Making Partner

Frédéric Loss () and Antoine Renucci ()
Additional contact information
Antoine Renucci: CREG - Centre de recherche et d'études en gestion - UPPA - Université de Pau et des Pays de l'Adour

Post-Print from HAL

Abstract: Associates need reputation and financial resources to make partner at law firms, consultancies, and venture capital organizations. We provide a theory for how this prospect influences the business risk strategy they pursue and their execution effort. In our model, business risk affects how reputation evolves and the benchmark reputation for making partner through the impact of execution effort on the financial resources accumulated. We show that when business risk is observable, associates with good reputation take on high business risk, as opposed to low business risk, in order to protect their reputation. We also show that opening partner positions decreases the effort incentives of the associates with the best reputation. Finally, we conjecture that wage dispersion at the associate level should be higher when business risk is unobservable.

Keywords: Business risk; career concerns; partnerships; reputation risk (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Published in Scandinavian Journal of Economics, 2019, 122 (4), pp.1510-1534. ⟨10.1111/sjoe.12390⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02472982

DOI: 10.1111/sjoe.12390

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().