Are governance practices employed by professional service firms equally effective in preventing professional-client misconduct for professionals at different stages of their career? Drawing upon professional-agency theory and the literature documenting professional career patterns, we develop a multilevel theoretical model to answer this question. We test our model in the empirical context of the Dutch legal profession, using firm-level survey data on 142 law firms and individual-level archival data from the 2994 lawyers working for these firms to explain 97 formally adjudicated complaints of professional-client misconduct committed by individual lawyers registered with the Amsterdam Bar Association. We find that the ‘orthodox’ distinction between informal behavioral and formal outcome-based governance practices is too course-grained to receive empirical support, and that firm-level governance practices only reduce professional-client misconduct when they are specifically targeted at the career stage of the lawyers employed. Our findings not only allow us to develop a finer-grained version of Sharma’s professional-agency model, but may also be practically useful in developing firm-level governance practices targeted at different strata of professionals.
AbbottA (1988) The System of Professions: An Essay on the Division of Expert Labor. Chicago, IL: University of Chicago Press.
2.
AdlerPSKwonSWHeckscherC (2008) Perspective—professional work: The emergence of collaborative community. Organization Science19(2): 359–376.
3.
AlvessonM (2001) Knowledge work: Ambiguity, image and identity. Human Relations54(7): 863–886.
4.
AnandNGardnerHKMorrisT (2007) Knowledge-based innovation: Emergence and embedding of new practice areas in management consulting firms. Academy of Management Journal50(2): 406–428.
5.
ArnoldBLHagenJ (1992) The structure of prosecuted professional deviance among lawyers. American Sociological Review57(6): 771–780.
6.
ArrowKJ (1985) Informational structure of the firm. American Economic Review75(2): 303–307.
7.
BabbieE (2004) The Practice of Social Research, 10th ed.Belmont, CA: Thomson.
8.
BarnetJHKarsonMJ (1987) Personal values and business decisions: An exploratory investigation. Journal of Business Ethics6(5): 371–382.
9.
BriscoeF (2007). From iron cage to iron shield? How bureaucracy enables temporal flexibility for professional service workers. Organization Science18(2): 297–314.
10.
BrintS (1994) In an Age of Experts: The Changing Role of Professionals in Politics and Public Life. Princeton, NJ: Princeton University Press.
11.
BrivotM (2011) Controls of knowledge production, sharing and use in bureaucratized professional service firms. Organization Studies32(4): 489–508.
12.
BrockDM (2006) The changing professional organization: A review of competing archetypes. International Journal of Management Reviews8(3): 157–174.
13.
BrockDPowellMHiningsCR (1999) Restructuring the Professional Organization: Accounting, Healthcare and Law. London: Routledge.
14.
BroschakJP (2001) Do the actors make the play? Individual mobility and the dissolution of interorganizational relationships. Paper presented at OMT division. Academy of Management Annual Meeting, Washington, DC, August.
15.
BrownMETreviñoLKHarrisonDA (2005) Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes97(2): 117–134.
16.
CameronACTrivediPK (1998) Regression Analysis of Count Data. Cambridge: Cambridge University Press.
17.
CarmineEGZellerRA (1979) Reliability and Validity Assessment: Sage University Paper on Quantitative Applications in the Social Sciences. Beverly Hills, CA: SAGE.
18.
CoffeeJC (2006) Gatekeepers: The Professions and Corporate Governance. New York: Oxford University Press.
19.
CombsJGKetchenDJJr (1999) Explaining interfirm cooperation and performance: Toward a reconciliation of predictions from the resource-based view and organizational economics. Strategic Management Journal20(9): 867–888.
20.
ConnellyBLTihanyiLCrookTRGangloffKA (2014) Tournament theory: Thirty years of contests and competitions. Journal of Management40(1): 16–47.
21.
CooperDJHiningsBGreenwoodRBrownJL (1996) Sedimentation and transformation in organizational change: The case of Canadian law firms. Organization Studies17(4): 623–647.
22.
CummingDLeungTYRuiO (2015) Gender diversity and securities fraud. Academy of Management Journal58(5): 1572–1593.
23.
CurtisDMKaufmanBJ (2003) A public view of attorney discipline in Florida: Statistics, commentary, and analysis of disciplinary action against licensed attorneys in the State of Florida from 1988–2002. Nova Law Review28(1): 669–719.
24.
DillmanDA (2007) Mail and Internet Surveys. New York: Wiley.
25.
DinovitzerRGarthBG (2007) Lawyer satisfaction in the process of structuring legal careers. Law and Society Review41(1): 1–50.
26.
DinovitzerRGunzHPGunzSP (2014) Reconsidering lawyer autonomy: The nexus between firm, lawyer and client in large commercial practice. American Business Law Journal51(3): 661–719.
27.
DinovitzerRHaganJ (2013) Hierarchical structure and gender dissimilarity in American legal labor markets. Social Forces92(3): 929–955.
28.
DinovitzerRGunzHPGunzSP (2015) Professional ethics: Origins, applications and developments. In: EmpsonLMuzioDBroschakJHiningsB (eds) The Oxford Handbook of Professional Service Firms. Oxford: University of Oxford Press, 113–134.
29.
DirsmithMWHeianJBCovaleskiMA (1997) Structure and agency in an institutionalized setting: The application and social transformation of control in the big six. Accounting, Organizations and Society22(1): 1–27.
30.
DixitAK (2004) Lawlessness and Economics: Alternative Modes of Governance. Princeton, NJ: Princeton University Press.
31.
EisenhardtKM (1989) Agency theory: An assessment and review. Academy of Management Review14(1): 57–74.
32.
EmpsonL (2007) Managing the Modern Law Firm: New Challenges, New Perspectives. New York: Oxford University Press.
33.
EmpsonL (2012) Beyond dichotomies: A multi-stage model of governance in professional service firms. In: ReihlenMWerrA (eds) Handbook of Research on Entrepreneurship in Professional Services. Cheltenham: Edward Elgar Publishing Limited.
34.
EmpsonLChapmanC (2006) Partnership versus corporation: Implications of alternative forms of governance in professional service firms. In: GreenwoodRSuddabyR (eds) Professional Service Firms. Bingley: Emerald Group Publishing Limited, 139–170.
35.
EmpsonLLangleyA (2015) Leadership and professionals: Multiple manifestations of influence in professional service firms. In: EmpsonLMuzioDBroschakJHiningsB (eds) The Oxford Handbook of Professional Service Firms. Oxford: University of Oxford Press.
36.
EmpsonLMuzioDBroschakJHiningsB (2015) The Oxford Handbook of Professional Service Firms. Oxford: Oxford University Press.
37.
FamaEFJensenMC (1983) Separation of ownership and control. Journal of Law and Economics26(2): 301–349.
38.
FasterlingB (2009) The managerial law firm and the globalization of legal ethics. Journal of Business Ethics88(1): 21–34.
39.
FaulconbridgeJRMuzioD (2007) Reinserting the professional into the study of globalizing professional service firms: The case of law. Global Networks7(3): 249–270.
40.
FortneySGordonT (2012) Adopting law firm management systems to survive and thrive: A study of the Australian approach to management-based regulation. University of St. Thomas Law Journal10(1): 152–194.
41.
FrankBSchulzeGG (2000) Does economics make citizens corrupt?Journal of Economic Behavior and Organization43(1): 101–113.
42.
FrankRHGilovichTReganDT (1993) Does studying economics inhibit cooperation. Journal of Economic Perspectives7(2): 159–171.
43.
FreidsonE (1986) Professional Powers: A Study of the Institutionalization of Formal Knowledge. Chicago, IL: University of Chicago Press.
44.
FreidsonE (1994) Professionalism Reborn: Theory, Prophecy, and Policy. Chicago, IL: University of Chicago Press.
45.
GabbionetaCPrakashRGreenwoodR (2014) Sustained corporate corruption and processes of institutional ascription within professional networks. Journal of Professions and Organization1(1): 16–32.
46.
GibsonDE (2003) Developing the professional self-concept: Role model construals in early, middle, and late career stages. Organization Science14(5): 591–610.
47.
GoodeWJ (1957) Community within a community: The professions. American Sociological Review22(2): 194–200.
48.
GreenwoodR (2007) Your ethics: Redefining professionalism? The impact of management change. In: Empson (ed.) Managing the Modern Law Firm: New Challenges, New Perspectives. Oxford: Oxford University Press, 186–195.
49.
GreenwoodREmpsonL (2003) The professional partnership: Relic or exemplary form of governance?Organization Studies24(6): 909–933.
50.
GreenwoodRSuddabyR (2006) Professional Service Firms. Bingley: Emerald Group Publishing Limited.
51.
GreenwoodRHiningsCRBrownJ (1990) ‘P 2-Form’ strategic management: Corporate practices in professional partnerships. Academy of Management Journal33(4): 725–755.
52.
GreenwoodRLiSXPrakashRDeephouseDL (2005) Reputation, diversification, and organizational explanations of performance in professional service firms. Organization Science16(6): 661–673.
53.
GreenwoodRSuddabyRHiningsCR (2002) Theorizing change: The role of professional associations in the transformation of institutionalized fields. Academy of Management Journal45(1): 58–80.
54.
GroysbergBLeeLE (2009) Hiring stars and their colleagues: Exploration and exploitation in professional service firms. Organization science20(4): 740–758.
55.
HealyPMPalepuKG (2001) Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature. Journal of Accounting and Economics31(1–3): 405–440.
56.
HinkinTR (1998) A brief tutorial on the development of measures for use in survey questionnaires. Organizational Research Methods1(1): 104–121.
57.
HittMAShimizuKUhlenbruckKBiermanL (2006) The importance of resources in the internationalization of professional service firms: The good, the bad, and the ugly. Academy of Management Journal49(6): 1137–1157.
58.
IacusSMKingGPorroG (2012) Causal inference without balance checking: Coarsened exact matching. Political Analysis20(1): 1–24.
59.
JacobidesMGCrosonDC (2001) Information policy: Shaping the value of agency relationships. Academy of Management Review26(2): 202–223.
60.
JamesLRDemareeRGWolfG (1984) Estimating within-group interrater reliability with and without response bias. Journal of Applied Psychology69(1): 85–98.
61.
JonesGR (1990) Governing customer-service organization exchange. Journal of Business Research20(1): 23–29.
62.
KaplanSEWhitecottonSM (2001) An examination of auditors’ reporting intentions when another auditor is offered client employment. Auditing: A Journal of Practice and Theory20(1): 45–63.
63.
KingRClarksonP (2015) Management control system design, ownership, and performance in professional service organizations. Accounting, Organizations and Society45: 24–39.
64.
KippingMKirkpatrickI (2013) Alternative pathways of change in professional service firms: The case of management consulting. Journal of Management Studies50(5): 778–807.
65.
KirkpatrickIMuzioDAckroydS (2012) Professions and professionalism in management consulting. In: KippingMClarkT (eds) The Oxford Handbook of Management Consulting. Oxford: Oxford University Press, 187–206.
66.
Kish-GephartJJHarrisonDATreviñoLK (2010) Bad apples, bad cases, and bad barrels: Meta-analytic evidence about sources of unethical decisions at work. Journal of Applied Psychology95(1): 1–31.
67.
KleinBLefflerK (1981) The role of market forces in assuring contractual performance. Journal of Political Economy89(4): 615–641.
68.
KohliRKettingerWJ (2004) Informating the clan: Controlling physicians’ costs and outcomes. MIS Quarterly28(3): 363–394.
69.
LanderMWHeugensPPMARvan OosterhoutJ (2017a) Drift or alignment? A configurational analysis of law firms’ ability to combine profitability with professionalism. Journal of Professions and Organization4(2): 123–148.
70.
LanderMWHeugensPPMARvan OosterhoutJ (2017b) Towards and integrated framework of professional partnership performance: The role of formal governance and strategic planning. Human Relations70(11): 1388–1414.
71.
LawrenceTB (1999) Institutional strategy. Journal of Management25(2): 161–188.
72.
LeBretonJMSenterJL (2008) Answers to 20 questions about interrater reliability and interrater agreement. Organizational Research Methods11(4): 815–852.
73.
Leeper PiqueroNBisaccia MeitlMBrankEMWoolardJLLanza-KaduceLPicqueroAR (2016) Exploring lawyer misconduct: An examination of the self-regulation process. Deviant Behavior37(5): 573–584.
74.
LevinJTadelisS (2005) Profit sharing and the role of professional partnerships. Quarterly Journal of Economics120(1): 131–172.
75.
LewbelA (2007) Endogenous selection or treatment model estimation. Journal of Econometrics141(2): 777–806.
76.
LorschJWTierneyTJ (2002) Aligning the Stars: How to Succeed When Professionals Drive Results. Boston, MA: Harvard Business School Press.
77.
LøwendahlB (2005) Strategic Management of Professional Service Firms. Copenhagen: Copenhagen Business School Press.
78.
McDonaldGMZeppRA (1988) Ethical perceptions of Hong Kong Chinese business managers. Journal of Business Ethics7(11): 835–845.
79.
McKennaCD (2008) Give professionalization a chance! Why management consulting may yet become a full profession. In: MuzioDAckroydSChanletJ-F (eds) Redirections in the Study of Expert Labour: Established Professions and New Expert Occupations. Basingstoke: Palgrave Macmillan.
80.
MaisterDH (2012) Managing the Professional Service Firm. New York: Simon and Schuster.
81.
MalhotraNMorrisT (2009) Heterogeneity in professional service firms. Journal of Management Studies46(6): 895–922.
82.
MalhotraNMorrisTHiningsCR (2006) Variation in organizational form among professional service organizations. In: GreenwoodRSuddabyR (eds) Professional Service Firms. Bingley: Emerald Group Publishing Limited, 171–202.
83.
MalosSBCampionMA (2000) Human resource strategy and career mobility in professional service firms: A test of an options-based model. Academy of Management Journal43(4): 749–760.
84.
MazmanianMOrlikowskiWJYatesJ (2013) The autonomy paradox: The implications of mobile email devices for knowledge professionals. Organization Science24(5): 1337–1357.
85.
MillerGAChapmanJP (2001) Misunderstanding analysis of covariance. Journal of Abnormal Psychology110(1): 40–48.
86.
MorganGQuackS (2005) Institutional legacies and firm dynamics: The growth and internationalization of UK and German law firms. Organization Studies26(12): 1765–1785.
87.
MorganSLWinshipC (2007) Counterfactual and Causal Inference: Methods and Principles for Social Research. Cambridge: Cambridge University Press.
88.
MorrisT (2001) Asserting property rights: Knowledge codification in the professional service firm. Human Relations54(7): 819–834.
89.
MorrisTPinningtonA (1998) Promotion to partner in professional service firms. Human Relations51(1): 3–24.
90.
MuzioDFaulconbridgeJ (2013) The global professional service firm: “One firm” models versus (Italian) distant institutionalized practices. Organization Studies34(7): 897–925.
91.
MuzioDFaulconbridgeJGabbionetaCGreenwoodR (2016) Bad apples, bad barrels and bad cellars: A “boundaries” perspective on professional misconduct. In: PalmerDSmith-CroweKGreenwoodR (eds) Organizational Wrongdoing. Cambridge: Cambridge University Press, 141–175.
92.
NachumL (1996) Winners and losers in professional services: What makes the difference?Service Industries Journal16(4): 474–490.
93.
NederhofAJ (1985) Methods of coping with social desirability bias: A review. European Journal of Social Psychology15(3): 263–280.
94.
NunnallyJ (1978) Psychometric Methods. New York: McGraw-Hill.
95.
ParkerC (2004) Law firms incorporated: How incorporation could and should make firms more ethically responsible. Queensland Law Journal23(2): 347–380.
96.
ParkerCGordonTMarkS (2010) Regulating law firm ethics management: An empirical assessment of an innovation in regulation of the legal profession in New South Wales. Journal of Law and Society37(3): 466–500.
97.
ParsonsT (1939) The professions and social structure. Social Forces17(4) : 457–467.
98.
ParsonsT (1968) Professions. In: SillsD (ed.) International Encyclopedia of the Social Sciences, Vol. XII. New York: Macmillan, Free Press, 536–547.
99.
PetzoldJD (2009) Firm offers: Are publicly traded law firms abroad indicative of the future of the United States legal sector. Wisconsin Law Review67(1): 67–103.
100.
PickeringME (2015) An exploratory study of organizational governance in publicly-quoted professional service firms. Organization Studies36(6): 779–807.
101.
PickeringME (2017) Post-acquisition integration processes in publicly owned professional service firms: Senior professional behavior and company performance. Journal of Organizational Behavior38(7): 950–976.
102.
PinningtonAH (2011) Competence development and career advancement in professional service firms. Personnel Review40(4): 443–465.
103.
PinningtonAHMorrisT (2003) Archetype change in professional organizations: Survey evidence from large law firms. British Journal of Management14(1): 85–99.
104.
PonemonLA (1990) Ethical judgments in accounting: A cognitive-developmental perspective. Critical Perspectives on Accounting1(2): 227–251.
105.
PonemonLA (1992) Ethical reasoning and selection-socialization in accounting. Accounting, Organization and Society17(3–4): 239–258.
106.
RamM (1999) Managing autonomy: Employment relations in small professional service firms. International Small Business Journal17(2): 13–30.
107.
RaudenbushSWBrykA (2002) Hierarchical Linear Models: Applications and Data Analysis Methods. Thousand Oaks, CA: SAGE.
108.
RaudenbushSWBrykACongdonR (2004) HLM 6 for Windows [Computer software]. Lincolnwood, IL: Scientific Software International, Inc.
109.
ReayTHiningsCR (2009) Managing the rivalry of competing institutional logics. Organization Studies30(6): 629–652.
110.
RichterADickmannMGraubnerM (2008) Patterns of human resource management in consulting firms. Personnel Review37(2): 184–202.
111.
RiveraLA (2012) Hiring as cultural matching: The case of elite professional service firms. American Sociological Review77(6): 999–1022.
112.
RobertsonDCAndersonE (1993) Control system and task environment effect on ethical judgment: An exploratory study of industrial salespeople. Organization Science4(4): 617–644.
113.
RobertsonMScarbroughHSwanJ (2003) Knowledge creation in professional service firms: Institutional effects. Organization Studies24(6): 831–857.
114.
RogersPRMillerAJudgeWQ (1999) Using information-processing theory to understand planning/performance relationships in the context of strategy. Strategic Management Journal20(6): 567–577.
115.
RossSA (1973) The economic theory of agency: The principal’s problem. American Economic Review63(2): 134–139.
116.
SchneyerT (2011) On further reflection: How ‘professional self-regulation’ should promote compliance with broad ethical duties of law firm management. Arizona Law Review53(2): 577–628.
117.
SharmaA (1997) Professional as agent: Asymmetry in Agency Exchange. Academy of Management Review22(3): 758–798.
118.
SharpB (1996) Brand equity and market-based assets of professional service firms. Journal of Professional Services Marketing13(1): 3–13.
119.
SnijdersTAB (2011) Multilevel Analysis. Berlin Heidelberg: Springer Berlin Heidelberg.
120.
SnijdersTABBoskerRJ (1999) Multilevel Analysis: An Introduction to Basic and Advanced Multilevel Modeling. London: SAGE.
121.
SparDL (1997) Lawyers abroad: The internationalization of legal practice. California Management Review39(3): 8–28.
122.
SteenkampJEMVan TrijpHCM (1991) The use of lisrel in validating marketing constructs. International Journal of Research in Marketing8(4): 284–299.
123.
SubramaniamMYoundtMA (2005) The influence of intellectual capital on the types of innovative capabilities. Academy of Management Journal48(3): 450–463.
124.
SuddabyRGreenwoodRWilderomC (2008) Introduction to the Journal of Organizational Behavior’s Special Issue on Professional Service Firms: Where Organization Theory and Organizational Behavior might meet. Journal of Organizational Behavior29(8): 989–994.
125.
SusensoYPinningtonAH (2017) The war for talent: Human capital challenges for professional service firms. Asia Pacific Business Review23(2): 205–229.
126.
TeeceDJ (2003) Expert talent and the design of (professional services) firms. Industrial and Corporate Change12(4): 895–916.
127.
TolbertPSSternRN (1991) Organizations of professionals: Governance structures in large law firms. In: TolbertPSBarleySR (eds) Research in the Sociology of Organizations: Vol 8. Greenwich, CT: JAI Press, 97–118.
128.
TreviñoLKWeaverGR (2003) Managing Ethics in Business Organizations: Social Scientific Perspectives. Stanford, CA: Stanford Business Books.
129.
TreviñoLKWeaverGRGibsonDGTofflerBL (1999) Managing ethics and legal compliance: What works and what hurts. California Management Review41(2): 131–151.
130.
VaalerPMMcNamaraG (2004) Crisis and competition in expert organizational decision making: Credit-rating agencies and their response to turbulence in emerging economies. Organization Science15(6): 687–703.
131.
Von NordenflychtA (2010) What is a professional service firm? Towards a theory and taxonomy of knowledge intensive firms. Academy of Management Review35(1): 155–174.
132.
Von NordenflychtA (2014) Does the emergence of publicly traded professional service firms undermine the theory of the professional partnership? A cross-industry historical analysis. Journal of Professions and Organization1(2): 139–160.
133.
WilkinsDGulatiGM (1996) Why are there so few black lawyers in corporate law firms? An institutional analysis. California Law Review84(3): 493–625.
134.
WilkinsDDinovitzerRBatraR (2007) Urban law school graduates in large law firms. Southwestern University Law Review36(3): 433–507.
135.
ZardkoohiALBiermanLPaninaDChakrabartyS (2011) Revisiting a proposed definition of professional service firms. Academy of Management Review36(1): 180–184.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
