Academics from the Universities of Arizona and Melbourne have examined the contribution of US lawyers to mergers and acquisitions taking place between 1990 and 2010, and have found that they can play a significant role if they have expertise in corporate law, the acquirer's industry, the rights of employees regarding their pensions as well as high overall expertise. The four academics conclude that the presence of such lawyers is 'associated with lower acquisition premia, lower completion rates, higher acquirer announcement returns, and higher post-acquisition accounting performance'.
Associate Professor Sandy Klasa of the University of Arizona and his colleagues also state: 'These effects appear to increase over time as deals become more complex and to be stronger for targets with greater earnings management, lower analyst coverage, higher idiosyncratic volatility, or greater indebtedness.' The results are presented in the paper 'Does Legal Counsel Expertise Add Value? Evidence from Mergers and Acquisitions'.
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