Page 95 - The Handbook - Law Firm Networks 2018
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The Handbook: Law Firm Networks
plus billion annually billed by the Big 4. Their model can now be clearly emulated, not only by the
other large networks in accounting, but also the large networks found in the legal profession.
Economics: Establishing and managing offices in different states and countries is expensive and
inefficient. A firm does not need to be physically present and only requires that structural resources
be in place when clients need them. A network can provide structure for which those resources are
instantly available. The cost/benefit ratio of an office versus network membership is simply too high.
A network is the only cost-effective and efficient alternative.
Demographics: Professional services firms reflect the collective attitudes and perspectives of the
professionals. Attitudes and perspective are different for each generation. Boomers and Generation X
have different perspectives.419 Generation Y420 professionals have now entered the accounting and
legal professions. They have grown up with the same hierarchical institutional foundation as earlier
generations, but they entered the Internet age in their teens. They are part of the new open culture
based upon open relationships with diverse groups around the world. In five years, the first
Generation Z professionals will enter the legal and accounting professions. These are professionals
whose lives are now shaped by the Internet and, in particular, Facebook, LinkedIn, and other Internet
tools. They will carry the social network model to the professional services business network. The
outcome is unknown.
Regulations: Regulations of the accounting profession will continue not only to increase but also
diversify in scope. In accounting, the tension between regulation and self-regulation will accelerate
as other countries assert their authority over their companies. Accounting networks working
individually and as organized interest groups can focus on and address these issues. On the other
hand, the legal profession will not be affected to the same degree because the regulatory balance has
already been achieved. It is not possible for one jurisdiction to regulate the practice of law when the
practice is national or global. This balance will mean that legal networks are in an environment
where they can truly maximize their expansion without regulatory concerns.
Technology: Of the six factors, information technology will have the greatest impact on professional
services networks. It cuts across and is an integral component of each of the other factors for the
simple reason that technology has already revolutionized how people interact with one another.
Technology is scalable so that networks of all sizes are in an optimal position to use technology.
Even the smallest members in the most remote jurisdictions are now linked through the network to
meet their specific needs. The technology enhances both the effectiveness and the efficiency of the
services that they provide their clients. Multi-dimensional technology will mean the clients can be
provided cost-effective and individualized services. Networks, as the consolidator of resources, can
provide the technology to all members.
When these developments are factored into the accounting, legal, multidisciplinary, and specialty networks,
certain patterns develop for the future.
Law Firm Networks
Law firm networks have much to learn from the accounting networks, which are years ahead on the
evolutionary scale. The environment for legal networks is much different from that of the accounting
419 Nancy Peppard, Closing the Generation Gap: Managing the Multigenerational Law Firm, 32 L. PRAC. MGMT. 30 (June 2006).
420 Generation Y refers to a generation born between 1980 and 1990. In 2013 this generation would be 23 to 33 years old, representing those who have
graduated or will soon graduate from law and graduate schools. GENERATION Y, en.wikipedia.org/wiki/Generation_Y (last visited Feb. 6, 2016).
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plus billion annually billed by the Big 4. Their model can now be clearly emulated, not only by the
other large networks in accounting, but also the large networks found in the legal profession.
Economics: Establishing and managing offices in different states and countries is expensive and
inefficient. A firm does not need to be physically present and only requires that structural resources
be in place when clients need them. A network can provide structure for which those resources are
instantly available. The cost/benefit ratio of an office versus network membership is simply too high.
A network is the only cost-effective and efficient alternative.
Demographics: Professional services firms reflect the collective attitudes and perspectives of the
professionals. Attitudes and perspective are different for each generation. Boomers and Generation X
have different perspectives.419 Generation Y420 professionals have now entered the accounting and
legal professions. They have grown up with the same hierarchical institutional foundation as earlier
generations, but they entered the Internet age in their teens. They are part of the new open culture
based upon open relationships with diverse groups around the world. In five years, the first
Generation Z professionals will enter the legal and accounting professions. These are professionals
whose lives are now shaped by the Internet and, in particular, Facebook, LinkedIn, and other Internet
tools. They will carry the social network model to the professional services business network. The
outcome is unknown.
Regulations: Regulations of the accounting profession will continue not only to increase but also
diversify in scope. In accounting, the tension between regulation and self-regulation will accelerate
as other countries assert their authority over their companies. Accounting networks working
individually and as organized interest groups can focus on and address these issues. On the other
hand, the legal profession will not be affected to the same degree because the regulatory balance has
already been achieved. It is not possible for one jurisdiction to regulate the practice of law when the
practice is national or global. This balance will mean that legal networks are in an environment
where they can truly maximize their expansion without regulatory concerns.
Technology: Of the six factors, information technology will have the greatest impact on professional
services networks. It cuts across and is an integral component of each of the other factors for the
simple reason that technology has already revolutionized how people interact with one another.
Technology is scalable so that networks of all sizes are in an optimal position to use technology.
Even the smallest members in the most remote jurisdictions are now linked through the network to
meet their specific needs. The technology enhances both the effectiveness and the efficiency of the
services that they provide their clients. Multi-dimensional technology will mean the clients can be
provided cost-effective and individualized services. Networks, as the consolidator of resources, can
provide the technology to all members.
When these developments are factored into the accounting, legal, multidisciplinary, and specialty networks,
certain patterns develop for the future.
Law Firm Networks
Law firm networks have much to learn from the accounting networks, which are years ahead on the
evolutionary scale. The environment for legal networks is much different from that of the accounting
419 Nancy Peppard, Closing the Generation Gap: Managing the Multigenerational Law Firm, 32 L. PRAC. MGMT. 30 (June 2006).
420 Generation Y refers to a generation born between 1980 and 1990. In 2013 this generation would be 23 to 33 years old, representing those who have
graduated or will soon graduate from law and graduate schools. GENERATION Y, en.wikipedia.org/wiki/Generation_Y (last visited Feb. 6, 2016).
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