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Sometimes a little bit of economics goes a long way in aiding our understanding of perplexing practices and conventions within the legal profession. The study of third-party legal opinions is one such occasion. A third-party legal opinion is simply a legal opinion provided for the benefit of some third party who is not the client of the lawyers who write the opinion. Of course, there is no legal requirement that third-party legal opinions be issued to support particular transactions. The market for such opinions exists because the issuance of such an opinion makes the transaction worth more to the third party, and therefore to the client, and hence there are gains from trade (because the deal is worth more) from organizing a transaction such that the client's counter-party receives a third-party legal opinion.
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