Getting rid of a heavy shield: downsizing the in-house legal department?

IF 16.4 1区化学 Q1 CHEMISTRY, MULTIDISCIPLINARY

Accounts of Chemical Research Pub Date : 2018-05-23 DOI:10.1108/AJB-08-2017-0022

Marcelo J. Alvarado-Vargas, Qi Zou

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引用次数: 0

Abstract

Purpose The purpose of this paper is to examine the effects of the number of lawsuits on firm performance and in-house legal department size. More importantly, this paper also aims to explore the interaction effect of in-house legal department size on the aforementioned lawsuit-performance relationship. Design/methodology/approach The empirical analyses are performed by using secondary data. Structural equation modeling is employed in order to examine multiple structural relationships between the number of lawsuits, size of in-house legal department, and firm performance. Findings Three key findings were generated: number of lawsuits has a significant detrimental effect on firm performance; number of lawsuits is positively associated with size of in-house legal departments; and size of in-house legal departments negatively moderates the relationship between number of lawsuits and firm performance. Practical implications The results corroborate the harmfulness of lawsuits. On the one hand, a large number of lawsuits damage the firm’s financial performance directly; on the other hand, more lawsuits lead to enlarged in-house legal departments which further aggravate the negative effects of lawsuits on firm performance. These results suggest that firms should spend more effort in properly managing legal departments. Originality/value This paper contributes to the literature by empirically examining the economic impacts of lawsuits on firm performance. Moreover, it also explored the notion that having a large size of in-house legal department does not mitigate, but aggravates the harmfulness of lawsuits on firm performance.

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摆脱沉重的盾牌:缩减内部法律部门?

本文的目的是检验诉讼数量对公司绩效和内部法律部门规模的影响。更重要的是，本文还旨在探讨内部法律部门规模对上述诉讼-绩效关系的互动效应。设计/方法/方法使用二手数据进行实证分析。为了检验诉讼数量、内部法律部门规模和公司绩效之间的多重结构关系，采用了结构方程模型。得出了三个主要结论:诉讼数量对公司绩效有显著的不利影响;诉讼数量与内部法律部门的规模呈正相关;内部法律部门的规模负向调节诉讼数量与公司绩效之间的关系。研究结果证实了诉讼的危害性。一方面，大量的诉讼直接损害了公司的财务绩效;另一方面，诉讼增多导致企业内部法务部门扩大，进一步加剧了诉讼对企业绩效的负面影响。这些结果表明，企业应该花更多的精力来管理好法律部门。本文通过实证研究诉讼对公司绩效的经济影响，为文献做出了贡献。此外，它还探讨了一个概念，即拥有庞大的内部法律部门并没有减轻，而是加剧了诉讼对公司绩效的危害。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Accounts of Chemical Research 化学-化学综合

CiteScore

31.40

自引率

1.10%

发文量

312

审稿时长

2 months

期刊介绍： Accounts of Chemical Research presents short, concise and critical articles offering easy-to-read overviews of basic research and applications in all areas of chemistry and biochemistry. These short reviews focus on research from the author’s own laboratory and are designed to teach the reader about a research project. In addition, Accounts of Chemical Research publishes commentaries that give an informed opinion on a current research problem. Special Issues online are devoted to a single topic of unusual activity and significance. Accounts of Chemical Research replaces the traditional article abstract with an article "Conspectus." These entries synopsize the research affording the reader a closer look at the content and significance of an article. Through this provision of a more detailed description of the article contents, the Conspectus enhances the article's discoverability by search engines and the exposure for the research.