Page 14 - The Handbook - Law Firm Networks 2018
P. 14
Chapter 1 – Law Firm Networks
What is a Network?
All businesses represent a pool of financial and human capital that Figure 1 Video Chapter 1
creates a product or performs a service. This capital can be configured in
an unlimited number of ways to achieve specific objectives for the
service provider or manufacturer. In international professional services,
the traditional delivery methods are operations by means of a controlled
entity or membership in an association of independent service providers.
These associations are commonly referred to as “professional services
networks.” Law firm networks are one type of professional services
networks.
Professional service networks are primarily found in accounting and law. They may also be found in
investment banking, insurance, real estate, and architectural services. Every profession that operates locally
but has clients in multiple locations is a potential profession for a network. This book will focus on legal,
accounting, multidisciplinary, and specialty practice networks. Today, members of these networks employ
more than one million professionals and staff, and have annual gross revenues that exceed $200 billion. In
the legal profession revenues approach $60 billion U.S. dollars.
In order to provide a broad perspective, the networks discussed will include well-known accounting networks
like the Big 4. This will allow comparisons with the better-known law firm and multidisciplinary networks,
such as Lex Mundi, World Services Group, TerraLex, and Meritas. Lastly, the Swiss association – verein –
will be discussed, as it is used by seven firms to offer global legal practice through independent firms. In
sum, all of the 170-plus existing law firm networks and associations will be evaluated.
The purpose of this book is to provide a broad overview of legal networks in 2017. It begins with their
history. Reviewing how networks are organized provides insight as to how they are governed and operate.
This begins with research and is illustrated by numerous examples in both law and accounting. In order for a
network to be effective, it must develop an inter-network brand for its members. External branding can be
equally important. Operations, governance, and branding have legal and regulatory consequences that must
be evaluated. Networks are affected by other externalities, such as regulations, economic conditions, and
technology. All have ramifications. Finally, the book predicts the future of law firm networks as the world
changes even more.
Networks models are much more subjective than objective. While there may be different levels and
management structures, their commonality is that they are sui generis. Each network model is unique,
formed for different reasons, and there are various motivations. It does not matter whether they are a club of
friends or a sophisticated organization with an intricate management structure. The members and potential
members are attracted to structures in which they can pursue their own individual objectives under an
umbrella. While networks clearly do have things in common, each must be viewed in its own unique context.
A successful network is one that meets the expectations of all of its members.
Network organizations are defined by elements of purpose, structure, and process.26 The purpose of a
network is different than that of a company or professional firm in that it is limited to specific activities that
26 M. Van Alstyne, The State of Network Organizations: A Survey of Three Frameworks, J. OF ORG. COMPUTING (1997). “Sociologists argue that
social patterns of human interaction transcend reductionist economic agendas: ‘The pursuit of economic goals is typically accompanied by [such] non-
economic [goals] as sociability, approval, status, and power... Economic action is socially situated and cannot be explained by reference to individual
motives alone,’” citing Granovetter, Problems of Explanation in Economic Sociology, in NETWORKS AND ORGS. 471-490 (N. Nohria & R. G. Eccles,
Eds.).
-1-
What is a Network?
All businesses represent a pool of financial and human capital that Figure 1 Video Chapter 1
creates a product or performs a service. This capital can be configured in
an unlimited number of ways to achieve specific objectives for the
service provider or manufacturer. In international professional services,
the traditional delivery methods are operations by means of a controlled
entity or membership in an association of independent service providers.
These associations are commonly referred to as “professional services
networks.” Law firm networks are one type of professional services
networks.
Professional service networks are primarily found in accounting and law. They may also be found in
investment banking, insurance, real estate, and architectural services. Every profession that operates locally
but has clients in multiple locations is a potential profession for a network. This book will focus on legal,
accounting, multidisciplinary, and specialty practice networks. Today, members of these networks employ
more than one million professionals and staff, and have annual gross revenues that exceed $200 billion. In
the legal profession revenues approach $60 billion U.S. dollars.
In order to provide a broad perspective, the networks discussed will include well-known accounting networks
like the Big 4. This will allow comparisons with the better-known law firm and multidisciplinary networks,
such as Lex Mundi, World Services Group, TerraLex, and Meritas. Lastly, the Swiss association – verein –
will be discussed, as it is used by seven firms to offer global legal practice through independent firms. In
sum, all of the 170-plus existing law firm networks and associations will be evaluated.
The purpose of this book is to provide a broad overview of legal networks in 2017. It begins with their
history. Reviewing how networks are organized provides insight as to how they are governed and operate.
This begins with research and is illustrated by numerous examples in both law and accounting. In order for a
network to be effective, it must develop an inter-network brand for its members. External branding can be
equally important. Operations, governance, and branding have legal and regulatory consequences that must
be evaluated. Networks are affected by other externalities, such as regulations, economic conditions, and
technology. All have ramifications. Finally, the book predicts the future of law firm networks as the world
changes even more.
Networks models are much more subjective than objective. While there may be different levels and
management structures, their commonality is that they are sui generis. Each network model is unique,
formed for different reasons, and there are various motivations. It does not matter whether they are a club of
friends or a sophisticated organization with an intricate management structure. The members and potential
members are attracted to structures in which they can pursue their own individual objectives under an
umbrella. While networks clearly do have things in common, each must be viewed in its own unique context.
A successful network is one that meets the expectations of all of its members.
Network organizations are defined by elements of purpose, structure, and process.26 The purpose of a
network is different than that of a company or professional firm in that it is limited to specific activities that
26 M. Van Alstyne, The State of Network Organizations: A Survey of Three Frameworks, J. OF ORG. COMPUTING (1997). “Sociologists argue that
social patterns of human interaction transcend reductionist economic agendas: ‘The pursuit of economic goals is typically accompanied by [such] non-
economic [goals] as sociability, approval, status, and power... Economic action is socially situated and cannot be explained by reference to individual
motives alone,’” citing Granovetter, Problems of Explanation in Economic Sociology, in NETWORKS AND ORGS. 471-490 (N. Nohria & R. G. Eccles,
Eds.).
-1-
