Corporate illegality increases law department workload and a methodology to add some reality to that statement

An article in the Acad. Mgt. J., Vol. 53 (2010) at 701-722, analyzes why corporate prominence may lead to a higher incidence of corporate illegality. The authors studied 194 S&P 500 manufacturing firms between 1990 and 1999. They searched databases for references to what they defined as corporate illegality and reviewed the Corporate Crime Reporter for the period. Of the 469 incidents they located for the group – an average of about 47 per year, therefore approximately one out of four companies per year had an incident – they consisted of 162 environmental violations, 96 fraud-related, 124 false claims, and 87 anti-competitive. The article only studied those four kinds of violations.

Perhaps that pace of corporate wrongdoing by manufacturing companies applies more broadly than just to members of the S&P 500. Those categories of criminal activity, maybe with less emphasis on environmental transgressions, could be extended to other industries. In short, this research suggests a data point and even a way to quantify some portion of legal department work – alleged criminal violations and the associated governmental investigations.

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