Do Lawyers Matter in Initial Public Offerings?

58 Pages Posted: 8 Dec 2022

See all articles by Thomas W. Bates

Thomas W. Bates

Arizona State University - Department of Finance

Jin Roc Lv

Australian National University (ANU)

Jordan Neyland

Bentley University - Department of Finance

Date Written: November 10, 2022

Abstract

This study provides novel evidence that law firms representing issuers have a material impact on economic outcomes in the IPO market. Fixed effects for legal counsel explain a significant portion of the variation in IPO underpricing, comparable to underwriter fixed effects documented in prior studies. Issuer law firms also exhibit differential skill in moderating the likelihood of IPO-related litigation, and have an idiosyncratic influence on the structure of IPO disclosures. Accounting for endogenous selection, we document that law firms associated with lower rates of IPO-related litigation are also associated with less first-day underpricing and receive higher fees from their clients.

Keywords: IPO, Lawyers, Disclosure, Underpricing, Litigation, Fixed Effects

JEL Classification: G10, G18, G38, K22

Suggested Citation

Bates, Thomas W. and Lv, Jin Roc and Neyland, Jordan, Do Lawyers Matter in Initial Public Offerings? (November 10, 2022). Available at SSRN: https://ssrn.com/abstract=4274529 or http://dx.doi.org/10.2139/ssrn.4274529

Thomas W. Bates

Arizona State University - Department of Finance ( email )

W. P. Carey School of Business
PO Box 873906
Tempe, AZ 85287-3906
United States

Jin Roc Lv

Australian National University (ANU) ( email )

Canberra, Australian Capital Territory 2601
Australia

Jordan Neyland (Contact Author)

Bentley University - Department of Finance ( email )

175 Forest Street
Waltham, MA 02154
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
233
Abstract Views
841
Rank
256,127
PlumX Metrics