In the early days of the industry, the U.S. legal system was the go-to for any emerging company looking for legal rules applicable to the most innovative activities in the digital sector. The processing of personal data for commercial purposes was no exception and, in this regard, the widespread perception was that “laws are generally unclear as to the constituency […] has the right to […] collect, aggregate, disseminate and use data for commercial purposes” (McKinsey, 2011). The data-driven economy has not been deterred by this uncertainty, but has instead used it to its advantage from its early stages of development. If that is the general rule, there are exceptions. This is particularly true in the field of technological innovation (Martini, Reference Martini, Ebers and Navas2020), where ex post facto solutions are more frequent than expected. In some cases, policymakers may not be willing to legally save the new industry if it eliminates the fundamental legal interests of the political regime and thus causes an unforeseen constitutional crisis (Beswick, reference Beswick2020). In these circumstances, the courts give priority to the survival of the legal system over the safeguarding of economic interests, accepting the resulting economic disruptions. This article traces the main legal-economic dynamics underlying the rise of the data-driven economy and argues that a legal bubble has shaped its evolution to date. A legal bubble is triggered by a kind of “legal innovation hype” within the justice system, where rapid consensus is formed when expectations about the validity of legal solutions are exaggerated, which in turn increases investment in the industry. This opens the door to the possibility of a slowdown and, eventually, a disruptive loop. But the key word is “with a little experience.” As I explain in more detail in my book on how to go to law school without going into debt forever, an absence in the upper echelons of the profession does not mean that an employer is willing to warmly welcome a law school graduate. And the lateral flight from the labor market is partly a function of the massive share that the recent law student bubble has taken out of the path of people now available for mid-level legal positions.

Awareness of the existence of such consequences is essential at a time when turbulent technological innovations can fuel various right-wing bubbles. Facial recognition, biotechnology and artificial intelligence are just some of the disruptive technologies that are at risk in this regard. Given that the full range of their unintended consequences is largely unpredictable in terms of threats to fundamental rights and other overriding legal interests, economic operators should consider innovative ways to guard against the risk of legal bubbles, either through innovative forms of insurance or through alternative financial protection. In turn, regulators should find institutional innovations to reduce cost asymmetries that encourage the overrepresentation of unilateral views on the legal implications of innovative solutions. They should foster the emergence of more balanced and well-founded common legal expectations. Harper`s general argument is undoubtedly correct, and it is a real cause for concern. Law societies and lawyers have begun discussing how the profession should adapt – discussions that are long overdue. The biggest problem with The Lawyer Bubble is not the warning, but the title; Unlike tulips and other speculative bubbles in the past, avocados will always be a necessity, not a fad. But the very, very difficult job market for lawyers doesn`t have the same resonance.

Similarly, the legislative powers of the EU and the US are still struggling to find a balanced approach to commodification with regard to the protection of fundamental rights, as proposed by the courts and much of the legal community (Marciano et al., reference Marciano, Nicita and Ramello2020). Even after legislative initiatives within the EU, the regulatory model has not changed in terms of content, and “legal certainty and a favourable investment climate […] does not yet exist” (Kop, reference Kop2021: 2). A period of legal fragility seems open, as the bursting of the bubble follows the gradual and continuous revocation of court support for commodification demands, with little room for policymakers to legally save the industry. This example shows how the failure of courts to properly screen and stabilize legal innovation can have unintended economic consequences for innovative services initially authorised. This time, however, the interests of trust could be thwarted in order to avoid a deeper institutional crisis and to exploit overriding legal interests hierarchically.