Organizations of Professionals: Governance Structures in Large Law Firms

Abstract

Despite the growing number of studies of professionals in organizations, surprisingly little attention has been given to the way in which professions shape organizations. This research addresses this issue by examining the determinants of formal structures in large law firms for decision making in two areas: compensation and promotion. We argue that the structures for compensation decisions are strongly influenced by contemporary business strategies adopted by law firms, as indicated by a number of organizational characteristics. Because promotion decisions are closely tied to the institution of professional authority, however, structures for these decisions are largely unaffected by such strategies. The implications of this study for a number of lines of organizational research are suggested.