FREE RIDING, SHIRKING, AND TEAM PRODUCTION IN LEGAL PARTNERSHIPS

A model of team production in legal partnerships, based on the Alchian-Demsetz theory of the firm, is developed and tested empirically in this paper. An estimate of the optimal law-firm size for controlling costly free riding behavior in partnerships is derived. Finally, some survivorship evidence on law-firm sizes, some comparisons of legal and medical group practices, and some thoughts on the role of the sole proprietor in the market for legal services are presented.