Growth Strategy in Corporate Law Firms: Internal Influences and Performance Outcomes

摘要: Autonomous professional organizations, in which professionals not only provide services but also manage the organization--set goals, coordinate activities, evaluate performance, and determine compensation (Scott, 1965)--have received little attention from organization theorists. This is unfortunate. Given their increasing number, size influence, service firms, such as law accounting consulting are an important organizational form that deserves study. Moreover, differences between organizations more widely studied types of (e.g., manufacturers) opportunities for testing extending generalizability extant research on processes. The present study firm growth strategy has two major objectives. first to analyze influence antecedent conditions, is, internal strengths weaknesses product/market expansion objectives, use versus external mechanisms. latter includes both lateral entry merger. second impact strategic choices profitability. Research mechanisms found distinct bodies research. Promotion have been by researchers investigating environmental influences intraorganizational interorganizational mobility (Wholey, 1984). Most studies treat one rather than comparing Pfeffer Cohen, 1984; Doeringer Piore, 1971). merger process primarily literature. Merger assumed be primary means diversification Porter, 1987) scant paid level reasons beside motive. focus effect meant diversification. Law firms (and other firms) better able commonly all three growth. Unlike service-provider readily separated (PSF). In a firm, attorney can open new practice area or branch office. Internal development (which, addition promotion associate attorneys partnership, into areas opening offices current partners) therefore viable mechanism implementing product market strategy. By same reasoning, occur entry, acquisition small number at partnership level. Conversely, merger, formation previous partnerships, necessarily used exclusively may enlarging existing practice. BACKGROUND AND HYPOTHESES Firm Conditions Traditionally, favored development. Thus, they included category considered labor markets (ILMs). recruit school graduates who enter associates progress through levels seniority until decision made, generally takes seven ten years. promotional structure creates need due leveraging skills senior with efforts junior members, billing out fees hours earn salary so partners share resulting profits. Leveraging pushes grow because once juniors become seniors, moving salaried profit-sharing positions, needed rewards top will shrink. …