Close
Updated:

Lawyers can create (or destroy) huge value for their company

Do lawyers make a difference? Do they bring value? Yes, and here is an anecdote from MIT Sloan Mgt. Rev., Vol. 48, Summer 2007 at 63, that highlights the point.

“In the spring of 2006, Boston Scientific Corp., a medical device manufacturer, acquired its rival Guidant Corp, outbidding Johnson & Johnson in the process. Earlier, in order to gain rapid antitrust approval, Boston Scientific and J&J had both signed deals with pharmaceutical giant Abbott Laboratories in anticipation of the Guidant acquisition. J&J was first to strike a conditional licensing deal with Abbott, but the agreement failed to include a non-compete clause so Abbott was then able to help Boston Scientific — which it happily did. After Boston Scientific outbid J&J, it sold Guidant’s lucrative stent business to Abbott to alleviate regulators’ monopoly concerns. Thus, by exploiting a weakness in a complex legal agreement, Abbott was able to claim the best part of Guidant’s business in return for its assistance of Boston Scientific.”

Whether the lawyer was an employee or retained, some lawyer failed to bind Abbott and thereby hugely disadvantaged J&J. Whichever lawyer spotted the loophole created a business-creating opportunity for Boston Scientific.