This article addresses the question of how economic actors (re)shape their organizational and institutional contexts as their activities internationalize. By focusing on law firms, we choose a professional activity that has been regarded as highly determined by the national distinctiveness of professional and legal systems and would lead us to expect strong institutional legacies on firm dynamics. The comparative study of the growth and internationalization of corporate law firms in the UK and Germany presented in this article, however, refutes this view. The results reveal that in both settings 'institutional pockets' of corporate lawyers existed whose entrepreneurial orientations and international reach were much stronger than among other subgroups of the profession. From the 1970s onwards, these lawyers and law firms engaged in redefining their organizational and institutional contexts with the aim of positioning themselves in ways that would allow them to seize upon the emerging international markets for legal services. They did so in different ways and at different times in each country. We conclude that internationalization of UK and German law firms bears traces of institutional legacies as well as signs of pathmodification, and that international markets for legal services may be more differentiated and less dominated by Anglo-Saxon law firms and conceptions of law than has been so far recognized.

Studies on societal path dependencies tend to focus on mechanisms that anchor and stabilize national trajectories while paying less attention to transnational interactions and multilevel governance. This paper explores processes of path transformation in societies that are presumed to have the characteristics of open systems. Two pairs of case studies are presented and compared. The first illustrates institutional change through collision, when a national path meets with another. The second describes the emergence of transnational institutional paths and the impact of that process on national institutions and their (potential) transformation. The results indicate that path transformation often stems from a gradual succession and combination of incremental steps and junctures -change is gradual but consequential. They also point to increasing co-evolutionary interaction between national path transformation and transnational path creation. This implies a need for analytical tools that are adapted to the analysis of multi-level, nested processes of institutionalization and de-institutionalization. The paper suggests that the concept of path generation allows for a better specification of the conditions for change in existing societal paths and for the emergence of new paths in the case of open systems than the concept of path dependency.Path dependency is a frequently used concept in the social sciences. In the general sense (soft version), it refers to the idea that events occurring at an earlier point in time will affect events occurring at a later point in time. In a stronger sense, path dependency characterizes historical sequences in which contingent events set institutional patterns with deterministic

Abstract. In institutional theory, it is a challenge to explain how rulesetting occurs in transnational contexts

The increasing relevance of transnational governance for the regulation of crossborder economic relations in many public policy fields has given rise to debates about its legitimacy. This paper provides an introduction to normative and empirical approaches and suggests to bridge between them by exploring normative perspectives through the views and strategies of actors practically involved in transnational governance. Based on a synthesis of contributions from different fields of transnational governance, it is suggested that a perceived lack of fit between the regulators' legitimacy claims and the addressees' expectations, if expressed as protest and criticism by the latter, can lead transnational governance institutions to adjust to demands for more inclusiveness, expertise and procedural fairness. However, the rising level of expertise required from participants, stakeholders and publics to meet normative criteria for greater participation and procedural fairness creates new and yet unresolved problems.

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