We first examine what types of firms hire former SEC lawyers. Among other determinants, we find that older and larger firms, those with a history of litigation, and those that do not use highly-ranked audit firms, are more likely to hire former SEC lawyers over other lawyers. This suggests that financial and repetitional concerns, and the risk of litigation and misstated financials, may contribute to the decision to hire a former SEC lawyer. In order to mitigate selection bias, in our analyses we propensity-match conversations involving former SEC lawyers against those involving other lawyers along lawyer and law firm characteristics, the issues raised in the initial comment letter, and firm characteristics.
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