External Agency Relationships and Agency Problems in Professional Service Firms: A Multilevel Study

57 Pages Posted: 22 Apr 2011

See all articles by Michel Lander

Michel Lander

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

J. van Oosterhout

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Pursey P.M.A.R. Heugens

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Date Written: April 19, 2011

Abstract

We employ survey and archival data on a sample of 2083 lawyers working for 203 Dutch law firms to test a multilevel theory of the specific corporate governance challenges facing professional service firms (PSFs). We conceptualize the external agency relations characterizing PSFs, and test how agency problems emerge in these relationships under the influence of PSF-specific practices and the risk propensities of individual professionals. Taking complaints filed against lawyers with the bar association as a measure for agency problems, we find that organizational practices like training and strategic planning and individual characteristics like job roles and experience influence their prevalence.

Keywords: profession, professional service firm, misconduct, fraud, agency theory, agency problem, multilevel, HLM, Poisson regression, Poisson model, law firm, lawyer

Suggested Citation

Lander, Michel and van Oosterhout, Hans and Heugens, Pursey P.M.A.R., External Agency Relationships and Agency Problems in Professional Service Firms: A Multilevel Study (April 19, 2011). Available at SSRN: https://ssrn.com/abstract=1814998 or http://dx.doi.org/10.2139/ssrn.1814998

Michel Lander

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands
+31 - 10 - 408 2365 (Phone)
+31 - 10 - 408 9012 (Fax)

Hans Van Oosterhout

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Pursey P.M.A.R. Heugens (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands
0031 10 408 2365 (Phone)
0031 10 408 9012 (Fax)

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