"WHAT DO BUSINESS LAWYERS really do? Embarrassingly enough, at a time when lawyers are criticized with increasing frequency as nonproductive actors in the economy, there seems to be no coherent answer ...” This very current sounding comment was in fact written 33 years ago by Ronald Gilson in an article of The Yale Law Journal entitled “Value Creation by Business Lawyers.” This does not bode well: how will we determine what business lawyers are going to do in the future, if their role has been misunderstood and under-appreciated for quite some time?
Since 1984, Gilson’s article has been widely called “seminal” and frequently rebutted. But his coining of the term “transaction cost engineers” to describe business lawyers is at least a solid start to future-gazing: “I suggest that the tie between legal skills and transaction value is the business lawyer’s ability to create a transactional structure which reduces transaction costs and therefore results in more accurate asset pricing.”
Looking into the future, will traditional business lawyers be relied upon to create that transactional structure; especially when legal functions will be serviced by various providers, including so-called disruptors? It would seem that business lawyers of the future, be they in-house or external, in law or multidisciplinary firms, stand a better fate if they keep their eye on transactions as a whole.
Since 1984, Gilson’s article has been widely called “seminal” and frequently rebutted. But his coining of the term “transaction cost engineers” to describe business lawyers is at least a solid start to future-gazing: “I suggest that the tie between legal skills and transaction value is the business lawyer’s ability to create a transactional structure which reduces transaction costs and therefore results in more accurate asset pricing.”
Looking into the future, will traditional business lawyers be relied upon to create that transactional structure; especially when legal functions will be serviced by various providers, including so-called disruptors? It would seem that business lawyers of the future, be they in-house or external, in law or multidisciplinary firms, stand a better fate if they keep their eye on transactions as a whole.
