85 Pages Posted: 3 May 2001

See all articles by Randall S. Thomas

Randall S. Thomas

Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Law School

Stewart J. Schwab

Cornell Law School

Robert G. Hansen

Tuck School of Business at Dartmouth

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This paper documents and explains the amazing growth of the largest firms in law, accounting, and investment banking. Scholars to date have used various supply-side theories to explain the growth, and have generally examined only one industry at a time. We give the first demand-side explanation of firm growth, and show how the explanation is similar for firms in all "project" industries. We show that law plays an important role in determining industry structure.

Among the areas we cover are the growth of Multi-Disciplinary Practice firms. We argue that the issues surrounding MDPs can best be understood by looking more broadly at the forces driving project industries. We also explain the driving forces behind the breakup of the Big Five accounting firms, the consolidation of the investment banking industry and the heretofore unexamined divergent growth patterns of the law firms in the plaintiffs' securities litigation field.

JEL Classification: K0

Suggested Citation

Thomas, Randall S. and Thomas, Randall S. and Schwab, Stewart Jon and Hansen, Robert G., Megafirms. Available at SSRN: or

Randall S. Thomas (Contact Author)

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States

Stewart Jon Schwab

Cornell Law School ( email )

Myron Taylor Hall
Ithaca, NY 14853
United States
607.255.8584 (Phone)
607-255-7193 (Fax)

Robert G. Hansen

Tuck School of Business at Dartmouth ( email )

Hanover, NH 03755
United States
603-646 2079 (Phone)
603-646-1308 (Fax)

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