THE PERSONNEL-ECONOMIC GEOGRAPHY OF US LAW FIRMS AND LAW SCHOOLS

by Paul Oyer and Scott Schaefer

June 2009

ABSTRACT

We study the firm/worker matching process by analyzing how graduates of law schools group into law firms. We measure the degree to which lawyers from certain schools concentrate within firms and then analyze how this agglomeration can be explained by \textquotedblleft natural advantage\textquotedblright\ factors such as geographic proximity and productive spillovers across graduates of a given school. We document substantial variation in hiring strategies, with some firms hiring from a broad set of law schools, others hiring from schools in a narrow geographic area, and still others hiring narrowly from only the very top law schools. We show that large law firms tend to be concentrated with regard to the law schools they hire from and that individual offices within these firms are substantially more concentrated. Around one-third of observed office-level concentration can be explained by simple measures of office-school geographic proximity and firm-school reputation matches. We also find a strong relation between partner concentration (at the office level) and associate concentration even controlling for firm, school, and firm/school match characteristics, suggesting that hiring networks and same-school lawyer spillovers are important in this labor market.

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