Based on in-depth interview materials, this article examines why most rural-urban migrant entrepreneurs in Beijing do not fully comply with a discriminatory license requirement, and in particular, why they prefer license-renting from the locals. This article suggests that the law's lack of legitimacy adds weight to instrumental considerations. But more important, this license-renting practice seems to be reinforced and sustained institutionally by local businesses, law enforcement officers, and the local authorities, because their interests are inextricably intertwined with it. The whole situation constitutes a general equilibrium through which various interests are balanced. This case study thus paints a far more complicated picture of the law's impact on people's behavior than usually assumed. Instrumental concerns, or coercive action and sanctions alone, do not adequately explain people's interaction with the law in a “lawless” circumstance; a whole range of instrumental concerns must be considered, and they, together with sanctions, must be understood in the context of a larger institutional environment in which the interactions of various players unfold.