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Lawyer CEOs

45 Pages Posted: 25 Feb 2017 Last revised: 31 Aug 2017

M. Todd Henderson

University of Chicago - Law School

Irena Hutton

Florida State University - College of Business

Danling Jiang

College of Business, Stony Brook University; School of Economics and Management, Southwest Jiaotong University

Matthew Pierson

Florida State University

Date Written: February 21, 2017

Abstract

We examine the value of CEOs with specialized professional skills by focusing on CEOs with law degrees and their effect on corporate litigation. We find that lawyer CEOs are associated with both lower litigation frequency and less severe litigation. This relation is observed for most of nine types of common corporate litigation. This reduction in litigation is achieved, in part, through a decrease in activities that can lead to litigation, such as earnings management, and an increase in legal oversight by directors with legal expertise. Moreover, CEOs with legal training are associated with higher value in firms with high litigation risk and growth firms.

Keywords: CEOs, litigation risk, corporate finance

Suggested Citation

Henderson, M. Todd and Hutton, Irena and Jiang, Danling and Pierson, Matthew, Lawyer CEOs (February 21, 2017). Available at SSRN: https://ssrn.com/abstract=2923136

M. Todd Henderson (Contact Author)

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States
773-834-4168 (Phone)
773-702-0730 (Fax)

Irena Hutton

Florida State University - College of Business ( email )

821 Academic Way
Tallahassee, FL 32306-1110
United States
850.645.1520 (Phone)

Danling Jiang

College of Business, Stony Brook University ( email )

306 Harriman Hall
Stony Brook, NY 11794
United States

HOME PAGE: http://sites.google.com/site/danlingjiang

School of Economics and Management, Southwest Jiaotong University ( email )

Chengdu, Sichuan
China

HOME PAGE: http://userweb.swjtu.edu.cn/Userweb/jiangdanling/index.htm

Matthew Pierson

Florida State University ( email )

Tallahasse, FL 32306
United States

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