EconPapers    
Economics at your fingertips  
 

Executive Lawyers: Gatekeepers or Strategic Officers?

Adair Morse, Wei Wang and Serena Wu

Journal of Law and Economics, 2016, vol. 59, issue 4, 847 - 888

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.

Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://dx.doi.org/10.1086/691359 (application/pdf)
http://dx.doi.org/10.1086/691359 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlawec:doi:10.1086/691359

Access Statistics for this article

More articles in Journal of Law and Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().

 
Page updated 2025-03-20
Handle: RePEc:ucp:jlawec:doi:10.1086/691359