HEC Research Papers Series,
HEC Paris

Abstract: This paper examines when human-capital-intensive firms reconfigure their human assets for incoming client projects, and how clients matter to firms’ reconfiguration decisions. Using micro-data in the UK merger and acquisition (M&A) legal services industry, we find that law firms consistently reconfigure the combinations of lawyers working together on M&A mandates, forgoing synergies from tried-and-tested combinations. Firms’ reconfiguration decisions are also influenced by prior relations with clients, and client attributes. Firms are more likely to use tried-and-tested combinations of lawyers when providing services to existing clients, especially when the same lawyers have served those clients together previously. Further, the economic attractiveness of clients also decreases human asset reconfiguration. Our paper contributes to the literatures on strategic human capital and the micro-foundations of resource-based theory.

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

JEL-codes: L10

41 pages, June 29, 2017

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