Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
The authors examine how up-or-out rules operate as a screening device in the market for lawyers. Using data on large New York law firms, they show that firm growth is a slow and uncertain process because performance as an associate is not an especially informative signal about whether a lawyer will make a good partner and because the costs of mistaken promotion are relatively high. A newly hired associate is unlikely to be a suitable partner and the screening process is relatively imprecise. Firm growth therefore contributes between 5-7 percent of the present value of profits of a law firm. Copyright 1995 by University of Chicago Press.