Firm/Employee Matching: An Industry Study of American Lawyers

Firm/Employee Matching: An Industry Study of American Lawyers

By Paul Oyer, Scott Schaefer
October 2012Working Paper No. 3043

We study the sources of match-specific value at large American law

firms by analyzing how graduates of law schools group into law

firms. We measure the degree to which lawyers from certain schools

concentrate within firms and then analyze how this agglomeration can

be explained by “natural advantage” factors (such as geographic

proximity) and by productive spillovers across graduates of a given

school. We show that large law firms tend to be concentrated with

regard to the law schools they hire from and that individual offices

within these firms are substantially more concentrated. The degree of

concentration is highly variable, as there is substantial variation in

firms’ hiring strategies. There are two main drivers of variation in

law school concentration within law offices. First, geography drives a

large amount of concentration, as most firms hire largely from local

schools. Second, we show that school-based networks (and possibly

productive spillovers) are important because partners’ law schools

drive associates’ law school composition even controlling for firm,

school, and firm/school match characteristics and when we instrument

for partners’ law schools.