Lawyers are the dispute resolution mechanism that allows an economy full of people trying to screw each other (and trust me, as long as economies are full of people, they will be trying to screw each other) to work. The article is based on the reasonable premise that a bigger dispute resolution system contributes to GDP to a point, then starts hurting the economy beyond a certain point.
Note bene: you say "in 1994" as if we should assume the problem has been getting worse over time, but in reality the size of the legal sector as a %-age of real GDP has been decreasing since it peaked in the late 1980's: http://amlawdaily.typepad.com/.a/6a00e55044cbaf883401543574d...