The effectiveness of inheritance vs. Rainmaking strategies in building books of business for female and minority partners

This chapter is an adaptation of “Which Path to Power? Workplace Networks and the Relative Effectiveness of Inheritance vs. Rainmaking Strategies for Professional Partners,” Journal of Professions & Organization, 1(1) March 2014. Partners in large law firms enjoy very high incomes, and these incomes have risen substantially over the last two decades (Kaplan 2008, 2009). Yet economic stratification has also been increasing in the professions at all levels (Leicht and Fennell 2001; Mouw and Kalleberg 2010) such that the highest earning law firm partners out-earn the average lawyer more and more each year (Garicano and Hubbard 2009; Heinz et al. 2005). Within this context of rising inequality, a historical pattern of lower earnings for women and minorities appears to be persisting (Baker 2002; Kay and Gorman 2008). Since the economic rewards in law firms overwhelmingly accrue to those lawyers that become partners (Gilson and Mnookin 1985; Malos and Campion 1995), much research on demographic inequality among lawyers has focused on the careers of associates and whether they achieve the milestone of making partner - “the brass ring” of a legal career (Galanter and Palay 1991; Groysberg et al. 1999; Greenwood et al. 2005). That research indeed shows that women and minorities do not appear to be making partner at the same rate as white men, despite decades of increasing representation in the graduating classes of law schools and the entering cohorts of law firm associates (Hagan and Kay 1995; Holder 2001; Heinz et al. 2005; Kay and Gorman 2008; Rhode 2011; Wilkins 1999; Wilkins and Gulati 1996). But what happens after making partner? Given that lawyers typically make partner around age 35, much of their careers are still ahead of them. While there is some research on partners who move from one partnership firm to another (Rider 2012; Sherer and Lee 2002), there is little research about the careers and outcomes of partners within a given firm, which accounts for the vast majority of all partners’ careers. The conventional or stylized model of the law firm partnership is that it is a group of peers, a “company of equals” (Nelson 1988). This view is perhaps reinforced by the distinctive practices that are often attributed to professional partnerships - such as lack of formal positional hierarchy or management roles that rotate among partners (Greenwood, Hinings, and Brown 1990; Malhotra, Morris, and Hinings 2006).