consumers. The huge increase in their numbers in recent decades shows how that space has widened to accommodate more and more intermediaries, all dependent on extracting and accumulating a part of the value that those primary producers create.

Data sources:

The data for solicitor numbers, which relates to England and Wales only (Scotland and N Ireland have their own legal structures) comes from the Law Society statistical reports (example here). The figures relate only to solicitors with practising certificates. Population figures are from the Office of National Statistics, here.