Page 100 - The Handbook - Law Firm Networks 2018
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The Handbook: Law Firm Networks
ways to reach clients. For example, the Transatlantic Law International network has announced that they will
form an internal network that actually provides the legal services related to employment.429
Boutique specialty networks have unique access to resources because of their specialization. It means that
they can compete with the largest firms, which may have internal boutiques but also a difficult time
separating them from the firms at large. Technology will permit bundling these resources.
The technology enables them to communicate among themselves to form a virtual global boutique, which
can be easily managed using software that is freely available, like LinkedIn. Referrals will increase as the
networks members get to know one another.
Predictions:
1. Specialty networks will become the first virtual global boutiques.
2. The networks will target internal departments at corporations to supply outsourced services.
3. Specialty networks will form their own networks to work together to offer services to their clients.
What about Accounting Networks?
Accounting firms have very specific roadmaps and models for their operations. Their organizations are more
homogenous because their functions of audit, tax, and financial consulting are spread throughout each
member firm. Accounting network members tend to have similar clients. Their internal networking issues
relate to the demography and structure of accounting firms.
Demography will affect the networks. For example, the ratio of the number of partners to the number of
professional staff is much higher than in law firms.430 Very few of the staff will become partners or directors
who have a capital interest in the firm. Accounting firms employ a large number of young professionals. This
affects the culture of the firm. The result is that the firms tend to be more hierarchical than law firms. These
demographic factors mean that participation in networks is likely to be limited to the principals.
Accounting firms have inherent structural issues that can affect network participation. For example, a review
of the largest accounting firms in the United States reveals that many are first- and second-generation firms,
i.e., the founders are still active in the firm. A comparison with the largest 100 law firms in the United States
would show that almost all have more than three generations. Accounting firms may be more prone to break-
ups or changes, which in turn affect the networks. For example, Praxity was formed because the large U.S.
and European firms did not want to be identified with an English firm.
The accounting market is also changing because more networks are trying to become Level 3 networks. They
are going up against a ceiling of the Big 4 for public company auditing and an ever-increasing level of
sophistication by the top 10 non-Big 4 firms. They are also being driven toward either integration by the
application of the concept of networks used by IFAC and the European Union, or becoming a loose
association in order to avoid vicarious liability issues.
However, from an overall perspective, there will not be many changes in accounting networks for the
foreseeable future. The Big 4 have something in common: They audit public companies that will not change.
429 Neil Rose, London-Based International Network Eyes Employment Law Expansion, LEGAL FUTURES (Nov. 6, 2013),
www.legalfutures.co.uk/latest-news/london-based-international-network-eyes-employment-law-expansion.
430 Phil Smith, Networks Survey: Global Risk, ACCOUNTANCY AGE, November 6, 2008, www.accountancyage.com/aa/feature/1748284/networks-
survey-global-risk.
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ways to reach clients. For example, the Transatlantic Law International network has announced that they will
form an internal network that actually provides the legal services related to employment.429
Boutique specialty networks have unique access to resources because of their specialization. It means that
they can compete with the largest firms, which may have internal boutiques but also a difficult time
separating them from the firms at large. Technology will permit bundling these resources.
The technology enables them to communicate among themselves to form a virtual global boutique, which
can be easily managed using software that is freely available, like LinkedIn. Referrals will increase as the
networks members get to know one another.
Predictions:
1. Specialty networks will become the first virtual global boutiques.
2. The networks will target internal departments at corporations to supply outsourced services.
3. Specialty networks will form their own networks to work together to offer services to their clients.
What about Accounting Networks?
Accounting firms have very specific roadmaps and models for their operations. Their organizations are more
homogenous because their functions of audit, tax, and financial consulting are spread throughout each
member firm. Accounting network members tend to have similar clients. Their internal networking issues
relate to the demography and structure of accounting firms.
Demography will affect the networks. For example, the ratio of the number of partners to the number of
professional staff is much higher than in law firms.430 Very few of the staff will become partners or directors
who have a capital interest in the firm. Accounting firms employ a large number of young professionals. This
affects the culture of the firm. The result is that the firms tend to be more hierarchical than law firms. These
demographic factors mean that participation in networks is likely to be limited to the principals.
Accounting firms have inherent structural issues that can affect network participation. For example, a review
of the largest accounting firms in the United States reveals that many are first- and second-generation firms,
i.e., the founders are still active in the firm. A comparison with the largest 100 law firms in the United States
would show that almost all have more than three generations. Accounting firms may be more prone to break-
ups or changes, which in turn affect the networks. For example, Praxity was formed because the large U.S.
and European firms did not want to be identified with an English firm.
The accounting market is also changing because more networks are trying to become Level 3 networks. They
are going up against a ceiling of the Big 4 for public company auditing and an ever-increasing level of
sophistication by the top 10 non-Big 4 firms. They are also being driven toward either integration by the
application of the concept of networks used by IFAC and the European Union, or becoming a loose
association in order to avoid vicarious liability issues.
However, from an overall perspective, there will not be many changes in accounting networks for the
foreseeable future. The Big 4 have something in common: They audit public companies that will not change.
429 Neil Rose, London-Based International Network Eyes Employment Law Expansion, LEGAL FUTURES (Nov. 6, 2013),
www.legalfutures.co.uk/latest-news/london-based-international-network-eyes-employment-law-expansion.
430 Phil Smith, Networks Survey: Global Risk, ACCOUNTANCY AGE, November 6, 2008, www.accountancyage.com/aa/feature/1748284/networks-
survey-global-risk.
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