Here is one answer, via Marginal Revolution. In a nutshell, large institutional law firms establish personnel policies to limit opportunities for lawyers to defect and bring clients with them.
The underlying mathematical model is clever. Inexperienced attorneys are less productive than experienced ones. In the absence of opportunistic defection, firms would hire equal numbers of junior and senior attorneys, and promote everyone. The junior attorneys would make less than they could elsewhere, but the client-specific knowledge that they built up would be valuable enough to the firm that as senior attorneys, they’d more than make up the difference.
Everything changes when attorneys are able to grab the clients and leave. Instead of splitting the surplus generated by their client-specific knowledge with the law firm, they’d start their own firm and keep it all. In order to keep the experienced attorneys with the knowledge from setting up shop down the street, the firm must let each partner appropriate the full value of the knowledge. That is, they maximize not the total profits but the profits per partner.
Maximizing profits per partner, as any associate can attest, means that the firm will use fewer partners and more associates in doing work. (It also means, in the formal model, that the firm does less total work than the client would prefer, which I find slightly questionable.) It also means that the firm will start trying to minimize contact between associates and clients, lest the associate build up too much client rapport and become a threat to defect:
If our property rights perspective is correct, up-or-out personnel policies discourage grabbing and leaving by dismissing associates before they have established strong relationships with clients. The length of the associate period can therefore be increased (and the unit cost of hiring associates be reduced) if firms limit the direct contacts between clients and associates. Indeed, if it were possible to completely eliminate contact between clients and associates, associates could be employed indefinitely.
And that’s the associate life in a nutshell: no client contact and indefinite employment.