Determinants of Firm Internal Labor Markets in Large Law Firms

Douglas R. Wholey Professional labor markets, such as law, are often thought to be highly open occupational internal labor markets, in which promotion is rare and lateral entry is common. In the law firms analyzed in this study, however, promotion was much more common than lateral entry: three out of four partnership positions in law firms were staffed through promotion rather than lateral entry. Law firm growth, the number of major clients, and addition of major clients increased promotion, while promotions in prior periods decreased current promotion. Addition of major clients and promotions in prior periods led to lateral entry.