Optimal positioning in the legal market requires two things: a critical look back, and a realistic look ahead. One thing is certain: the legal market will continue to be on the move in 2020, too, and will require one’s own position to be adjusted. Below, you will find a brief overview of the currently most important drivers in the legal market.

In the last two decades, economic motivation research has undergone a paradigm shift when it comes to the effect of incentive schemes on individual performance and motivation. Inspired by self-determination theory, a new branch in economics evolved called behavioral economics. Especially by evidencing the negative effect of “pay-for-performance” on intrinsic motivation, called the “crowding-out” or “overjustification” effect, it challenges the economic paradigm of the relative price-effect and its inherent belief in incentives as universal remedy for motivation and individual performance. This article reviews the findings of behavioral economics on motivation. Drawing on these results we discuss which institutional conditions strengthen rather than weaken intrinsic motivation. We demonstrate that fairness, participation, market-driven wages, and normatively affected decision-making contexts have a positive effect on intrinsic motivation.

This paper combines a behavioral reward-risk model based on prospect theory with multiple investment accounts to explain the asset allocation puzzle, that is, the observation that investors violate the two-fund separation property of optimal mean-variance allocations. In a empirical analysis with U.S. data, the authors show that investors with preference according to the behavioral reward-risk model and multiple investment accounts, invest a higher proportion into bonds and large cap stocks as their risk tolerance diminishes, consistently with the empirical findings.