Networks, Information Transfer, and Status Conferral: The Role of Social Capital in Income Stratification among Lawyers

Abstract

The focus of this article is to examine how and to what extent social networks serve to alleviate information problems on both demand and supply sides of the market, and how this mechanism contributes to income inequality among legal service providers. The empirical context of this study is a random sample of urban lawyers in Chicago. The findings indicate that a lawyer benefits not only from having access to social capital that provides timely and novel information related to solving work-related tasks, but also from the endorsement by high-status network partners. In addition, empirical analyses reveal that the returns on ties to high-status others, net of control, and other social capital variables vary according to the level of client uncertainty in the market.