A Tale of Two Professions: The Impact of SOX and the Global Economic Crisis on Public Accounting and Law Firms’ Performance
研究了2002年萨班斯-奥克斯利法案和2008年全球经济危机如何影响公共会计和律师事务所的收入模式，发现会计行业因服务需求刚性而受危机冲击较小，而律所则因需求下降而收入减少。
We examine the impact of the Sarbanes–Oxley Act of 2002 (SOX) and the global economic crisis of 2008 on revenue generation patterns of public accounting and law firms. Using a sample of firm-year observations from both industries, we show that since the enactment of SOX, public accounting firms have significantly increased leveraging of partner time and decreased charge-out rates to boost their revenue per partner. While law firms also exhibit an increase in revenue per partner in the post-SOX era, their increase is rooted in higher average charge-out rates and lower leveraging. During the crisis, the public accounting industry was insulated by the relatively inelastic nature of its services. By contrast, law firms suffered a decline in demand for their services, which reduced their revenue generation by reducing their charge-out rates. We also consider cross-sectional variations within each industry and find significant differences across firms in the impact of SOX and the economic crisis. Notably, large firms in both industries were more significantly impacted by SOX and the Big 4 accounting firms were adversely impacted during the crisis. Our study sheds light on the revenue generation and human resource consequences of two significant macroeconomic events for two professional service industries that serve as watchdogs in our capital markets.