Lateral hiring and the performance of professional service firms: the moderating effects of leverage ratio

Kwang-Ho Kim (First Author), Tae-Yeol Kim (Participant Author), Tae-Hyun Kim (Participant Author), Heejung Byun (Participant Author)

Research output: Contribution to journalJournal

5 Citations (Web of Science)


We theorized and tested the performance implications of the lateral hiring by professional service firms (i.e. law firms). Using a longitudinal dataset of lateral partner hires in 148 US law firms between the years of 2004 and 2008, the results indicated that the size of lateral hiring had a reversed U-shape relationship with the financial performance of a firm. In addition, the leverage ratio (i.e. the ratio between associate lawyers and partners) significantly moderated the reversed U-shape relationship between lateral hiring and firm performance, such that the placement of the bend in the curvilinear relationship, that is, the threshold, occurred more quickly at a low than at a high leverage ratio. This study contributes to the literature on strategic human resource management in professional service firms by providing empirical evidence on the effect of lateral hires and by emphasizing that lateral partner hiring should be considered with other important HR issues to fully capitalize lateral partners.
Original languageEnglish
Pages (from-to)338-354
JournalInternational Journal of Human Resource Management
Issue number3
Publication statusPublished - 2016

Corresponding author email

Project name

Hankuk University of Foreign Studies Research Fund

Project sponsor


Project No.



  • firm performance
  • human capital structure
  • lateral hiring
  • leverage ratio
  • professional service firms

Indexed by

  • ABDC-A
  • Scopus
  • SSCI


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