Client-Related Factors and Collaboration Between Human Assets

Abstract

Collaborations between individuals in firms have important implications for the development of relational and human capital. In knowledge-intensive contexts where collaborations are formed to deliver services to clients, collaboration decisions can involve non-trivial trade-offs between short-term and long-term benefits: individuals and firms must carefully manage the trade-offs between leveraging existing relational and human capital for the reliable performance of repeat collaboration and creating new relational and human capital through new collaboration. Building from the premise that servicing clients is central to collaboration decisions in human-asset-intensive firms, we examine how client-related factors shape collaboration decisions among lawyers (partners) in UK law firms. We focus on three key client-related dimensions that we predict govern collaboration decisions: the depth of individual- and firm-level relationships with the focal client, key client attributes that reflect the client’s status and its use of different firms to undertake its outsourced work, and client-driven individual- and firm-level resource constraint. Our empirical findings support our proposition that client-related factors influence the pattern of collaborations between individuals in firms. We also reveal how client-related factors at the individual level can have opposite effects on collaboration decisions from those at the firm level. Overall, our findings contribute to the research literatures on relational capital, strategic human capital, team formation, and professional service firms.

Keywords: Strategic Human Capital; Resource Reconfiguration; Resource Based Theory; Micro-Foundations of Strategy; Human-Asset-Intensive Firms; M&A