Rat Race Redux: Adverse Selection in the Determination of Work Hours in Law Firms

Posted: 14 Dec 2013

See all articles by Renee M. Landers

Renee M. Landers

Suffolk University Law School

James B. Rebitzer

Boston University School of Management; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics; Bard College - The Levy Economics Institute

Lowell J. Taylor

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Date Written: June 1996

Abstract

This paper describes an organizational setting in which professional employees are required to work inefficiently long hours. The focus of our investigation is large law firms. The income sharing that characterizes legal partnerships creates incentives to promote associates who have a propensity to work very hard. Law firms use indicators of this propensity-especially an associate's record of billable hours-in promotion decisions. Reliance upon work hours as an indicator leads to a "rat-race" equilibrium in which associates work too many hours. We find evidence in support of this conclusion with data we collected from two large law firms.

JEL Classification: J16, J2, J44

Suggested Citation

Landers, Renee M. and Rebitzer, James B. and Taylor, Lowell J., Rat Race Redux: Adverse Selection in the Determination of Work Hours in Law Firms (June 1996). American Economic Review, Vol. 86, No. 3, 1996. Available at SSRN: https://ssrn.com/abstract=2366911

Renee M. Landers

Suffolk University Law School ( email )

120 Tremont Street
Boston, MA 02108-4977
United States

James B. Rebitzer (Contact Author)

Boston University School of Management ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States
617 353 4605 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Bard College - The Levy Economics Institute

Blithewood
Annandale-on-Hudson, NY 12504
United States

Lowell J. Taylor

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States
412-268-3278 (Phone)
412-268-7036 (Fax)

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