This study empirically analyzes the relation between ownership of privately held professional service firms and their performance. 

The key factor of production for these firms is the billable hour and is directly controlled by each employee.  Monitoring of individual performance is difficult and ownership or profit sharing has been argued to be an effective means to discourage shirking and improve performance.  Using two data sets the results indicate a convex relation between ownership concentration and performance. 

The results indicate that firms heavily invested in human capital face a trade-off between concentrated ownership, cooperation and firm performance.