Lawyer Experience and IPO Pricing

Barondes, Royce de Rohan; Sanger, Gary C.

doi:10.2139/ssrn.227729

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Lawyer Experience and IPO Pricing

33 Pages Posted: 20 Jun 2000

See all articles by Royce de Rohan Barondes

Royce de Rohan Barondes

University of Missouri-Columbia School of Law

Gary C. Sanger

Louisiana State University, Baton Rouge - E.J. Ourso College of Business Administration

Date Written: May 4, 2000

Abstract

We examine the level of experience of law firms participating in IPOs and the impact of law firm experience on IPO pricing. We find a statistically significant, negative relationship between market share of the law firm representing the investment banks and IPO price. In general, the relationship between legal counsel to the issuer and IPO price is of the same sign but not statistically significant, at customary levels, in all model specifications. We also find regional variations; there is a statistically significant, negative relationship between price and the participation of New York City underwriters? lawyers. This evidence is consistent with more practiced legal counsel requiring more negative disclosure in prospectuses.

JEL Classification: G24, K22

Suggested Citation: Suggested Citation

Barondes, Royce de Rohan and Sanger, Gary C., Lawyer Experience and IPO Pricing (May 4, 2000). Available at SSRN: https://ssrn.com/abstract=227729 or http://dx.doi.org/10.2139/ssrn.227729