Re: Lawyers

[andie nachgeborenen <andie_nachgeborenen@xxxxxxxxx>]

I should preface this by saying that I do not think
that David's and my profession is parasitical,a nd
that we do "add value." But Coase does not identify
the reason why. Information gathering is costly, but
lawyers as such gather information only about certain
sorts of costs, namely legal ones. We do not gather
information about what is being produced, what is
demanded at what prices, etc. Rather, if we are
litigators, we either tell people what they can do
without getting into varying degrees of legal trouble,
or if they do (or are accused of doing these things),
try to recover the costs for our clients or prevent
others from imposing those costs on our clients. The
latteris mainly what I do. David tries to recover as
much as possible for his clients from those who have
gone into bankruptcy, aor tries to help his bankrupt
clients get back on their feet again. I mainly

If we are transactional lawyers, we try to draft
agreements and instruments that will keep our clients
out of court. So reduction of transaction costs is
only a partial description of what we do, and the
kinds of transaction costs involved are rather
specific.


--- "David S. Shemano" <dshemano@xxxxxxxxxxx> wrote:
> One more thought on the value of lawyers.  The
> following is from the Reason magazine interview of
> Coase:
>
>
> Reason: People are very excited that transactions
> are taking place much more efficiently than ever
> before through new electronic means and better
> communication systems. Are you excited about these
> trends?
>
> Coase: Yes, because I don't understand them. People
> talk about increases in improvements in technology,
> but just as important are improvements in the way in
> which people make contracts and deals. If you can
> lower the costs there, you can have more
> specialization and greater production. So that's
> what I'm interested in now. By improving the way the
> market works, you can produce immense benefits, not
> because it invents new technologies, but because it
> enables new technologies to be used. Without the
> ability to make efficient contracts, you can't use
> these new means. And a lot of effort is going, at
> the moment, into devising new ways of handling the
> problems, mainly by the lawyers.
>
> Reason: Some people would say that it's just paper
> transactions, that all the efforts of the lawyers
> are a waste, a mess, a scourge on society. You have
> a slightly different view.
>
> Coase: Lawyers do a lot of harm, but they also do an
> immense amount of good. And the good is that they
> are expert negotiators, and they know what is
> necessary in the law to enable deals to be made.
> Their activities are designed, in fact, to lower
> transaction costs. Some of them, we know, raise
> transaction costs. But by and large, they are
> engaged in lowering transaction costs. People talk
> about the information age and how large numbers of
> people are engaged in information activities. Well,
> gathering information is one of the difficulties
> when you're in a market. What is being produced,
> what are the prices of what is being offered? You've
> got to learn all these things. You can learn them
> now a good deal more easily than you could have done
> before; you don't have to search. If you've ever
> tried to buy anything, you know how much time goes
> into finding out what's available and all the
> alternatives.
>
> David Shemano


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