Page 36 - The Handbook - Law Firm Networks 2018
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The Handbook: Law Firm Networks
Chapter 4 – Organizing a Traditional Law Firm Network
Traditional law firm networks were organized out of the self-interests of the organizers to acquire resources
and contacts.177 They were first established by firms and companies based upon their needs to serve clients or
be competitive.178 Ultimately all networks began with individuals who saw the benefits of the model and
pushed forward. These individuals saw a common need that was not being fulfilled by their existing
organizations. Alternatively, they were not able to participate in other organizations, so they sought to
develop new ones. Others did not see joining an existing organization as being interesting. The result is 44
accounting networks and 170 legal and multidisciplinary professional services networks.
Organizing a successful network is a challenge. It is a complex mixture of professionals, self-interests,
cultures, competitive pressures, finances, and other considerations. Whether a network is actually successful
will usually not be determined until five to six years after the process of organizing a network has started.
This section will begin with an evaluation of the fundamentals of establishing a network. The second part
will review how accounting, legal, multidisciplinary, and specialty networks have been established.
Why Form a Network Rather Than a Hierarchical Corporation?
Networks are formed in response to perceived needs of those organizing them. There are three types of
primary categories: first mover networks, second mover networks, and followers (i.e., we did not take the
opportunity to join a network, so now we have to create our own).
The first mover networks are established when a specific need cannot be fulfilled by an existing network and
generally can be traced to one individual. For example, Meritas179 was started by Leon Steinberg, who saw
the need for mid-size firms to have a network. In accounting, the first movers were the Big 4. In the legal
profession, the first movers were the Club de Abogados,180 Interlaw,181 and ALFA International.182
The first mover has certain advantages; it also has disadvantages that make organizing the network more
difficult. The advantage is one of green fields, as first movers can select whomever they like. Other
advantages include that the expectations of members are lower; they can be more innovative because the
concept is new.
There are disadvantages, one of them being that there are no models from which to draw examples. It may be
difficult to describe the network and how it operates. First movers may not see all of the parts of the
association’s potential. They can be locked into a format that does not reflect the full effectiveness of the
system. The first mover may adopt a form of corporate governance that does not permit succession.
177 REDEJUR, www.redejur.com.br/en/historia.php (last visited Feb. 2, 2016; see this for a description of the process of organizing a network).
178 Network organizations can evolve out of personal or small group ties: “Many of the arrangements ... commonly found in the publishing, fashion,
computer software, construction, and entertainment businesses, are among individuals, independent production teams, or very small business units.”
Citing Powell, supra note 35; see also Walter W. Powell, Neither Market Nor Hierarchy: Network Forms of Organizations, 12 RES. IN ORG.
BEHAVIOR 295, 293-330 (1990).
179 See MERITAS, www.meritas.org (last visited Feb. 2, 2016); see also James Swift, Well Connected – Network and Associations, THE LAWYER, Sept.
13, 2010, at 25.
180 See CLUB DE ABOGADOS, www.clubdeabogadosibero.com (last visited Feb. 2, 2016).
181 See INTERLAW, www.interlaw.org (last visited Feb. 2, 2016).
182 ALFA INTERNATIONAL, supra note 131.
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Chapter 4 – Organizing a Traditional Law Firm Network
Traditional law firm networks were organized out of the self-interests of the organizers to acquire resources
and contacts.177 They were first established by firms and companies based upon their needs to serve clients or
be competitive.178 Ultimately all networks began with individuals who saw the benefits of the model and
pushed forward. These individuals saw a common need that was not being fulfilled by their existing
organizations. Alternatively, they were not able to participate in other organizations, so they sought to
develop new ones. Others did not see joining an existing organization as being interesting. The result is 44
accounting networks and 170 legal and multidisciplinary professional services networks.
Organizing a successful network is a challenge. It is a complex mixture of professionals, self-interests,
cultures, competitive pressures, finances, and other considerations. Whether a network is actually successful
will usually not be determined until five to six years after the process of organizing a network has started.
This section will begin with an evaluation of the fundamentals of establishing a network. The second part
will review how accounting, legal, multidisciplinary, and specialty networks have been established.
Why Form a Network Rather Than a Hierarchical Corporation?
Networks are formed in response to perceived needs of those organizing them. There are three types of
primary categories: first mover networks, second mover networks, and followers (i.e., we did not take the
opportunity to join a network, so now we have to create our own).
The first mover networks are established when a specific need cannot be fulfilled by an existing network and
generally can be traced to one individual. For example, Meritas179 was started by Leon Steinberg, who saw
the need for mid-size firms to have a network. In accounting, the first movers were the Big 4. In the legal
profession, the first movers were the Club de Abogados,180 Interlaw,181 and ALFA International.182
The first mover has certain advantages; it also has disadvantages that make organizing the network more
difficult. The advantage is one of green fields, as first movers can select whomever they like. Other
advantages include that the expectations of members are lower; they can be more innovative because the
concept is new.
There are disadvantages, one of them being that there are no models from which to draw examples. It may be
difficult to describe the network and how it operates. First movers may not see all of the parts of the
association’s potential. They can be locked into a format that does not reflect the full effectiveness of the
system. The first mover may adopt a form of corporate governance that does not permit succession.
177 REDEJUR, www.redejur.com.br/en/historia.php (last visited Feb. 2, 2016; see this for a description of the process of organizing a network).
178 Network organizations can evolve out of personal or small group ties: “Many of the arrangements ... commonly found in the publishing, fashion,
computer software, construction, and entertainment businesses, are among individuals, independent production teams, or very small business units.”
Citing Powell, supra note 35; see also Walter W. Powell, Neither Market Nor Hierarchy: Network Forms of Organizations, 12 RES. IN ORG.
BEHAVIOR 295, 293-330 (1990).
179 See MERITAS, www.meritas.org (last visited Feb. 2, 2016); see also James Swift, Well Connected – Network and Associations, THE LAWYER, Sept.
13, 2010, at 25.
180 See CLUB DE ABOGADOS, www.clubdeabogadosibero.com (last visited Feb. 2, 2016).
181 See INTERLAW, www.interlaw.org (last visited Feb. 2, 2016).
182 ALFA INTERNATIONAL, supra note 131.
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