The various Chinese state forms have all combined the two, but varied greatly in emphasis. Even in periods where "li" were most emphasized, some degree - however small - of "fa" was thought necessary for extreme or persistent anti-social activity. Of course there is no overlap whatsoever between (Confucian) "li" and extreme individualist anarchism; "li" assumes that individuals emerge from (and both reproduce and transform) pre-existing society.
A society that depends primarily on "li" rather than "fa" for its functioning and reproduction does not need - as far as I can see - of necessity to be Confucian-hierarchical. And, I guess in a difference both with Justin's socialist market contract lawyer utopia and hierarchical planning models, I would hope that a decent society of the future would regulate even its economic metabolism by "li" - that groups and individuals would work for the common good out of shame of being seen to be greedy individualists, if not out of unreflective socialization. And disputes and misunderstandings would be resolved by methods analogous to mediation rather than litigation.
In modern China, both before and after the Dengist turn toward the expansion of capitalist social relations, in practice there's a continuing reliance on "li" (mediation model of dispute resolution) rather than the "fa" of the (extreme individualist) rights and litigation based modern Anglo-US model - though I'm told that at least among some academics extremes of "free market" individualist rights and litigation discourse have been fashionable for years. The last thing on this I looked at was Pitman Potter's _The economic contract law of China_ (1992) ; there's a book of his out last year from Routledge on the Chinese legal system that I haven't looked at yet.
Justin, if you're writing on the general subject, I'd think this deserves at least a footnote.
john mage