This paper uses confidential microdata from the Census of Services to examine lawfirms' field boundaries. We find that the share of lawyers working in field-specializedfirms increases as market size increases and lawyers field-specialize, indicating thattransaction costs among lawyers, and not...

A large theoretical literature focuses on the question: What determines firms’ boundaries?Recently, Garicano and Santos and Holmstrom and Milgrom have proposed theories in whichfirms’ boundaries reflect the division of labor across individuals. This paper discussesstrategies for generating...