Legal Expertise and the Role of Litigation Risk in Firms' Conservatism Choices

2021 ◽  
Author(s):  
Jonathan Black ◽  
Charles G. Ham ◽  
Michael D. Kimbrough ◽  
Ha Yoon Yee
Keyword(s):  
Senior Management ◽  
General Counsel ◽  
Litigation Risk ◽  
Legal Environment ◽  
Ninth Circuit ◽  
Legal Risks ◽  
Legal Costs ◽  
Net Assets ◽  
Legal Expertise

Firms face a greater risk of lawsuits for overstated rather than understated earnings or net assets, suggesting conservatism can reduce firms' expected legal costs. Because managers with legal expertise are more likely than other managers to recognize the legal benefits of conservatism, this study examines whether legal expertise among members of senior management promotes greater conservatism. Consistent with this prediction, we find that firms with a general counsel (GC) in senior management (our proxy for legal expertise) report more conservatively. We also find that GC firms recalibrate their conservatism levels in response to changes in the legal environment-their conservatism choices are more responsive to litigation against peer firms and to two judicial rulings that affected the litigation risk for firms located in the Ninth Circuit. Overall, our findings suggest that populating senior management with legal experts affects the extent to which a firm's level of conservatism incorporates legal risks.

scholarly journals Tone From the Top: The Role of the General Counsel in the Prevention of International Sports

2021 ◽  
Vol 3 ◽  
Author(s):  
Andrea Carska-Sheppard ◽  
Sarah Ammons
Keyword(s):  
Public Policy ◽  
Human Rights ◽  
Executive Leadership ◽  
Vital Role ◽  
Legal Issues ◽  
General Counsel ◽  
Essential Factor ◽  
Policies And Procedures ◽  
Legal Risks

To prevent harassment and abuse in sports, the consensus is that an essential factor is “tone from the top” of the organization. It is key as a catalyst and sustainer of change, whether in the corporate or sports world. An organization's general counsel is one of the go-to top advisors for executive leadership regarding laws and regulations. Additionally, they serve as advisors for issues in other areas, such as public policy, ethical and legal risks, and human rights. With their leadership, general counsels can play a vital role in the prevention of harassment and abuse in an organization. The guidance and leadership of the general counsel should facilitate reviewing and strengthening of the organization's policies and procedures and other strategies helping to prevent and address issues of harassment and abuse. Legal issues become more complex the more global the organization, so more complex strategies are needed to tackle these issues successfully.

Legal Expertise and the Role of Litigation Risk in Firms’ Conservatism Choices

2021 ◽  
Author(s):  
Jonathan Black ◽  
Charles Ham ◽  
Michael D. Kimbrough ◽  
Ha Yoon Yee
Keyword(s):  
Litigation Risk ◽  
Legal Expertise

scholarly journals Telaah Literatur Tentang Faktor-Faktor yang Mempengaruhi Konservatisme Akuntansi

2012 ◽  
Vol 8 (2) ◽  
Author(s):  
Lia Alfiah Dinanar Hati
Keyword(s):  
Conflict Of Interest ◽  
Financial Distress ◽  
Accounting Conservatism ◽  
Litigation Risk ◽  
Political Costs

This paper examine several factor that impact to accounting conservatism practice. Conservatism is commonly defined as the differential verifiability required for recognition of profits versus losses. Regardless of the different opinion about role of accounting conservatism, in fact, this principle is still in uses until now and be one of the dominant principle in accounting. Through this article the author do review of several previous studies about accounting conservatism at Indonesia and other country. From several review we conclude that accounting conservatism is affected by factors of contracting, litigation risk, political costs, regulations, financial distress and conflict of interest between shareholders and bondholders.

Capital Account Liberalization and Firm Innovation: Worldwide Evidence

2021 ◽  
pp. 0148558X2110594
Author(s):  
Fangfang Hou ◽  
Xinpeng Xu
Keyword(s):  
Positive Impact ◽  
Set Covering ◽  
Capital Account ◽  
Legal Environment ◽  
Firm Level ◽  
Firm Innovation ◽  
Capital Account Liberalization ◽  
Data Set ◽  
Innovation Output

This study investigates whether capital account liberalization, a leading characteristic of globalization, is associated with firms’ future innovation output. Employing a novel firm-level panel data set covering 41 countries over two decades, we show that capital account liberalization is significantly associated with higher corporate patenting activities, particularly for firms from innovation-intensive industries. Further analyses show that the effect is stronger among firms from economies in a better legal environment, signifying the important role of good institutional quality in facilitating the positive impact of liberalization. The effect is also stronger among firms with higher initial productivity, consistent with the “productivity” hypothesis, according to which bigger and more productive firms generate more innovation after liberalization. Our findings are robust to the use of various measurements, subsamples, and estimation models. This study provides global firm-level evidence of the real economic impact of financial globalization.

Could Patient Engagement Promote a Health System Free From Malpractice Litigation Risk?

2018 ◽  
pp. 431-454
Author(s):  
Massimo Miglioretti ◽  
Francesca Mariani ◽  
Luca Vecchio
Keyword(s):  
United States ◽  
Patient Engagement ◽  
Professional Education ◽  
Medical Malpractice ◽  
Large Scale ◽  
Active Role ◽  
The United States ◽  
Litigation Risk ◽  
Malpractice Litigation

In recent decades, medical malpractice litigation experienced a large-scale expansion in the United States as well as in Europe, involving both medical and surgical specialties. Previous studies have investigated the reasons why patients decide to sue doctors for malpractice and highlighted that adverse outcome, negative communication with doctors and seeking compensation are among the major reasons for malpractice litigation. In this chapter, patient engagement is discussed as a possible method for reducing the risks of doctors being sued for medical malpractice. The results of a first qualitative study underline how an active role for patients and their engagement in the treatment definition and execution could be a way to limit the occurrence of malpractice litigations. However, a second study noted that in Italy, many patients are still struggling to become involved in the process of their care. The authors discuss the role of professional education in promoting patient engagement in Italy.

Evolution of the Role of General Counsel

2013 ◽  
pp. 27-34 ◽  
Author(s):  
E. Norman Veasey ◽  
Christine T. Di Guglielmo
Keyword(s):  
General Counsel

scholarly journals Risks and Prices: The Role of User Sanctions in Marijuana Markets

2010 ◽  
Vol 10 (1) ◽  
Author(s):  
Rosalie Liccardo Pacula ◽  
Beau Kilmer ◽  
Michael Grossman ◽  
Frank J Chaloupka
Keyword(s):  
Drug Markets ◽  
Ceteris Paribus ◽  
Legal Risk ◽  
Drug Prices ◽  
Policy Debates ◽  
Legal Risks ◽  
Level Information ◽  
Short Run ◽  
The Impact

Abstract User sanctions influence the legal risk for consumers who engage in illegal drug markets. If a reduction in user sanctions leads to an increase in consumption, drug prices will rise unless supply is perfectly elastic. In equilibrium, a change in consumption associated with decreasing user sanctions could be relatively small if supply is upward sloping. Using a novel dataset with rich transaction-level information, this paper evaluates the impact of recent changes in user sanctions for marijuana on marijuana prices. The results suggest that lower legal risks for users are associated with higher marijuana prices in the short-run, which ceteris paribus, implies an upward sloping supply curve, higher consumption, and higher profits for drug dealers. The findings have important implications for the current policy debates regarding decriminalization of marijuana.

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