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Does the Sharing Economy Need Lawyers? And If So, What Kind?


Image credit: Sustainable Economies Law Center

In 2009, Danny Kennedy, campaign manager for Greenpeace Australia, left behind 14 years of campaigning and advocacy to found the solar energy start-up company Sungevity in California. Recently launched in Sydney, Sungevity has established a partnership with the online campaign not-for-profit Getup, paying them $150 for each new customer they refer, thus raising potentially substantial sums for campaigning at the same time as securing market expansion for what Kennedy calls ‘The Rooftop Revolution‘. This novel blend of dot com and dot org is but one instance of an expanding range of initiatives forged at the intersection of social activism and social enterprise, the topic of a public talk I gave in Adelaide late last year.

Stemming from a research project based at UNSW Law that I have been working on with Dr. Declan Kuch, ‘Between Social Activism and Social Enterprise’ views these kinds of initiatives as a creative response to resource depletion and climate change. We have been exploring small-scale initiatives in five areas: community-supported agriculture; community energy projects; car-sharing; co-working; and reuse/recycle initiatives. Together these five areas provide opportunities to restructure key infrastructural platforms (transport, energy, food, waste and work environments) that enable less carbon-intensive production, distribution, exchange and consumption.

Ordinary people, perhaps frustrated with the inertia of government policies and large-scale corporate routines and practices, are experimenting with different ways of moving around, powering themselves, securing food and making a living, with as little waste as possible.

These initiatives challenge well-worn dichotomies between public and private spheres, state and market forms of governance, and economic and social objectives. Some of them (car-sharing, co-working and reuse initiatives) use web-based technology to enable ‘access rather than ownership’, and others (community energy and community-supported agriculture) focus on connecting consumers much more closely with producers and stressing the social nature of those ties. Collectively, they could all be seen as part of the ‘sharing economy’, a catch-all term that has captured quite a bit of attention from mainstream press of late, from NPR to Forbes and The Economist.

Much more rarely explored is the question: what kind of legal and regulatory support structures will help such experimental initiatives to flourish? We think four things will matter most.

First is the choice of a legal entity for the formalisation of an initiative. This choice determines the structure of property rights and the relative centrality of profit in these efforts. New hybrid organisational forms that combine characteristics of for-profit businesses and community sector organizations have emerged in the UK, USA and Canada in recent years. Would Australia benefit from creating such an entity?

Legal support structures relating to the prevention or control of harm are the second of our four critical issues. Creative ways of providing insurance are quite central here, but it is also interesting to note how much these fledging initiatives rely on non-legal ways of compensating or preventing harm. They do so often by drawing on the embedded social relationships they are committed to fostering, whether through internet-enabled reputational feedback systems or more direct negotiations. In light of this, our third issue is closely related – the question of when (often informal) gift relations morph into, or ought to be treated as, formal contractual relations. Many initiatives rely upon voluntary labour, exemplified by the Post-Growth Institute itself, but a more general blurring of social and economic boundaries is relevant here too, as returns on investment are seldom simply monetary.

Fourth, and underpinning to all the others, the question of shared infrastructure raises interesting legal conundrums from multiple directions. These range from dedicated parking spaces for car-sharing companies to access to the national grid for community energy; from local government subsidies for co-working spaces to the existing legal rules governing food distribution for community-supported agriculture. The way that law deals with these questions turns upon whether we view shared infrastructure as a market asset, a democratic space or a commons.

So if law does matter (and it undoubtedly does and will), what kind of lawyers does the sharing economy need? Will Davies, recalling his experience in drafting the Blueprint for a Co-operative Decade for the International Cooperative Alliance, boldly claims that “twenty public-spirited lawyers could change the world” . As he observes, he is not alluding to civil rights or legal aid lawyers. Rather, it is lawyers who can manipulate equity, voting rights, debt, share, audit and so on. In seeing, as he says, “how far [these] can be tweaked in various directions, before they become something else…one starts to imagine a wholly different economy, simply through considering how freedoms, powers and responsibilities might be combined differently, via subtly redesigned legal instruments”. In other words, as Janelle Orsi puts it, ‘To most law students and lawyers, practicing transactional law isn’t an obvious path to saving the world…[but] transactional lawyers are needed, en masse, to aid in an epic reinvention of our economic system”


Image credit: Activism & Enterprise Project

We’ve found that the trajectory of many of those in this space traces various moves between activism and enterprise over the course of a career. Someone who may have begun as protesting roads, or campaigning in favour of cycling infrastructure and public transport might set up a neighbourhood carsharing club, which itself may mutate over time to a small-scale for-profit business (or even to a subsidiary of a multinational car rental company!) Profoundly different energies and skills are mobilized over such a journey.

How those shifting trajectories play out for lawyers is something worthy of exploration. Orsi and Davies are effectively calling for ‘radical transactionalism’ – a reframing of private, business legal skills that challenges established assumptions of both public interest lawyering and the kinds of traditional transactional law associated with the corporate ‘bad guys’ environmentalists have been fighting against. The legal support services currently available for cultivating this space are patchy and sparse – arguably reflecting how hard it is to retool an economy wired for scale, standardization and resource depletion.

We think our four areas for mapping law’s journey through the sharing economy are pivotal in ways not enough environmentalists currently realize, but also raise interesting questions. Is giving the sharing economy regulatory ‘room to breathe’ (for example through participating in lobbying for a crowd-funded renewable energy pilot regulatory scheme) a question of activism, or of business strategy? Would a lawyer defending a ‘disruptive start-up’ against allegations of failing to comply with current regulatory frameworks see him or herself as an activist or a professional skilled in creative compliance? Is the sharing economy really a radical new departure, or merely a familiar chapter in a well-known story of private interest theories of regulation? Follow our fledging website and join us on the exploratory journey.

 

Editorial Notes: Janell Orsi coauthored the report Policies for Shareable Cities: A Sharing Economy Policy Primer for Urban Leaders, a document aimed at local decisions makers.

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