Tuesday, October 20, 2009

Hadfield: The Role of International Law Firms and Multijural Human Capital in the Harmonization of Legal Regimes

Gillian Hadfield (Univ. of Southern California - Law and Economics) has posted The Role of International Law Firms and Multijural Human Capital in the Harmonization of Legal Regimes (in Multijuralism: Manifestations, Causes and Consequences, forthcoming). Here's the abstract:
Multijuralism is a fundamental attribute of the globalizing world, not merely as a result of the public creation of multijural states or trading zones, but also as a result of privately generated multi-jurisdictional transactions and relationships. Both public and private rule-making are important to the development of law in multijural settings. As important, however, is the dynamic development of rules through the process of interpretation and adjudication. Indeed, harmonization of law through the adoption of literally similar legal rules or contract provisions may have little impact on the harmonization of the ultimate legal treatment of particular conduct if legal rules are interpreted and adjudicated differently in different legal regimes. Courts need access to grounded problem-specific knowledge in order for harmonization to be effective across multiple jurisdictions. The principal source of this judicial legal human capital (Hadfield 2006) is the legal human capital generated by lawyers for clients and shared with courts in the process of dispute resolution. Consequently the global markets in which lawyers' investments in multijural legal human capital take place are important not merely for how well they serve the interests of particular clients but, more fundamentally, for how well they work to generate the legal human capital that ultimately feeds into the quality of the harmonization work of courts. These global legal markets, however, are characterized by both market failure and monopoly restrictions. Market failures arise because of the difficulties that attend the production and distribution of information, difficulties that in other settings are mitigated through the use of intellectual property protection, public subsidy and so on. Law firms are an important organizational form for overcoming legal human capital market failures. In the multijural setting, however, extensive jurisdiction-specific monopolies over the provision of legal services inhibit the development of truly multi-jurisdictional law firms. Reducing the barriers to multi-jurisdictional legal practice is an important policy step in the direction of promoting the harmonization of law in a multijural world.