Is there a Tiger Woods at your firm?

Tiger Woods is back on the green stroking it into the hole, his face no longer in the rough, for the first day of the Masters.

Beyond a flyover involving a terrible pun and controversy over Nike’s resurrection of Woods’ dead father’s voice, the first day was a smooth one. Tiger the Superstar is back.

Last weekend, Jonah Lehrer wrote a piece for the Wall Street Journal about “The Superstar Effect,” suggesting that Tiger will make other golfers play worse just by showing up:

According to a paper by Jennifer Brown, an applied macroeconomist at the Kellogg School of Management at Northwestern University, Mr. Woods is such a dominating golfer that his presence in a tournament can make everyone else play significantly worse. Because his competitors expect him to win, they end up losing; success becomes a self-fulfilling prophecy.

Ms. Brown argues that the superstar effect is not just relevant on the golf course. Instead, she suggests that the presence of superstars can be “de-motivating” in a wide variety of competitions, from the sales office to the law firm.

Brown analyzed PGA Tour data from 1999 through 2006, and discovered that Woods’s presence in a tournament resulted in other golfers taking more strokes. Brown suggests that in situations where success is based on relative performance, a known superstar causes everyone else to give up and step down their game.

We thought that superstars made mediocre associates swing with malice aforethought. But Brown suggests that the “up and out model” at law firms results in great performance from the Tigers bound for partnership, and halfhearted efforts by the rest of the associates who know they’re on their way out…

Lehrer writes:

According to Ms. Brown, the superstar effect is especially pronounced when the rewards for the competition are “nonlinear,” or there’s an extra incentive to finish first. (We assume that the superstar will win, so why chase after meaningless scraps?) Just look at golf: Not only does the tournament winner get a disproportionate amount of prize money, but he or she also gets all the glory.

Ms. Brown cites the competition among newly hired associates at a law firm as another example of a nonlinear incentive structure. “The lawyers know that most of them won’t be retained,” she says. “They either win the competition, or they’re let go.” The problem with such competitions is that when a superstar is present—when one of the legal associates is perceived as the clear favorite—every other lawyer is less likely to exert maximum effort. Because we assume we’re going to lose, we decide to cut our losses, which leads to an overall decrease in employee effort. The cutthroat competition made people less competitive.

It’s an interesting proposition, but working at a law firm isn’t exactly like playing golf. Not all associates are necessarily grasping for the brass ring that is partnership.

For those who do want to make partner, though, a “rockstar” associate or two could de-motivate. If you know the that only one or two associates from your class are going to make partner, and you’re not one of them, maybe you start swinging with less conviction…

But it’s rare that an associate knows exactly how many people are going to make partner from their class. One of our lawyer friends put it this way:

A golf tournament is a time-limited event testing a single skill, whereas making partner is a marathon testing multiple skills (legal work, client development). Also, more than one person can make partner in a given year, while there is only one winner of a golf tournament. Finally, there is an information problem — everyone knows at a given time who is leading the tournament. It is not always obvious to all associates who the stars in their class are.

Wow, our friend is right. A golf tournament sounds a lot more like… law school.

Is There a Tax Prof ‘Superstar Effect?’ [TaxProf Blog]
The Superstar Effect [Wall Street Journal]


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