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Compensation Matters: Incentives for Multitasking in a Law Firm

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  • Ann Bartel
  • Brianna Cardiff-Hicks
  • Kathryn Shaw

Abstract

Due to the limited availability of firm-level compensation data, there is little empirical evidence on the impact of compensation plans on personal productivity. We study an international law firm that moves from high-powered individual incentives towards incentives for "leadership" activities that contribute to the firm's long run profitability. The effect of this change on the task allocation of the firm's team leaders is large and robust; team leaders increase their non-billable hours and shift billable hours to team members. Although the motivation for the change in the compensation plan was the multitasking problem, this change also impacted the way tasks were allocated within each team, resulting in greater teamwork.

Suggested Citation

  • Ann Bartel & Brianna Cardiff-Hicks & Kathryn Shaw, 2013. "Compensation Matters: Incentives for Multitasking in a Law Firm," NBER Working Papers 19412, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:19412
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    More about this item

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services

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