Page 15 - CHAPTER 14 Multidisciplinary Organizations (MDOs), the Competitive Alternative to the Big 5
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number of professional groups could be substantially more than those that would be brought in-house by
the Big S. This is because the profitability of each member unit is independent. In addition, professional
services could be extended vertically so that the R-MDO could service different markets, such as
consumers and businesses.
Second, the referral base of the professionals is extended geometrically. Because lawyers are competitors,
networking, despite collegiality, may be somewhat restricted. Building coalitions is difficult because
others at the firm may practice in the same area or have different relationships with lawyers at other
firms. In an MDO the vast majority of the professional are not lawyers and therefore not competitors.
They are not reluctant to make referrals of their clients.
Third, unlike existing networks that are common in the legal profession, the foundation for the R-MDO
would be to extend scope and depth of the traditional organization using new technologies. The objective
is to create the maximum number of relationships between the professionals in each of the disciplines.
Information on professionals, as well as non-proprietary content, would facilitate creating relationships.
An extensive non-confidential knowledge base would be created and shared within the MDO.33
Fourth, access to information on MDOs would not be confined to the participating entities but provided
to clients. Clients could use the information to construct virtual relationships of their own using, as the
initial building blocks, the professionals and services in the R-MDO. This would be of great appeal to
sophisticated clients and of interest to the MDO members.
Once the R-MDO is created, the fundamental question is whether it can meet client needs. This very issue
was discussed in Cyrus Freidheim, The Trillion Dollar Enterprise (Perseus Books, 1998). Freidheim, vice
chairman of Booz-Allen Hamilton, sets out the same elements discussed in this chapter — globalization,
standards and localization — as characteristics that will determine the success of any business the new
economy.
He defines “global” to mean that businesses must serve and have access to clients around the world,
understand customers, meet and anticipate their needs, obtain resources as well as develop market
information. In the professional services market, only the Big 5 have already accomplished this as a result
of their accounting and auditing practices. Law firms, notwithstanding the number of offices, are a long
way from this global coverage.
To be successful, an organization must be able to set world standards. They must show leadership and
innovation, provide value and performance, and have processes, people and capacities that define these
world standards. Many of the large law firms such as Baker & McKenzie and Clifford Chance, are far along
on meeting these definitions. An MDO consisting of the leading firms would have the advantage, since
the highest standards are part of the selection criteria.
Lastly to be global the organization must be local everywhere. Freidheim defines “local” as understanding
local customer markets, having a national image, local workforce and local operations. While the largest
firms may have 50 or more branches, many are not local in that they have few local professionals.34 Some
33 Stratton, ABA Voted No MDP: But What About “Virtual” MDPs, 85 Tax Notes 1122-1124 (Nov. 29, 1999).
34 Of the 50 largest law firms worldwide with sizes from 603 to 2732, the percentage of attorneys outside the country ranges from 9% to 60%.
There are only three firms with over 50% and 12 with between 20% and 50% with most in the 20% to 30% range. Law firms are far from global or
local in other countries.
the Big S. This is because the profitability of each member unit is independent. In addition, professional
services could be extended vertically so that the R-MDO could service different markets, such as
consumers and businesses.
Second, the referral base of the professionals is extended geometrically. Because lawyers are competitors,
networking, despite collegiality, may be somewhat restricted. Building coalitions is difficult because
others at the firm may practice in the same area or have different relationships with lawyers at other
firms. In an MDO the vast majority of the professional are not lawyers and therefore not competitors.
They are not reluctant to make referrals of their clients.
Third, unlike existing networks that are common in the legal profession, the foundation for the R-MDO
would be to extend scope and depth of the traditional organization using new technologies. The objective
is to create the maximum number of relationships between the professionals in each of the disciplines.
Information on professionals, as well as non-proprietary content, would facilitate creating relationships.
An extensive non-confidential knowledge base would be created and shared within the MDO.33
Fourth, access to information on MDOs would not be confined to the participating entities but provided
to clients. Clients could use the information to construct virtual relationships of their own using, as the
initial building blocks, the professionals and services in the R-MDO. This would be of great appeal to
sophisticated clients and of interest to the MDO members.
Once the R-MDO is created, the fundamental question is whether it can meet client needs. This very issue
was discussed in Cyrus Freidheim, The Trillion Dollar Enterprise (Perseus Books, 1998). Freidheim, vice
chairman of Booz-Allen Hamilton, sets out the same elements discussed in this chapter — globalization,
standards and localization — as characteristics that will determine the success of any business the new
economy.
He defines “global” to mean that businesses must serve and have access to clients around the world,
understand customers, meet and anticipate their needs, obtain resources as well as develop market
information. In the professional services market, only the Big 5 have already accomplished this as a result
of their accounting and auditing practices. Law firms, notwithstanding the number of offices, are a long
way from this global coverage.
To be successful, an organization must be able to set world standards. They must show leadership and
innovation, provide value and performance, and have processes, people and capacities that define these
world standards. Many of the large law firms such as Baker & McKenzie and Clifford Chance, are far along
on meeting these definitions. An MDO consisting of the leading firms would have the advantage, since
the highest standards are part of the selection criteria.
Lastly to be global the organization must be local everywhere. Freidheim defines “local” as understanding
local customer markets, having a national image, local workforce and local operations. While the largest
firms may have 50 or more branches, many are not local in that they have few local professionals.34 Some
33 Stratton, ABA Voted No MDP: But What About “Virtual” MDPs, 85 Tax Notes 1122-1124 (Nov. 29, 1999).
34 Of the 50 largest law firms worldwide with sizes from 603 to 2732, the percentage of attorneys outside the country ranges from 9% to 60%.
There are only three firms with over 50% and 12 with between 20% and 50% with most in the 20% to 30% range. Law firms are far from global or
local in other countries.
