Page 62 - The Handbook - Law Firm Networks 2018
P. 62
The Handbook: Law Firm Networks
have to refer business. They are neither international, nor are they opening branches outside of what they
consider their region. The network is the way they can demonstrate their international connections. They
must use one another in audits. Accounting networks are also more exclusive than law firm networks in that,
in many cases, the member firms have adopted either the name or a part of the name of the network. The
referral fee payments cement the relationships so they do not refer outside of their network.
However, there are other factors that may reduce the number of referrals among accounting firms. In the
United States, accounting and legal firms will not have the same number of referrals. Unlike attorneys,
accountants can practice in any state. Tax work is also federal; state taxes are relatively standard following
some specific patterns.
Given the concentration of the Big 4, which accounts for 94 percent of public companies followed by Grant
Thornton International and BDO International,284 a mid-size accounting firm’s typical client is a mid-size or
privately held company. Fortunately there are hundreds of thousands of mid-size companies that are now part
of the global economy. This has created a growing need for network membership. However, the rules on
auditing public companies are being reevaluated to require that auditing assignments rotate outside of the Big
4 to independent accounting firms.285
Operations – Other Network Initiatives.
Foundations are a means to market the network by extending its image. The TAG Foundation286 is a good
example of a basic foundation. Its purpose, “[w]ith advice and counsel from a committee of advisors and
from members in affected areas of the world, will provide aid to local charities around the world, most often
in response to natural or other disasters.” The Lex Mundi foundation287 is a more complex foundation with
significant funds to invest. One professional developed the foundation; it now has its own board. Donors
included not only members of Lex Mundi but attorneys at member firms. The donors have been extended to
major corporations. The foundation allows Lex Mundi to reach out to organizations on pro bono projects.
These projects can extend to virtually every state or country. By undertaking these projects the foundation
and Lex Mundi increase its image using tax-free dollars. Members gain good publicity in the local press and
may even be compensated for out-of-pocket costs.
Networks may have common interests with other organizations. These organizations can work together for
their mutual benefit. For example, Lex Mundi had a project with ACC that has 20,000 in-house counsels as
members. ACC wanted to expand this membership in each city. Lex Mundi undertook to hold a CLE
meeting to which non-ACC members were invited. ACC benefited because the Lex Mundi members
absorbed the costs. Lex Mundi and the local members benefited by being able to contact non-clients in the
form of the CLE. This type of project has been extended to podcasts.288
Balance in a Maturing Network – Issues in Governance and Operations
As a network matures, it changes. The changes reflect the sum total of its development from the beginning to
the present. The mature organization has defined and refined its objectives. On the positive side, members
284 FERF Survey: Audit Fees Down, Big 4 Still Dominate Public Company Filers, GOING CONCERN,
goingconcern.com/2010/06/ferf-survey-audit-fees-down-big-4-still-dominate-public-company-filers/ (last visited Feb. 4,
2016).
285 See infra Chapter 6, Marketing the Network – Creating the Brand.
286 TAGLAW, supra note 146.
287 LEX MUNDI PRO BONO FOUNDATION, www.lexmundiprobono.org/lexmundiprobono/default.asp (last visited Feb. 4, 2016).
288 See infra Chapter 7, Regulations and Other Legal Considerations for Networks; see also Lex Learn, LEX MUNDI,
www.lexlearn.com/lmln/default.asp (last visited Feb. 4, 2016) (which offers CLE podcasts).
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have to refer business. They are neither international, nor are they opening branches outside of what they
consider their region. The network is the way they can demonstrate their international connections. They
must use one another in audits. Accounting networks are also more exclusive than law firm networks in that,
in many cases, the member firms have adopted either the name or a part of the name of the network. The
referral fee payments cement the relationships so they do not refer outside of their network.
However, there are other factors that may reduce the number of referrals among accounting firms. In the
United States, accounting and legal firms will not have the same number of referrals. Unlike attorneys,
accountants can practice in any state. Tax work is also federal; state taxes are relatively standard following
some specific patterns.
Given the concentration of the Big 4, which accounts for 94 percent of public companies followed by Grant
Thornton International and BDO International,284 a mid-size accounting firm’s typical client is a mid-size or
privately held company. Fortunately there are hundreds of thousands of mid-size companies that are now part
of the global economy. This has created a growing need for network membership. However, the rules on
auditing public companies are being reevaluated to require that auditing assignments rotate outside of the Big
4 to independent accounting firms.285
Operations – Other Network Initiatives.
Foundations are a means to market the network by extending its image. The TAG Foundation286 is a good
example of a basic foundation. Its purpose, “[w]ith advice and counsel from a committee of advisors and
from members in affected areas of the world, will provide aid to local charities around the world, most often
in response to natural or other disasters.” The Lex Mundi foundation287 is a more complex foundation with
significant funds to invest. One professional developed the foundation; it now has its own board. Donors
included not only members of Lex Mundi but attorneys at member firms. The donors have been extended to
major corporations. The foundation allows Lex Mundi to reach out to organizations on pro bono projects.
These projects can extend to virtually every state or country. By undertaking these projects the foundation
and Lex Mundi increase its image using tax-free dollars. Members gain good publicity in the local press and
may even be compensated for out-of-pocket costs.
Networks may have common interests with other organizations. These organizations can work together for
their mutual benefit. For example, Lex Mundi had a project with ACC that has 20,000 in-house counsels as
members. ACC wanted to expand this membership in each city. Lex Mundi undertook to hold a CLE
meeting to which non-ACC members were invited. ACC benefited because the Lex Mundi members
absorbed the costs. Lex Mundi and the local members benefited by being able to contact non-clients in the
form of the CLE. This type of project has been extended to podcasts.288
Balance in a Maturing Network – Issues in Governance and Operations
As a network matures, it changes. The changes reflect the sum total of its development from the beginning to
the present. The mature organization has defined and refined its objectives. On the positive side, members
284 FERF Survey: Audit Fees Down, Big 4 Still Dominate Public Company Filers, GOING CONCERN,
goingconcern.com/2010/06/ferf-survey-audit-fees-down-big-4-still-dominate-public-company-filers/ (last visited Feb. 4,
2016).
285 See infra Chapter 6, Marketing the Network – Creating the Brand.
286 TAGLAW, supra note 146.
287 LEX MUNDI PRO BONO FOUNDATION, www.lexmundiprobono.org/lexmundiprobono/default.asp (last visited Feb. 4, 2016).
288 See infra Chapter 7, Regulations and Other Legal Considerations for Networks; see also Lex Learn, LEX MUNDI,
www.lexlearn.com/lmln/default.asp (last visited Feb. 4, 2016) (which offers CLE podcasts).
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