Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Tuesday, January 26, 2010

The (Early) Triumph of Law and Entrepreneurship

Posted by D. Daniel Sokol

Because there is some overlap between entrepreneurship and antitrust, I include a cross post that I wrote for the Faculty Lounge.

How do you know that a field has "made it" in the legal academy?  The answer is when a school creates an LLM program in the area.  Luckily, this past week the Wall Street Journal Law Blog reported that not one but two schools are in the process of starting up Law and Entrepreneurship LLM programs - Duke and Colorado.

This semester in my own Law and Entrepreneurship class we just finished a unit on what is distinct about entrepreneurship as well as law and entrepreneurship.  I suspect that with the Kauffman Foundation providing the funding for cutting edge research in the area, within the next few years the field will look a bit more coherent to those outside of it.  

So, what is Law and Entrepreneurship? 

Generally speaking, “entrepreneurship” involves new products or services, new ways of organizing, or new geographic markets (collectively, “entrepreneurial opportunities”). A key feature of entrepreneurial opportunities is their novelty. Entrepreneurial opportunities may be novel in a strong sense, which typically implies a technological breakthrough, or they may be novel in a weak sense, such as opening a new restaurant in a vacant building. We define entrepreneurship as “engaging in a novel activity that carries substantial risk or uncertainty, in a sustained manner with the intent of creating an ongoing enterprise.” Operationally, this usually translates to “founding a new firm.” Understanding law is relevant to understanding entrepreneurship.

Focusing on “law” as it relates to entrepreneurship can mean various things, but the basic idea of “law and entrepreneurship” is to find either (1) a unique set of legal rules or legal practices in the entrepreneurial context, or (2) the unique expression or interaction of more generally applicable legal rules in the entrepreneurial context. “Legal rules” include constitutions, statutes, regulations, and common law doctrines. “Legal practices” include contracts or other forms of private ordering. Further, we include “legal bodies.” By “legal bodies” we mean the personnel, technologies, facilities, operational routines, etc. that implement legal rules and practices including the legal profession. For example, professions are organizers and rationalizers of the organizational environment. Legal bodies include the linkages to work on law firm management, legal ethics, and the nature of corporate legal work.




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