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Organizational Form As Status And Signal, Kimberly D. Krawiec
Organizational Form As Status And Signal, Kimberly D. Krawiec
Faculty Scholarship
In this Article, the author analyzes the reactions of 147 New York City law firms to the 1994 enactment of the New York Limited Liability Partnership statute, which provided New York law firm partners with the first convenient mechanism to limit their personal liability for partnership debts. Using both quantitative and qualitative evidence, she evaluates whether the behavior of New York law firms supports the signaling theory of organizational form - that is, the theory that firms use the partnership form to signal to the marketplace that they provide high quality legal services, due to either superior monitoring or to …
The Economics Of Limited Liability: An Empirical Study Of New York Law Firms, Kimberly D. Krawiec, Scott Baker
The Economics Of Limited Liability: An Empirical Study Of New York Law Firms, Kimberly D. Krawiec, Scott Baker
Faculty Scholarship
Since the rapid rise in organizational forms for business associations, academics and practitioners have sought to explain the choice of form rationale. Each form contains its own set of default rules that inevitably get factored into this decision, including the extent to which each individual firm owner will be held personally liable for the collective debts and obligations of the firm. The significance of the differences in these default rules continues to be debated. Many commentators have advanced theories, most notably those based on unlimited liability, profit-sharing, and illiquidity, asserting that the partnership form provides efficiency benefits that outweigh any …