Abstract
Existing theories exploring how companies interact with the law stop short of unveiling whether and why companies can differentially pursue, interact with, and benefit from a particular legal environment. We theorize that companies can use social structures—shared educational and professional affiliations—between lawyers and judges to strategically pursue specific legal jurisdictions, influence judges’ discretion, and ultimately reap different legal outcomes from the same legal environment. Using data on such affiliations between lawyers and federal judges, we examine companies’ choice of U.S. federal district courts and their legal outcomes in patent infringement litigation from 1990 to 2013. Our results reveal that companies strategically pursue courts in which their lawyers have past educational or professional affiliations with the courts’ judges. If a desired judge is assigned to the case, a company leverages its lawyers’ social structures to tailor any legal communication to match that judge’s style. While such behavior results in a higher likelihood of winning a lawsuit, it also creates an inherent risk. In stacking their legal teams with lawyers who have connections to judges, companies often shortchange the human capital—lawyers’ skillsets—required to win a case, which adversely affects legal outcomes if the desired judge is not assigned to the case.
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