Page 19 - The Handbook - Law Firm Networks 2018
P. 19
The Handbook: Law Firm Networks
Chapter 2 – Law Firm or Network? Market Perceptions and Operations
The best way to make this determination is to objectively analyze the different models for providing legal
services from the perspective of their underlying market
perceptions, their common characteristics, and their activities.
(For a detailed analysis of the Verein, see Appendix 6)
In professional services, the external market perception is very
important. It is how a model is understood by those practicing
and providing services to the legal profession. It does not
necessarily reflect the exact legal status of the organization. It also Figure 2 Video Chapter 2
may not reflect how clients view the models. The clients’ perspective
may be that they want access to lawyers and firms who can access multiple resources. They may be
concerned about how their lawyers are able to manage those resources when providing service. Market
perceptions can be very different than the actual legal and operational status.
Network and Association Status
While the lines are not precise, below are some of the elements that distinguish the various models contrasted
with similar models in the accounting profession
Exhibit 3 – Legal, Ethical, Operations, Management, and Branding Status
Big 4 Network Legal Verein Law Firm Law Firm
(network) Network
Members operate under a Yes Yes
common name Yes, with No
Share profits No exceptions Yes
Conflict of interest rules apply Yes No No Yes
Members pay management Yes Yes52 No No
fees or dues Yes53 Yes
Local management has full Split No
authority Yes54 Yes
Operations integrated Yes Yes
Command and control Yes Yes No Yes
management Semi-local No
Global practice groups Yes autonomy Yes
Vicarious liability No Yes Yes Yes
Common joint marketing Yes No No Yes
Common tax liability No Yes Some/No Yes
No No
Business plan Yes Yes
Yes/No Yes Yes No
Known as network No Yes
52 In a recent case, the chief administrative judge of the U.S. International Trade Commission held that Dentons was a law firm for conflict of interest
purposes. See Mark A. Cohen, Denton’s Disqualification and Legal Advertising: Stir But Don’t Shake, BLOOMBERG BNA, July 21, 2015,
https://bol.bna.com/dentons-disqualification-and-legal- (This was preceded by a case alleging a conflict of interest against Dentons).
53 Julie Triedman, Rift Among Rainmakers Complicates Dentons’ Mexico Deal, THE AMERICAN LAWYER, May 19, 2016,
http://www.americanlawyer.com/id=1202758141767/Rift-Among-Rainmakers-Complicates-Dentons-Mexico-Deal#ixzz4Bwa1qQra: “Soria noted
that the deal to become part of Dentons …. did not seem onerous. His office in Mexico City would be required to send 2 percent of its annual
income to the firm’s global management as overhead, plus 23 percent of inbound referral fees.”
54 Supra note 2: “Dentons promised complete freedom on compensation, hiring and other decisions, as well as a steady stream of inbound
referrals.”
-6-
Chapter 2 – Law Firm or Network? Market Perceptions and Operations
The best way to make this determination is to objectively analyze the different models for providing legal
services from the perspective of their underlying market
perceptions, their common characteristics, and their activities.
(For a detailed analysis of the Verein, see Appendix 6)
In professional services, the external market perception is very
important. It is how a model is understood by those practicing
and providing services to the legal profession. It does not
necessarily reflect the exact legal status of the organization. It also Figure 2 Video Chapter 2
may not reflect how clients view the models. The clients’ perspective
may be that they want access to lawyers and firms who can access multiple resources. They may be
concerned about how their lawyers are able to manage those resources when providing service. Market
perceptions can be very different than the actual legal and operational status.
Network and Association Status
While the lines are not precise, below are some of the elements that distinguish the various models contrasted
with similar models in the accounting profession
Exhibit 3 – Legal, Ethical, Operations, Management, and Branding Status
Big 4 Network Legal Verein Law Firm Law Firm
(network) Network
Members operate under a Yes Yes
common name Yes, with No
Share profits No exceptions Yes
Conflict of interest rules apply Yes No No Yes
Members pay management Yes Yes52 No No
fees or dues Yes53 Yes
Local management has full Split No
authority Yes54 Yes
Operations integrated Yes Yes
Command and control Yes Yes No Yes
management Semi-local No
Global practice groups Yes autonomy Yes
Vicarious liability No Yes Yes Yes
Common joint marketing Yes No No Yes
Common tax liability No Yes Some/No Yes
No No
Business plan Yes Yes
Yes/No Yes Yes No
Known as network No Yes
52 In a recent case, the chief administrative judge of the U.S. International Trade Commission held that Dentons was a law firm for conflict of interest
purposes. See Mark A. Cohen, Denton’s Disqualification and Legal Advertising: Stir But Don’t Shake, BLOOMBERG BNA, July 21, 2015,
https://bol.bna.com/dentons-disqualification-and-legal- (This was preceded by a case alleging a conflict of interest against Dentons).
53 Julie Triedman, Rift Among Rainmakers Complicates Dentons’ Mexico Deal, THE AMERICAN LAWYER, May 19, 2016,
http://www.americanlawyer.com/id=1202758141767/Rift-Among-Rainmakers-Complicates-Dentons-Mexico-Deal#ixzz4Bwa1qQra: “Soria noted
that the deal to become part of Dentons …. did not seem onerous. His office in Mexico City would be required to send 2 percent of its annual
income to the firm’s global management as overhead, plus 23 percent of inbound referral fees.”
54 Supra note 2: “Dentons promised complete freedom on compensation, hiring and other decisions, as well as a steady stream of inbound
referrals.”
-6-
