Page 13 - The Handbook - Legal and Accounting Networks 81
P. 13
Chapter 1 – Law and Accounting Firm Networks and ALSPs
What is a Network?
All businesses represent a pool of financial and human capital that Figure 1 Video Chapter 1
creates a product or performs a service. This capital can be configured
in an unlimited number of ways to achieve specific objectives for the
service provider or manufacturer. In international professional
services, the traditional delivery methods are operations by means of
a controlled entity or membership in an association of independent
service providers. These associations are commonly referred to as
“professional services networks.” Law firm networks are one type of
professional services networks.
Professional service networks are primarily found in accounting and law. They may also be found in
investment banking, insurance, real estate, and architectural services. Every profession that operates locally
but has clients in multiple locations is a potential profession for a network. This book will focus on legal,
accounting, multidisciplinary, and specialty practice networks. Today, members of these networks employ
more than one million professionals and staff, and have annual gross revenues that exceed $200 billion. In the
legal profession revenues approach $60 billion U.S. dollars.
In order to provide a broad perspective, the networks discussed will include well-known accounting networks
like the Big 4. This will allow comparisons with the better-known law firm and multidisciplinary networks,
such as Lex Mundi, World Services Group, TerraLex, and Meritas. Lastly, the Swiss association – verein –
will be discussed, as it is used by seven firms to offer global legal practice through independent firms. In sum,
all of the 170-plus existing law firm networks and associations will be evaluated.
The purpose of this book is to provide a broad overview of legal and accounting networks and associations in
2019. It begins with their history. Reviewing how networks are organized provides insight as to how they are
governed and operate. This begins with research and is illustrated by numerous examples in both law and
accounting. In order for a network to be effective, it must develop an inter-network brand for its members.
External branding can be equally important. Operations, governance, and branding have legal and regulatory
consequences that must be evaluated. Networks are affected by other externalities, such as regulations,
economic conditions, and technology. All have ramifications. Finally, the book predicts the future of law and
accounting firm networks as the world changes even more.
Networks models are much more subjective than objective. While there may be different levels and
management structures, their commonality is that they are sui generis. Each network model is unique, formed
for different reasons, and there are various motivations. It does not matter whether they are a club of friends
or a sophisticated organization with an intricate management structure. The members and potential members
are attracted to structures in which they can pursue their own individual objectives under an umbrella. While
networks clearly do have things in common, each must be viewed in its own unique context. A successful
network is one that meets the expectations of all of its members.
Network organizations are defined by elements of purpose, structure, and process.12 The purpose of a network
is different than that of a company or professional firm in that it is limited to specific activities that will benefit
12 M. Van Alstyne, The State of Network Organizations: A Survey of Three Frameworks, J. OF ORG. COMPUTING (1997). “Sociologists argue that social
patterns of human interaction transcend reductionist 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,’” citing Granovetter, Problems of Explanation in Economic Sociology, in NETWORKS AND ORGS. 471-490 (N. Nohria & R. G. Eccles,
Eds.).
1
What is a Network?
All businesses represent a pool of financial and human capital that Figure 1 Video Chapter 1
creates a product or performs a service. This capital can be configured
in an unlimited number of ways to achieve specific objectives for the
service provider or manufacturer. In international professional
services, the traditional delivery methods are operations by means of
a controlled entity or membership in an association of independent
service providers. These associations are commonly referred to as
“professional services networks.” Law firm networks are one type of
professional services networks.
Professional service networks are primarily found in accounting and law. They may also be found in
investment banking, insurance, real estate, and architectural services. Every profession that operates locally
but has clients in multiple locations is a potential profession for a network. This book will focus on legal,
accounting, multidisciplinary, and specialty practice networks. Today, members of these networks employ
more than one million professionals and staff, and have annual gross revenues that exceed $200 billion. In the
legal profession revenues approach $60 billion U.S. dollars.
In order to provide a broad perspective, the networks discussed will include well-known accounting networks
like the Big 4. This will allow comparisons with the better-known law firm and multidisciplinary networks,
such as Lex Mundi, World Services Group, TerraLex, and Meritas. Lastly, the Swiss association – verein –
will be discussed, as it is used by seven firms to offer global legal practice through independent firms. In sum,
all of the 170-plus existing law firm networks and associations will be evaluated.
The purpose of this book is to provide a broad overview of legal and accounting networks and associations in
2019. It begins with their history. Reviewing how networks are organized provides insight as to how they are
governed and operate. This begins with research and is illustrated by numerous examples in both law and
accounting. In order for a network to be effective, it must develop an inter-network brand for its members.
External branding can be equally important. Operations, governance, and branding have legal and regulatory
consequences that must be evaluated. Networks are affected by other externalities, such as regulations,
economic conditions, and technology. All have ramifications. Finally, the book predicts the future of law and
accounting firm networks as the world changes even more.
Networks models are much more subjective than objective. While there may be different levels and
management structures, their commonality is that they are sui generis. Each network model is unique, formed
for different reasons, and there are various motivations. It does not matter whether they are a club of friends
or a sophisticated organization with an intricate management structure. The members and potential members
are attracted to structures in which they can pursue their own individual objectives under an umbrella. While
networks clearly do have things in common, each must be viewed in its own unique context. A successful
network is one that meets the expectations of all of its members.
Network organizations are defined by elements of purpose, structure, and process.12 The purpose of a network
is different than that of a company or professional firm in that it is limited to specific activities that will benefit
12 M. Van Alstyne, The State of Network Organizations: A Survey of Three Frameworks, J. OF ORG. COMPUTING (1997). “Sociologists argue that social
patterns of human interaction transcend reductionist 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,’” citing Granovetter, Problems of Explanation in Economic Sociology, in NETWORKS AND ORGS. 471-490 (N. Nohria & R. G. Eccles,
Eds.).
1
