Let’s look
at something that most of us would agree is true: People and firms that have
collaborated in the past will treat each other better in the future. This
behavior is widely accepted to be true in business, and plenty of research
evidence backs it up. It is part of what we call network theory, where one of
the central ideas is that past collaboration or contact between two people
creates a tie between them that facilitates future collaborations.
Like all
things we believe to be true, we think about this one only when we see that
it’s not. A recent article in Administrative Science Quarterly by Jose Uribe, Maxim Sytch, and Yong H. Kim looks at collaborations among lawyers. In most
collaborations, people or firms work together for their own benefit. Lawyers
also seek to benefit themselves, of course, but they do so by acting as
representatives for others. In this paper the lawyers represent firms involved
in disputes over intellectual property, which can be a very important and
potentially valuable form of legal action.
A past
collaboration means that the lawyers have been on the same side in an earlier
lawsuit, usually representing different firms that have the same goal. This
study considers what these lawyers do when they later represent firms on
opposite sides of a lawsuit. One might think that lawyers who have collaborated
in the past will treat each other better and come to a better solution in a
shorter time. This is possible, but if the firms they now represent are strong
rivals, the opposite happens: The lawyers are more aggressive if they have
collaborated in the past. That means longer time to settle the case and fewer
cases settled out of court.
Does this make
sense? It does not if we assume that the firms observe and care about only the
final outcome of the case. This article shows that having more-aggressive
lawyers on each side typically leads to worse outcomes for both sides, such as
dings to their stock prices. But it turns out that firms also look at their
lawyers’ history with the other side’s counsel and care about the process, not
just the outcome, and that is where things go wrong. Lawyers who have collaborated
with opposing counsel in the past know they need to prove their loyalty to their
current client, and the easiest way to do so is to be aggressive – the firm is
watching the process and will see this as a sign of loyalty.
The results
of this research do not mean that what we know about collaborations is wrong –
only that it is incomplete. A history of collaborating would likely make most
lawyers want to collaborate, but they are trapped by the need to prove loyalty
to clients that are strong rivals. There is no way out of this trap, which also
hurts the client, but they can make it less serious by agreeing to act
collaboratively on smaller procedural steps that simplify the case for the
judge and lawyers but are not inspected closely by the client. And indeed, some
lawyers did exactly that, presumably because they still wanted some level of
collaboration and also knew that this would be better for the client.
So we still
know that past collaborations make people want to treat each other better, but
the role of representing someone else can reverse that. To represent someone
you need them to trust you, and if that takes some aggression against a past
collaborator you will consider doing that. At least if you are a lawyer.
Uribe, J., Sytch, M., & Kim, Y. H. 2019. When Friends Become Foes: Collaboration as a Catalyst for Conflict. Administrative Science Quarterly, forthcoming.
