Female and Minority Junior Partners More Effective in Building Business From Outside Firm
Female and minority junior partners in professional service firms may benefit from using different clientele-building strategies than their white male counterparts according to recent research co-authored by Forrest Briscoe of the Penn State Smeal College of Business. By encouraging and supporting these varying strategies, firms could increase both revenue and diversity among senior partners.
Associate Professor of Management and Sociology Briscoe and his co-author Andrew von Nordenflycht of Simon Fraser University identify two primary methods for building clientele—the inheritance strategy and the rainmaking strategy—and find that, while inheritance is effective for white male partners, rainmaking tends to be more lucrative for females and minorities.
“Although both inheritance and rainmaking strategies may be viable in general, they may differ in their effectiveness for women and minorities,” the researchers write.
"Supporting diverse junior partners by enhancing their rainmaking abilities may yield a double payoff in terms of the firm’s overall revenue as well as diversity goals.”
Because the professional-client relationship is based largely on an ongoing social relationship, building clientele in professional service firms is dependent upon building social networks. The inheritance strategy relies on building networks within a firm—often by developing a relationship with a senior partner and inheriting his or her clients upon their retirement.
The researchers explain that, because people tend to build stronger interpersonal relationships with others like them in terms of race and gender, females and minorities find themselves at a disadvantage in building strong relationships with senior partners—still predominantly white males.
The rainmaking strategy, on the other hand, focuses on building networks and acquiring new clientele from outside the firm.
Rainmaking may be a more effective strategy for females and minorities because, in drawing upon social networks external to the firm and having the freedom to choose which clients to pursue, the tendency to build relationships with like genders/ethnicities can work to their advantage.
The researchers pose that, in recognizing the varying results of each strategy, professional service firms can better support junior female and minority partners, leading not only to increased revenue overall but an eventual more diverse group of senior partners.
“[A]s firms increasingly fund and empower rainmaking efforts, they may recognize the particular benefit of those activities for the career development of female and minority partners. Supporting diverse junior partners by enhancing their rainmaking abilities may yield a double payoff in terms of the firm’s overall revenue as well as diversity goals.”
The paper, “Which path to power? Workplace networks and the relative effectiveness of inheritance and rainmaking strategies for professional partners,” appeared in the March issue of the Journal of Professions and Organization. Smeal's Briscoe holds a doctoral degree in management from the Massachusetts Institute of Technology Sloan School of Management and a bachelor’s degree in environmental sciences from Harvard University.