Specialization, Firms and Markets: The Division of Labour between and within Law Firms
58 Pages Posted: 31 Jan 2003
Date Written: January 2003
Abstract
What is the role of firms and markets in mediating the division of labour? This Paper uses confidential microdata from the Census of Services to examine law firms' boundaries. We first examine how the specialization of lawyers and firms increases as lawyers' returns to specialization increase. In fields where lawyers increasingly specialize with market size, the relationship between the share of lawyers who work in a field-specialized firm and market size indicates whether firms or markets more efficiently mediate relationships between lawyers in this and other fields. We then examine which pairs of specialists tend to work in the same versus different firms; this provides evidence on the scope of firms that are not field-specialized. We find that whether firms or markets mediate the division of labour varies across fields in a way that corresponds to differences in the value of cross-field referrals, consistent with Garicano and Santos' (2001) proposition that firms facilitate specialization by mediating exchanges of economic opportunities more efficiently than markets.
Keywords: Industry structure, theory of the firm, specialization, law firms, legal services, economics or organization
JEL Classification: D20, L10, L20, L80
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Contractibility and Asset Ownership: On-Board Computers and Governance in U.S. Trucking
By George P. Baker and Thomas N. Hubbard
-
Contractibility and Asset Ownership: On-Board Computers and Governance in U.S. Trucking
By George P. Baker and Thomas N. Hubbard
-
Make vs. Buy in Trucking: Asset Ownership, Job Design, and Information
By George P. Baker and Thomas N. Hubbard
-
Make Versus Buy in Trucking: Asset Ownership, Job Design and Information
By George P. Baker and Thomas N. Hubbard
-
How Wide is the Scope of Hold-Up-Based Theories? Contractual Form and Market Thickness in Trucking
-
Information, Decisions, and Productivity: On-Board Computers and Capacity Utilization in Trucking
-
Information, Decisions, and Productivity: On-Board Computers and Capacity Utilization in Trucking
-
Non-Contractible Investments and Vertical Integration in the Mexican Footwear Industry