Page 63 - The Handbook - Law Firm Networks 2018
P. 63
The Handbook: Law Firm Networks
get to know each other. They become friends. The structure in place reinforces and accelerates the benefits
that have been accumulated.
These relationships will affect all of the operational considerations above. The organization may find that it
cannot adapt to the new marketplace. For example, networks are not particularly suited to adopting new
technology. The reason may be that the members and the network leaders are practicing professionals who
are simply not aware of the changes that have taken place. Generational changes will affect the members and
the network itself.
On the other hand, the same benefits in the mature organization can act to limit the growth of the network.
For example, leadership may become entrenched, making it difficult for others to participate. Members may
lose interest because their expectations have not been met. The direction of the network may have adjusted to
external environmental factors, like changes in the economy. New technology may require investment for
which the network is not prepared. The most significant are the human factors as they affect the network.
This section will address some of these changes that are observed as the network matures.
Both the positive and the negative flow from the fact that the overall success of the network, as seen by the
members themselves, does not come from tools, regulations, bylaws, or technology but from the way
members are able to interact with each other to their level of satisfaction. In a mature network the particular
characteristics of the participants stand out.
Other Issues – Theory and Literature:
Sociologists argue that social patterns of human interaction transcend reductionist
(simple) 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.”290
Organizations are and always will be run by people. They are infused with purpose and
meaning only through the imagination and will of people...291 As teams of self-interested
agents, networks broadly suffer from incentive problems with respect to surplus or
“public goods” jointly created but individually consumed. Teams confront an
organizational version of the “tragedy of the commons.” Members have an incentive to
overstate their private preferences when a good is provided from common resources but
to understate their private preferences when asked to ante up their share of costs.
Networks are particularly susceptible to this problem as network members have an
incentive to minimize their own efforts while free riding on the efforts of others.292
A prime hazard of team organization is that individual team members tend to overvalue
their own contribution relative to other members.293 Many refuse to subordinate their
interests to the interests of the community and the distribution of authority in networks
affords them the ability to act on their own behalf. At times of resource scarcity,
individuals will also tend to hoard resources making them unavailable for more desirable
290 Van Alstyne, supra note 9, citing M. Granovetter, Problems of Explanation in Economic Sociology, in NETWORKS AND ORGS. 471-491 (N. Nohria
& R. G. Eccles, Eds. 1993).
291 Id., citing P. R. LAWRENCE & J.W. LORSCH, ORGANIZATION AND ENVIRONMENT (1967).
292 Id., citing E. Roberts, New Ventures for Corporate Growth. 58 HARV. BUS. REV. 124-132 (1980).
293 Id., citing Symposium, Adaptation Processes in Team Decision Making and Coordination, IEEE SYMPOSIUM ON SYSTEMS, MAN, AND
CYBERNETICS (1990).
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get to know each other. They become friends. The structure in place reinforces and accelerates the benefits
that have been accumulated.
These relationships will affect all of the operational considerations above. The organization may find that it
cannot adapt to the new marketplace. For example, networks are not particularly suited to adopting new
technology. The reason may be that the members and the network leaders are practicing professionals who
are simply not aware of the changes that have taken place. Generational changes will affect the members and
the network itself.
On the other hand, the same benefits in the mature organization can act to limit the growth of the network.
For example, leadership may become entrenched, making it difficult for others to participate. Members may
lose interest because their expectations have not been met. The direction of the network may have adjusted to
external environmental factors, like changes in the economy. New technology may require investment for
which the network is not prepared. The most significant are the human factors as they affect the network.
This section will address some of these changes that are observed as the network matures.
Both the positive and the negative flow from the fact that the overall success of the network, as seen by the
members themselves, does not come from tools, regulations, bylaws, or technology but from the way
members are able to interact with each other to their level of satisfaction. In a mature network the particular
characteristics of the participants stand out.
Other Issues – Theory and Literature:
Sociologists argue that social patterns of human interaction transcend reductionist
(simple) 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.”290
Organizations are and always will be run by people. They are infused with purpose and
meaning only through the imagination and will of people...291 As teams of self-interested
agents, networks broadly suffer from incentive problems with respect to surplus or
“public goods” jointly created but individually consumed. Teams confront an
organizational version of the “tragedy of the commons.” Members have an incentive to
overstate their private preferences when a good is provided from common resources but
to understate their private preferences when asked to ante up their share of costs.
Networks are particularly susceptible to this problem as network members have an
incentive to minimize their own efforts while free riding on the efforts of others.292
A prime hazard of team organization is that individual team members tend to overvalue
their own contribution relative to other members.293 Many refuse to subordinate their
interests to the interests of the community and the distribution of authority in networks
affords them the ability to act on their own behalf. At times of resource scarcity,
individuals will also tend to hoard resources making them unavailable for more desirable
290 Van Alstyne, supra note 9, citing M. Granovetter, Problems of Explanation in Economic Sociology, in NETWORKS AND ORGS. 471-491 (N. Nohria
& R. G. Eccles, Eds. 1993).
291 Id., citing P. R. LAWRENCE & J.W. LORSCH, ORGANIZATION AND ENVIRONMENT (1967).
292 Id., citing E. Roberts, New Ventures for Corporate Growth. 58 HARV. BUS. REV. 124-132 (1980).
293 Id., citing Symposium, Adaptation Processes in Team Decision Making and Coordination, IEEE SYMPOSIUM ON SYSTEMS, MAN, AND
CYBERNETICS (1990).
- 50 -
