IDEAS home Printed from https://ideas.repec.org/a/ucp/jlawec/doi10.1086-691359.html
   My bibliography  Save this article

Executive Lawyers: Gatekeepers or Strategic Officers?

Author

Listed:
  • Adair Morse
  • Wei Wang
  • Serena Wu

Abstract

Lawyers now serve as executives in 44 percent of corporations. Although endowed with gatekeeping responsibilities, executive lawyers face increasing pressure to spend time on strategic efforts. In a fixed-effects model, we quantify that lawyers are half as important as chief executive officers in explaining variances in compliance, monitoring, and business development. In a difference-in-differences model, we find that hiring lawyers as executives is associated with a 50 percent reduction in compliance breaches and a 32 percent reduction in monitoring breaches. We ask if optimal contracting of lawyers into strategic activities implies less gatekeeping effort. Comparing executive lawyers hired from law firms to lawyers poached from corporations, we find that lawyers hired with high compensation delta (indicative of the importance of strategic goals in compensation contracts) do less monitoring, which prevents 25 percent fewer breaches than are typically mitigated by having an executive gatekeeper. Reassuringly, lawyers do not compromise compliance.

Suggested Citation

  • Adair Morse & Wei Wang & Serena Wu, 2016. "Executive Lawyers: Gatekeepers or Strategic Officers?," Journal of Law and Economics, University of Chicago Press, vol. 59(4), pages 847-888.
    • Handle: RePEc:ucp:jlawec:doi:10.1086/691359
    DOI: 10.1086/691359
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/691359
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/691359
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/691359?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mari Sako & Katsuyuki Kubo, 2018. "Professionals On Corporate Boards In Japan: How Do They Affect The Bottom Line?," Working Papers halshs-01770191, HAL.
    2. Pham, Mia Hang, 2020. "In law we trust: Lawyer CEOs and stock liquidity," Journal of Financial Markets, Elsevier, vol. 50(C).
    3. SAKO Mari & KUBO Katsuyuki, 2019. "Professionals on Corporate Boards: How do they affect the bottom line?," Discussion papers 19010, Research Institute of Economy, Trade and Industry (RIETI).
    4. Moran, Pablo & Pandes, J. Ari, 2019. "Elite law firms in the IPO market," Journal of Banking & Finance, Elsevier, vol. 107(C), pages 1-1.
    5. Gordon M. Bodnar & Erasmo Giambona & John R. Graham & Campbell R. Harvey, 2019. "A View Inside Corporate Risk Management," Management Science, INFORMS, vol. 65(11), pages 5001-5026, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlawec:doi:10.1086/691359. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JLE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.