Earlier quoted context omitted.
This is worse. This leads to lawyers making the critical decisions instead of regulators and auditors. The latter group at least has some familiarity with the subject area.
No, judges and juries decide lawsuits. They have the benefit of being harder to bribe than regulators.
One leads to the other. Lawyers start making a bunch of decisions on corporate strategy and product design because they have to anticipate the rulings of judges and juries. Their decisions are usually going to come late in the game though, leading to lots of last minute, shoehorned changes because they aren't able to review early enough in the development process (since lawyers are expensive and you can't get enough of them be involved early).