This article provides an overview of federal litigation involving the largest 2,000 U. S. corporations over the period 1971–91. Reporting from a unique data set of the authors' construction, it finds that althugh the aggregate volume of business litigation grew during the 1970s and early 1980s, it has actually been declining in recent years in all major categories of cases; business-related litigation is heavily concentrated, with an extremely limited number of business “mega-litigants” accounting for most of the activity; this concentration is particularly evident in tort, with the result that the tort trend line outside the concentration is actually flat or declining; a good deal of the growth in litigation outside the tort area can be attributed to business itself; and big business wins overwhelmingly, as plaintiff and defendant, in cases that involve it. The general applicability of these findings is limited by the data's restriction to federal court litigation and the structure of the Integrated Federal Court Data Base from which the authors' data set was constructed. This granted, the report is by far the most comprehensive treatment of U. S. big business litigation to date, and its findings are strikingly at odds with the premises of much current policy discussion.

A replication of Macaulay's 1963 study of Wisconsin manufacturers shows that manufacturers are using a new type of contract to govern changed transactions and to establish new form of industrial organization. This article seeks to specify these changes and to demonstrate their theoretical significance by constructing an empirically and theoretically informed analytical framework. This framework establishes relations of meaning between discrete contracts, job shop production, and classical contract law; between openterm contracts, mass production, and neoclassical contract law; and between long-term agreements, flexible production, and a “shadow” relational contract law. It demonstrates that long-term agreements constitute a new device for governing exchange, that they are part of a broader change from mass production to flexible production, and that their distinctive features are not recognized by neoclassical contract law.

Business litigation is a relatively neglected area of corporate governance, particularly given its enormous rise in the United States over the past generation. As a preliminary effort to engage this issue, we examine dispute avoidance and resolution in the automotive sector since the early 1970s-focusing on relationships between auto manufacturers and their suppliers and dealers. We generally presume intercorporate litigation to be a “last resort” in business practice, chosen only on the breakdown of less costly means of dispute avoidance or resolution; we take such breakdown typically to be caused by shifts in the terms of competition among firms (e. g., increased competition, instability, uncertainty); and we expect that, over time, the costs of litigation will motivate efforts to construct new structures of nonlitigious dispute resolution. In the case of the U. S. auto industry, we find disruptive shifts in the terms of competition and increased recourse to litigation. Throughout, however, this litigation effect is mitigated by the dominance of major manufacturers over their suppliers and dealers. Over time, it is further dampened by industry development of mechanisms for arbitration or other nonlitigious dispute resolution.

This article draws on interview data from California's Silicon Valley to explore the role of local business attorneys in shaping the market for high-technology start-up financing. Far from exerting a disruptive or disputatious influence on business relations, Silicon Valley lawyers actively facilitate the functioning of the region's venture capital sector. In particular, attorneys intervene in the start-up process to absorb, suppress, and avert crucial uncertainties that might otherwise elevate transaction costs, imperil economic activity, and foster interorganizational discord. Local law firms moderate the hazards of new-company financing in at least three distinct ways: (1) by directly absorbing economic uncertainties in individual transactions; (2) by constructing, preserving, and reproducing normative and cognitive understandings within the community as a whole; and (3) by incorporating these local practices into the external legal regime.