Price, Path & Pride: Third-Party Closing Opinion Practice among U.S. Lawyers (A Preliminary Investigation)

Abstract

This Article provides a qualitative empirical analysis of third-party closingopinion practice. This practice has recently generated some controversybecause, among other reasons, many of the transactions at issue in Enron were supported by closing opinions. Interviews with lawyers around the nation suggest that the traditional academic view of opinion practice - that it promotes economic efficiency - is helpful but incomplete. Many features ofclosing opinion practice persist despite perceived inefficiencies. Moreover, non-market actors, such as the bar associations - not private innovation - appear to be the chief engines of improvement. Based on these interviews, the Article offers some initial thoughts as to why the practice exists and what functions it may perform.