Institutional Affiliation: Queens University
|Executive Lawyers: Gatekeepers or Strategic Officers?|
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Lawyers now serve as executives in 44% of corporations. Although endowed with gatekeeping responsibilities, executive lawyers face increasing pressure to use time on strategic efforts. In a lawyer fixed effects model, we quantify that lawyers are half as important as CEOs in explaining variances in compliance, monitoring, and business development. In a difference-in-differences model, we find that hiring lawyers into executive positions associates with 50% reduction in compliance breaches and 32% reduction in monitoring breaches. We then ask whether firms’ optimal contracting of lawyers into strategic activities implies less lawyer gatekeeping effort. Using a design comparing executive lawyers hired from law firms to lawyers poached from corporations, we find that lawyers hired with high c...
Published: Adair Morse & Wei Wang & Serena Wu, 2016. "Executive Lawyers: Gatekeepers or Strategic Officers?," The Journal of Law and Economics, vol 59(4), pages 847-888.