Page 33 - The Handbook - Law Firm Networks 2018
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The Handbook: Law Firm Networks
Law firm networks are not all organized by law firms; some have been organized by corporations.169 The
DuPont Legal Network,170 for example, was established by the corporation in 1992 to first consolidate its
outside counsel but then to generate internal efficiencies by creating a network to which all of the outside
counsels were members. Additionally, networks can be organized by corporations for other purposes such as
to offer pro bono services. Thomson Reuters171 has organized such a foundation, which selects law firms for
membership that add prestige to its network. It matches experienced firms to work together on projects. The
motivation of the firms is to establish new contacts at no financial cost. By working on pro bono cases, the
firms may make contacts that lead to new paying clients.
Multidisciplinary Networks
The foundation of multidisciplinary practice began when the Big 6 reached their natural growth limits.
Accounting, auditing, and tax could generate only a finite amount of revenue for the Big 6. Their concept
was simple: use the extensive list of clients to market non-traditional accounting services such as legal,
recruitment, risk management, technology, consulting, and more. The objective was to bring these non-
traditional services “in-house” by using the time-tested network model. The Freidheim graphs clearly
illustrate the advantages of the alliances model.
The expansion could easily be financed using revenue from the traditional services. The initial focus was on
the United States, which represented the largest potential market for these services. The non-traditional
services were then expanded outside of the United States using the model that had been so successful with
traditional services. In Europe and South America the bar rules were not as developed as in the United States
and therefore did not restrict this expansion.
The accounting firms were initially very successful in creating these alternative businesses. Soon a number
of Big 6 firms had multi-billion dollar technology consulting businesses. Other services were more difficult
to bring in-house. Some, like legal services, demanded a different approach because of ethical
considerations, so law firm networks were established under the umbrella of the Big 6.
The result of this expansion was a backlash by the legal profession, which saw the threat of the accounting
profession subsume the legal profession with its vast resources. The American Bar Association established
committees and taskforces to address the issue, but the problem spread outside of the United States, first to
Europe and then to other countries where lawyers were not protected from this new foreign competition.
There was, however, a fatal flaw in the multidisciplinary concept of the Big 6. The raison d’etre of the Big 6
was to audit pubic companies. Each service provided to an audited client contained an inherent conflict of
interest. This conflict could not have been better illustrated than by the perfect storm created by Enron. The
additional services that Arthur Anderson was offering created a conflict in their role as the auditor.
Multidisciplinary networks by the accounting firms were DOA; the final nail in the coffin was Sarbanes-
Oxley, which meant that the accounting firms had to divest their consulting practices.
169 See DUPONT LEGAL NETWORK, www.dupontlegalmodel.com (last visited Feb. 2, 2016); see also Competitive Advantage Through a Legal
Network: an External Lawyer Review – One Year On, MANAGING PARTNER, Oct. 13, 2003, www.managingpartner.com/feature/business-
strategy/competitive-advantage-through-legal-network-external-lawyer-review-%E2%80%93-one-y.
170 Don G. Rushin et. al,, Building the Virtual Law Firm Through Collaborative Work Teams, ACCA DOCKET, Oct. 2001, kuchlerpolk.com/wp-
content/uploads/2014/03/accadocketarticle.pdf: “Why did DuPont Legal create a virtual law firm? What is the payoff? We believe that significant
competitive advantages flow to a company that can build a team consisting of inside counsel and members of outside law firms and various service
providers, such as accountants, jury consultants, and document management specialists, who have the skill sets required by a legal matter and who are
capable of working smoothly and effectively together. Such a team would be dedicated to the company’s interests and knowledgeable about the
company’s business and case-handling processes. Through shared technology, members of such a team could easily communicate.”
171 See TRUSTLAW, www.trustlaw.org (last visited Feb. 2, 2016).
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Law firm networks are not all organized by law firms; some have been organized by corporations.169 The
DuPont Legal Network,170 for example, was established by the corporation in 1992 to first consolidate its
outside counsel but then to generate internal efficiencies by creating a network to which all of the outside
counsels were members. Additionally, networks can be organized by corporations for other purposes such as
to offer pro bono services. Thomson Reuters171 has organized such a foundation, which selects law firms for
membership that add prestige to its network. It matches experienced firms to work together on projects. The
motivation of the firms is to establish new contacts at no financial cost. By working on pro bono cases, the
firms may make contacts that lead to new paying clients.
Multidisciplinary Networks
The foundation of multidisciplinary practice began when the Big 6 reached their natural growth limits.
Accounting, auditing, and tax could generate only a finite amount of revenue for the Big 6. Their concept
was simple: use the extensive list of clients to market non-traditional accounting services such as legal,
recruitment, risk management, technology, consulting, and more. The objective was to bring these non-
traditional services “in-house” by using the time-tested network model. The Freidheim graphs clearly
illustrate the advantages of the alliances model.
The expansion could easily be financed using revenue from the traditional services. The initial focus was on
the United States, which represented the largest potential market for these services. The non-traditional
services were then expanded outside of the United States using the model that had been so successful with
traditional services. In Europe and South America the bar rules were not as developed as in the United States
and therefore did not restrict this expansion.
The accounting firms were initially very successful in creating these alternative businesses. Soon a number
of Big 6 firms had multi-billion dollar technology consulting businesses. Other services were more difficult
to bring in-house. Some, like legal services, demanded a different approach because of ethical
considerations, so law firm networks were established under the umbrella of the Big 6.
The result of this expansion was a backlash by the legal profession, which saw the threat of the accounting
profession subsume the legal profession with its vast resources. The American Bar Association established
committees and taskforces to address the issue, but the problem spread outside of the United States, first to
Europe and then to other countries where lawyers were not protected from this new foreign competition.
There was, however, a fatal flaw in the multidisciplinary concept of the Big 6. The raison d’etre of the Big 6
was to audit pubic companies. Each service provided to an audited client contained an inherent conflict of
interest. This conflict could not have been better illustrated than by the perfect storm created by Enron. The
additional services that Arthur Anderson was offering created a conflict in their role as the auditor.
Multidisciplinary networks by the accounting firms were DOA; the final nail in the coffin was Sarbanes-
Oxley, which meant that the accounting firms had to divest their consulting practices.
169 See DUPONT LEGAL NETWORK, www.dupontlegalmodel.com (last visited Feb. 2, 2016); see also Competitive Advantage Through a Legal
Network: an External Lawyer Review – One Year On, MANAGING PARTNER, Oct. 13, 2003, www.managingpartner.com/feature/business-
strategy/competitive-advantage-through-legal-network-external-lawyer-review-%E2%80%93-one-y.
170 Don G. Rushin et. al,, Building the Virtual Law Firm Through Collaborative Work Teams, ACCA DOCKET, Oct. 2001, kuchlerpolk.com/wp-
content/uploads/2014/03/accadocketarticle.pdf: “Why did DuPont Legal create a virtual law firm? What is the payoff? We believe that significant
competitive advantages flow to a company that can build a team consisting of inside counsel and members of outside law firms and various service
providers, such as accountants, jury consultants, and document management specialists, who have the skill sets required by a legal matter and who are
capable of working smoothly and effectively together. Such a team would be dedicated to the company’s interests and knowledgeable about the
company’s business and case-handling processes. Through shared technology, members of such a team could easily communicate.”
171 See TRUSTLAW, www.trustlaw.org (last visited Feb. 2, 2016).
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