Date: April 12, 2013 Topic: The Shrinking ... - Georgetown Law

These data covered all the partner lawyers and manager lawyers at the firm who were
working in the largest of the firm’s departments, from the period 2005 to 2010. Our analysis
focuses on the connections between managers and partners, and the value being created by
managers. In the case firm, managers lead client projects, with the assistance of teams of junior
lawyers, while partners oversee client relationships but are not necessarily as directly involved in
the client projects on a daily basis. Our tie formation analysis focuses on managers as producers
of value, and manager (“M”) – partner (“P”) dyads as key relationships that can contribute
important knowledge to the value production process. Our interviews suggested that focusing at
the manager level would be valuable because managers are the essential decision makers
regarding the way knowledge will be applied to each client project. M-P dyad ties are important
for managers in terms of their learning and development, as well as for building support among
partners for their own eventual advancement (via partner vote) into the partnership. 2
We also collected and analyzed a large amount of qualitative data from the case firm.
Between 2005 and 2008, we tracked the use of KMS in practice by repeated interviews with
lawyers working on 12 different client projects. The projects were selected for tracking because
they were considered representative of the firm’s scope of services (including: preparing a due
diligence report for a company in the process of a takeover; helping a new shareholder to
restructure an acquired company; choosing the optimum fiscal location for an industrial group’s
new banking entity and set up its contractual structure; advising a company subject to a tax
inspection in connection with litigation, etc.). In total, 16 partners, 10 managers, and 6 junior
associates were interviewed who were working on these client project teams. Interviews lasted
from thirty minutes to four hours, with an average of about an hour and a half and were recorded
(one person refused to be taped and two persons made corrections to the transcription of their
interview).
In addition to the project tracking interviews, key archival materials were obtained from
the case firm, including internal documentation of the design, development and roll-out of the
system. One of the authors also attended five two-hour departmental meetings held in different
lines of business from 2005 to 2008.
Dependent variables
New tie formation. Our first dependent variable, new tie formation, is based on the
observation of new workplace ties between managers and partners. To construct this variable, we
defined a new tie if an M starts billing a P’s clients at least 50 hours in a given year, and there
has not been any client billing based connection between that M and P during the prior 3 years.
The 50 hour threshold was used by the firm to define a formal supervisory relationship between
managers and partners. This approach is similar to that used by Briscoe and Tsai (2011). For
each MP dyad year, we then coded the new tie formation dependent variable 1 if a new tie was
formed in that year; otherwise the variable was coded 0.
Value creation. Our second dependent variable, value creation, is based on revenue
generation through billable hours. Specifically, we used the total billable hours of each
individual M as the dependent variable for models predicting value creation, while controlling
for last year’s billable hours by that same M.
2 Note that our data do not permit us to observe M-M or P-P ties directly, since our relationship data come from lists
of formal supervisory relationships that show which M’s have worked for each P’s clients in a given year.
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