Employee mobility networks and status transfer in U.S big law

Abstract

Firms in organizational fields frequently hire and lose employees to competing firms. What is the impact of employee mobility on the status of organizations within a field? Unfortunately, empirical evidence is lacking about how hiring professionals from high or low-status actors, especially status that is obtained through third-party evaluation, impact the focal firm’s status. This research examines employee mobility across the largest law firms in the United States from 2010 to 2016 and employs fixed effects modeling to estimate associations among the status of firms from which partners were hired, network centrality, and the organizational status of hiring firms. Results showed that firms’ status increased when they hired, on average, from high-status firms, and that this association was stronger amongst more centrally located firms. Namely, we found that although the impact of sending firms’ status has a significant impact on the focal firms’ status, such an effect depends on network centrality of the sending firm. These results support the notion of status portability as well as the importance of the firm’s network position for status enhancement.