Farrell's Law is a principle in the field of economics that suggests the efficiency of a firm or organization decreases as its size increases. This phenomenon occurs because larger organizations often face challenges such as bureaucratic inefficiencies, communication breakdowns, and slower decision-making processes. As a result, the benefits of scale can be outweighed by these drawbacks. The law is named after James Farrell, who observed these trends in various industries. It highlights the importance of maintaining a balance between growth and operational efficiency, encouraging businesses to consider the potential downsides of expansion.