Embedded transactions and market consequences: A network analysis of the legal services industry

The objective of my dissertation is to examine the social structural underpinnings of economic stratification and market inequality. More specifically, it addresses how and to what extent relational forces, cast largely in interpersonal and interorganizational network terms, shape the processes of competition and resulting outcomes for economic actors, ceteris paribus. By investigating the function of what has now become popularly referred to as “social capital” (Burt 2000; Coleman 1988; Lin 2001; Portes 1998), this project explicitly seeks to add to the growing literature on social network analysis. The main focus and the contribution of this dissertation are thus theoretically driven: to offer a critical look at the previous approaches and to present a more nuanced perspective through extensive literature reviews and related quantitative research.; The empirical context for this study is the U.S. legal services industry. The data come from two cross-sectional surveys of Chicago lawyers (1975 & 1995) and longitudinal information on top 250 American law firms and their Fortune 250 (financial) clients (1989–1997). Using network analytic and event history techniques, I explore the causal role of relational variables in generating competition and stratification for both human and organizational actors in the context of the legal market (i.e., lawyers and law firms). In doing so, I propose a conceptual tripod on which the (network) analytic lens could be placed in understanding the dynamics of market transactions among buyers and sellers of legal services and their consequences for individual and institutional participants: social networks (1) as the conduits of information transfer; (2) as the source of market signaling or status; (3) and as the purveyor of governance mechanism.; Substantive discussions and empirical analyses in this dissertation are guided by these three broad segments of network functionality. Through the examination of the legal services industry, I demonstrate that these theoretical segments constitute three related yet distinct aspects of social capital. My empirical findings not only shed light on the specific study of the legal profession but, more broadly, offer important lessons for the burgeoning field of “new economic sociology” (Granovetter and Swedler 1992).