Rule enforcement among peers: A lateral control regime

The purpose of this paper is to contribute to the understanding of control among peers. Drawing on a network study of a medium-sized Northeastern U.S. corporate law firm, this work shows that partners - all formally equal and locked in a cooperative situation - have developed an informal 'lateral control regime' to help protect their common interests against free loading due to individual expressive problems. This regime helps peers exercise early monitoring and sanctioning by reducing costs of control. It maintains low costs through appropriate use of social resources or 'relationships' between members. Sanctioners are chosen because they are structurally close to the infractors, but often also because they are relatively more powerful. Some of the costs of control are shown to be shifted to partners with a specific form of status within the firm, that of uncontroversial 'protectors of the common good'. These main sanctioners help prevent situations in which infractors would be reserved preferential treatment because they control resources too important to their close partners.