Page 22 - The Handbook - Legal and Accounting Networks 81
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Law and Accounting Networks and Associations
Level 1 Level 2 Level 3 Level 4
Event sponsorships No No Some small events Yes – golf, auto races,
etc.
Research grants No No No Yes
Awards to non- No No Some – student writing Yes
members No contests, pro bono
Trade publication No No Yes Yes
advertising No
Business magazine No No No Yes
advertising
Television No No Yes
advertising
Foundation No Some Yes
It is, however, very important to note that the models are equal in one sense: They reflect the needs of each
member at any given time. A small Level 2 network can be just as successful as a Level 4 if it meets the needs
and expectations of its members and a more sophisticated model is not needed or desired. A higher-level
network that does not meet expectations will not be successful simply because of its higher level.
The Disclaimer – the DNA of a Network
A Level 3 or 4 network is a legal entity in which independent law firms seek to demonstrate to clients their
relationships with other firms in order to provide services. This is important because the entity itself does not
provide legal services. This requires that the member firms either demonstrate adherence to common standards
or create the impression that they operate as one entity under a common brand. There is inherent tension
between the marketing of the relationships and the need to maintain independence so as not to incur vicarious
liability or violate ethics rules.62 Operational independence means that the network must be able to define the
relationships among members in terms of their common interests. The networks can easily blur their
relationships.
How does one recognize a network? Every network from PWC to Lex Mundi uses a “network disclaimer.”
The legal profession’s new Swiss associations also each have a disclaimer even though they profess to be law
firms. The network disclaimer of PWC63 states that the network members are independent firms that do not
practice jointly and are not responsible for the negligence of another member. It further states that the network
does not practice a profession or otherwise provide services to clients of the network’s members. From the
concept of independence found in the disclaimer, the foundation of both network operations and governance
is laid.
These legal disclaimers found on a website may be in contrast to marketing efforts that leave the impression
or seek to demonstrate uniform standards of brand quality. In the accounting profession, this duality has led to
the regulatory distinction between networks and associations.64 In the legal profession, the term “network” has
no statutory definition. This can lead to the confusion between what law firms are and what networks are. For
example, Lex Mundi and TerraLex are clearly recognized as networks. Clifford Chance, Jones Day,65 or
Morrison & Forester are law firms in which the partners share profits, expenses, and liabilities. There is no
disclaimer.
62 See infra Chapter 8, Networks and the Technology Revolution.
63 “‘PricewaterhouseCoopers’ and ‘PwC’ refer to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL). Each
member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients.
PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or
bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of
another member firm's professional judgment or bind another member firm or PwCIL in any way.” PWC SOUTH AFRICA,
www.pwc.co.za/en/index.jhtml.
64 See infra Chapter 7, Regulations and Other Legal Considerations for Networks.
65 The Value of a True Partnership, JONES DAY, www.jonesday.com/atruepartnership/.
10
Level 1 Level 2 Level 3 Level 4
Event sponsorships No No Some small events Yes – golf, auto races,
etc.
Research grants No No No Yes
Awards to non- No No Some – student writing Yes
members No contests, pro bono
Trade publication No No Yes Yes
advertising No
Business magazine No No No Yes
advertising
Television No No Yes
advertising
Foundation No Some Yes
It is, however, very important to note that the models are equal in one sense: They reflect the needs of each
member at any given time. A small Level 2 network can be just as successful as a Level 4 if it meets the needs
and expectations of its members and a more sophisticated model is not needed or desired. A higher-level
network that does not meet expectations will not be successful simply because of its higher level.
The Disclaimer – the DNA of a Network
A Level 3 or 4 network is a legal entity in which independent law firms seek to demonstrate to clients their
relationships with other firms in order to provide services. This is important because the entity itself does not
provide legal services. This requires that the member firms either demonstrate adherence to common standards
or create the impression that they operate as one entity under a common brand. There is inherent tension
between the marketing of the relationships and the need to maintain independence so as not to incur vicarious
liability or violate ethics rules.62 Operational independence means that the network must be able to define the
relationships among members in terms of their common interests. The networks can easily blur their
relationships.
How does one recognize a network? Every network from PWC to Lex Mundi uses a “network disclaimer.”
The legal profession’s new Swiss associations also each have a disclaimer even though they profess to be law
firms. The network disclaimer of PWC63 states that the network members are independent firms that do not
practice jointly and are not responsible for the negligence of another member. It further states that the network
does not practice a profession or otherwise provide services to clients of the network’s members. From the
concept of independence found in the disclaimer, the foundation of both network operations and governance
is laid.
These legal disclaimers found on a website may be in contrast to marketing efforts that leave the impression
or seek to demonstrate uniform standards of brand quality. In the accounting profession, this duality has led to
the regulatory distinction between networks and associations.64 In the legal profession, the term “network” has
no statutory definition. This can lead to the confusion between what law firms are and what networks are. For
example, Lex Mundi and TerraLex are clearly recognized as networks. Clifford Chance, Jones Day,65 or
Morrison & Forester are law firms in which the partners share profits, expenses, and liabilities. There is no
disclaimer.
62 See infra Chapter 8, Networks and the Technology Revolution.
63 “‘PricewaterhouseCoopers’ and ‘PwC’ refer to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL). Each
member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients.
PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or
bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of
another member firm's professional judgment or bind another member firm or PwCIL in any way.” PWC SOUTH AFRICA,
www.pwc.co.za/en/index.jhtml.
64 See infra Chapter 7, Regulations and Other Legal Considerations for Networks.
65 The Value of a True Partnership, JONES DAY, www.jonesday.com/atruepartnership/.
10
