Compensation Matters: Incentives for Multitasking in a Law Firm

35 Pages Posted: 6 Sep 2013

See all articles by Ann P. Bartel

Ann P. Bartel

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Brianna Cardiff-Hicks

Stanford Graduate School of Business

Kathryn L. Shaw

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Date Written: September 2013

Abstract

Due to the limited availability of firm-level compensation data, there is little empirical evidence on the impact of compensation plans on personal productivity. We study an international law firm that moves from high-powered individual incentives towards incentives for "leadership" activities that contribute to the firm's long run profitability. The effect of this change on the task allocation of the firm's team leaders is large and robust; team leaders increase their non-billable hours and shift billable hours to team members. Although the motivation for the change in the compensation plan was the multitasking problem, this change also impacted the way tasks were allocated within each team, resulting in greater teamwork.

Suggested Citation

Bartel, Ann P. and Cardiff-Hicks, Brianna and Shaw, Kathryn L., Compensation Matters: Incentives for Multitasking in a Law Firm (September 2013). NBER Working Paper No. w19412. Available at SSRN: https://ssrn.com/abstract=2321503

Ann P. Bartel (Contact Author)

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Brianna Cardiff-Hicks

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Kathryn L. Shaw

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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