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The Limits of Lawyering: Legal Opinions in Structured Finance

45 Pages Posted: 31 Jan 2005  

Steven L. Schwarcz

Duke University School of Law

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Date Written: March 3, 2005


Significant controversy surrounds the issuance of legal opinions in structured finance transactions, particularly where accountants separately use these opinions, beyond their traditional primary use, for determining whether to characterize the transactions as debt. Reflecting at its core the unresolved boundaries between public and private in financial transactions, this controversy raises important issues of first impression: To what extent, for example, should lawyers be able to issue legal opinions that create negative externalities? Furthermore, what should differentiate the roles of lawyers and accountants in disclosing information to investors? Resolution of these issues not only helps to demystify the mystique, and untangle the morass, of legal-opinion giving but also affects the very viability of the securitization industry, which dominates American, and increasingly global, financing.

Suggested Citation

Schwarcz, Steven L., The Limits of Lawyering: Legal Opinions in Structured Finance (March 3, 2005). Available at SSRN: or

Steven L. Schwarcz (Contact Author)

Duke University School of Law ( email )

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