Interviews were conducted with 25 lawyers formerly employed in diverse work environments in the Soviet Union. They had worked as arbitrators and legal advisors. The lawyers were emigres living in Israel, Canada, and the United States. The hidden economy has proliferated, in direct violation of both civil and criminal law, because it introduces incentives and flexibility into the Soviet system. Therefore, the Soviet authorities have opted not to use the legal weapons necessary to combat this major drain on the first economy. As a result, management has resisted a more forceful legal presence in their organizations. The individuals assigned responsibility for enforcing the law therefore lack the requisite power and authority necessary to carry out their duties. Often the lawyers themselves are unwilling to combat an unofficial system from which they, too, benefit. Disciplinary action against high-level personnel in the second economy is infrequent because these individuals have the personal connections and status that protect them. However, disciplinary action is taken against workers when management insists on it. Actions can include court suits against employees, criminal penalties, comrades' courts, and circuit court sessions. Six notes and 17 references are provided.