Further to Joan’s and Steve’s posts regarding the value that transactional lawyers can add to deals, Elisabeth de Fontenay at Duke has recently posted an article to SSRN, Law Firm Selection and the Value of Transactional Lawyering, which explores a new dimension along which lawyers can add value for clients: their unique, experience-based knowledge of deal terms.

de Fontenay’s argument is that for complex deals, it may not be readily apparent what the value or cost is for each term, and that lack of transparency impedes bargaining.  Experienced transactional lawyers have a unique knowledge base from which to draw upon, allowing parties to learn of new deal possibilities and value their alternatives.  de Fontenay points out, however, that this model is in tension with traditional notions of client confidentiality, because the lawyer’s value to the client is a function of the lawyer’s ability to pool knowledge drawn from other engagements.  The model also explains why elite law firms continue to be able to charge a premium for their services, and why they have combined into such large organizations: their size allows them to grow their knowledge base, and elite firms, by virtue of their experience, are able to perpetuate their informational advantages.