Hola usernamegame: Sorry to say that other posters have already responded, there is not a word for "that" (as the subject) in this sentence. In all due respect, you are inventing words that are not in the sentence. You certainly can say it that way if you wish, but it would not be a correct translation of the original sentence. And, again no disrespect to your comments, but it is not idiomatic; it is just normal Spanish.
There seems to be a fair amount of confusing going on here. It is correct Spanish for there not to be an accent on "que" in this sentence. "que" is only accented when it is used to ask a question or an implied question (i.e. as an interrogative pronoun). For instance the question "¿Qué debería hacer?" ("What should I do?") requires the accent. "No sé qué hacer" ("I don't know what to do") also requires it because in that example "que/what" is asking an implied question.
However with regards to "Es lo que dice la ley", here "que" is acting as a different type of word (a relative pronoun). "lo" and "que" are actually acting together in this sentence (to form the neuter relative pronoun) and therefore "lo que" translates to "that which" or "what". So "qué" (accented) and "lo que" can both translate to "what" but gramatically speaking, they aren't the same type of "what"!
With respect to the solution suggested below in the comments of "That is what the law says", that is not a good translation because aside from changing the subject of the sentence, there is no "that" in the Spanish as other posters have said. "lo que" means "that which" or "what" so it could be "It is that which the law says". But since "It is what the law says" sounds about 10 times better in modern English, why not just use that?
No!! They are not the same. Using the English word order is NOT acceptable.
Es lo que la ley dice. WRONG
It really helped me once i hammered in my head that in Spanish, the sentence must make complete sense FIRST and then you tack on that which you are talking about AT THE END for clarification IF NECESSARY.
Es (It is) lo que (what) dice (it/he/she says). That would be a complete thought on its own but now to clarify.....
la ley. (The law)
To assist my English brain I use a comma, even though clearly Spanish does not, to separate the parts of the phrase. Its my own little mental training wheel. For this phrase ot looks like this;
It is what it says, the law.
That REALLY helps me then properly translate into Spanish and/or recognize that form when I see it.
And for others who were confused about "what". I was taught (by Michel Thomas' Spanish course) that any time I need to say "what" in the MIDDLE of a sentence, use 'lo que'.
Duolingo says "lo que" can mean "that" in the drop down (also which or what.) Why do you say that "lo que" doesn't have that meaning here? "It is what the law says." sounds as awkward to me as the word for word translation, "It is it that says the law." A quick google tells me that "lo que" is the neuter relative pronoun and that it is used for abstract ideas. http://www.studyspanish.com/lessons/relproelque.htm
Hola Amigo,usernamegame: Yes, I agree. I think literally the sentence says: "It is that which the law says'.
"Lo que" means "that which" but in simpler English we can just say "what" as Duo translated it, above.
But I think what "rspreng" was saying above is that there is no "that" as a SUBJECT of the sentence as the previous poster "eliztipton" had suggested.