Recently posted on SSRN is an interesting article by Steven Schwarcz (Duke) entitled â€œExplaining the Value of Transactional Lawyering.â€?Â Hereâ€™s the abstract:
This article attempts, empirically, to explain the value that lawyers add when acting as counsel to parties in business transactions. Contrary to existing scholarship, which is based mostly on theory, this article shows that transactional lawyers add value primarily by reducing regulatory costs, thereby challenging the reigning models of transactional lawyers as â€œtransaction cost engineersâ€? and â€œreputational intermediaries.â€? This new model not only helps inform contract theory but also reveals a profoundly different vision than existing models for the future of legal education and the profession.
The article uses data derived from surveys completed by transactional lawyers and their clients to test the hypotheses that transactional lawyer add value by:
1.Â minimizing the potential for ex post litigation [partly supported];
2.Â reducing transaction costs [weakly supported];
3.Â reducing regulatory costs [strongly supported];
4.Â acting as reputational intermediaries [weakly supported];
5.Â providing client privilege and confidentiality [mixed]; and
6.Â creating economies of scope [weakly supported].
The findings are in brackets.
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