Lawyer CEOs

Journal of Financial and Quantitative Analysis, forthcoming

5 Pages Posted: 25 Feb 2017 Last revised: 26 Oct 2023

See all articles by M. Todd Henderson

M. Todd Henderson

University of Chicago - Law School

Irena Hutton

Florida State University - College of Business

Danling Jiang

College of Business, Stony Brook University

Matthew Pierson

Wharton Research Data Services (WRDS)

Date Written: October 17, 2023

Abstract

We study when CEOs with legal expertise are valuable for firms. In general, lawyer CEOs are negatively associated with frequency and severity in employment civil rights, contract, labor, personal injury, and securities litigation. This effect is partly induced by CEO’s management of litigation risk and reduction in other risky policies. Lawyer CEOs are further associated with an increase in gatekeepers providing additional legal oversight and a decrease in innovative activities with high litigation risk. Lawyer CEOs are more valuable during periods of enhanced compliance requirements and regulatory pressure and in industries with high litigation risk or better growth opportunities.

Keywords: CEOs, legal expertise, corporate litigation, value creation, Sarbanes-Oxley Act

Suggested Citation

Henderson, M. Todd and Hutton, Irena and Jiang, Danling and Pierson, Matthew, Lawyer CEOs (October 17, 2023). Journal of Financial and Quantitative Analysis, forthcoming, Available at SSRN: https://ssrn.com/abstract=2923136 or http://dx.doi.org/10.2139/ssrn.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

Matthew Pierson

Wharton Research Data Services (WRDS) ( email )

3819 Chestnut St
Suite 300
Philadelphia, PA 19104
United States

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