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Lawyers, like all specialists, are hired for their unique knowledge and contacts. In economic terms, this can be viewed as “brand capital”, i..e., not all brands have the same market power. One of the factors involved in hiring the lawyers is that the attorneys are involved in repeated games against each other. Large classes of attorney behavior can only be understood by viewing the relationships between the attorneys. Often, sanctions for previous conduct which one side regarded as unreasonable will occur in a different case.
Part of the package which the attorney brings to the client is the attorney’s reputation for fair or foul dealing, his knowledge of the other attorneys in the case, and any feuds or friendships with opposing attorneys. Various forms of cooperative behavior and professional courtesy can be viewed as a desire not to squander brand capital with the judge or the other attorneys.
The relations between the various bankruptcy lawyers serve several purposes. For one thing, it allows them to make tentative judgments about the quality of the information which is being brought to the negotiation sessions. Some attorneys have a reputation such that, if they say the money is there at a specific point in time, you may be sure the money is there. Other attorneys almost deliberately will not ask their clients certain questions so that they can reply without being constrained by the truth. Trust in the integrity of the opponent and the reliability of information from the opponent will speed up the decision-making process.
MacDonald, MacDonald & McLeod, “Chapter 11 As a Dynamic Evolutionary Learning Process In a Market With Fuzzy Values,” 1993-1994 Norton Survey of Bankruptcy Law, Page 67-68.