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Law and Accounting Networks and Associations
Law firm networks are not all organized by law firms; some have been organized by corporations.148 The
DuPont Legal Network,149 for example, was established by the corporation in 1992 to first consolidate its
outside counsel but then to generate internal efficiencies by creating a network to which all of the outside
counsels were members. Additionally, networks can be organized by corporations for other purposes such as
to offer pro bono services. Thomson Reuters150 has organized such a foundation, which selects law firms for
membership that add prestige to its network. It matches experienced firms to work together on projects. The
motivation of the firms is to establish new contacts at no financial cost. By working on pro bono cases, the
firms may make contacts that lead to new paying clients.
Multidisciplinary Networks
The foundation of multidisciplinary practice began when the Big 6 reached their natural growth limits.
Accounting, auditing, and tax could generate only a finite amount of revenue for the Big 6. Their concept was
simple: use the extensive list of clients to market non-traditional accounting services such as legal, recruitment,
risk management, technology, consulting, and more. The objective was to bring these non-traditional services
“in-house” by using the time-tested network model. The Freidheim graphs clearly illustrate the advantages of
the alliances model.
The expansion could easily be financed using revenue from the traditional services. The initial focus was on
the United States, which represented the largest potential market for these services. The non-traditional services
were then expanded outside of the United States using the model that had been so successful with traditional
services. In Europe and South America the bar rules were not as developed as in the United States and therefore
did not restrict this expansion.
The accounting firms were initially very successful in creating these alternative businesses. Soon a number of
Big 6 firms had multi-billion dollar technology consulting businesses. Other services were more difficult to
bring in-house. Some, like legal services, demanded a different approach because of ethical considerations, so
law firm networks were established under the umbrella of the Big 6.
The result of this expansion was a backlash by the legal profession, which saw the threat of the accounting
profession subsume the legal profession with its vast resources. The American Bar Association established
committees and taskforces to address the issue, but the problem spread outside of the United States, first to
Europe and then to other countries where lawyers were not protected from this new foreign competition.
There was, however, a fatal flaw in the multidisciplinary concept of the Big 6. The raison d’etre of the Big 6
was to audit pubic companies. Each service provided to an audited client contained an inherent conflict of
interest. This conflict could not have been better illustrated than by the perfect storm created by Enron. The
additional services that Arthur Anderson was offering created a conflict in their role as the auditor.
Multidisciplinary networks by the accounting firms were DOA; the final nail in the coffin was Sarbanes-Oxley,
which meant that the accounting firms had to divest their consulting practices.
This may not have been the case. PWC has established a 2,400-attorney network covering 75 countries. It has
also recently acquired Booz & Company, a multinational consulting firm, to expand its services. The other Big
4 with BDO have followed suit. The multidisciplinary network model was not dead. If the member firms were
themselves independent, there was no prohibition to having a multidisciplinary network. This was recognized
by the ABA.
148 See DUPONT LEGAL NETWORK, www.dupontlegalmodel.com; see also Competitive Advantage Through a Legal Network: an External Lawyer
Review – One Year On, MANAGING PARTNER (Oct. 13, 2003), www.managingpartner.com/feature/business-strategy/competitive-advantage-through-
legal-network-external-lawyer-review-%E2%80%93-one-y.
20
Law firm networks are not all organized by law firms; some have been organized by corporations.148 The
DuPont Legal Network,149 for example, was established by the corporation in 1992 to first consolidate its
outside counsel but then to generate internal efficiencies by creating a network to which all of the outside
counsels were members. Additionally, networks can be organized by corporations for other purposes such as
to offer pro bono services. Thomson Reuters150 has organized such a foundation, which selects law firms for
membership that add prestige to its network. It matches experienced firms to work together on projects. The
motivation of the firms is to establish new contacts at no financial cost. By working on pro bono cases, the
firms may make contacts that lead to new paying clients.
Multidisciplinary Networks
The foundation of multidisciplinary practice began when the Big 6 reached their natural growth limits.
Accounting, auditing, and tax could generate only a finite amount of revenue for the Big 6. Their concept was
simple: use the extensive list of clients to market non-traditional accounting services such as legal, recruitment,
risk management, technology, consulting, and more. The objective was to bring these non-traditional services
“in-house” by using the time-tested network model. The Freidheim graphs clearly illustrate the advantages of
the alliances model.
The expansion could easily be financed using revenue from the traditional services. The initial focus was on
the United States, which represented the largest potential market for these services. The non-traditional services
were then expanded outside of the United States using the model that had been so successful with traditional
services. In Europe and South America the bar rules were not as developed as in the United States and therefore
did not restrict this expansion.
The accounting firms were initially very successful in creating these alternative businesses. Soon a number of
Big 6 firms had multi-billion dollar technology consulting businesses. Other services were more difficult to
bring in-house. Some, like legal services, demanded a different approach because of ethical considerations, so
law firm networks were established under the umbrella of the Big 6.
The result of this expansion was a backlash by the legal profession, which saw the threat of the accounting
profession subsume the legal profession with its vast resources. The American Bar Association established
committees and taskforces to address the issue, but the problem spread outside of the United States, first to
Europe and then to other countries where lawyers were not protected from this new foreign competition.
There was, however, a fatal flaw in the multidisciplinary concept of the Big 6. The raison d’etre of the Big 6
was to audit pubic companies. Each service provided to an audited client contained an inherent conflict of
interest. This conflict could not have been better illustrated than by the perfect storm created by Enron. The
additional services that Arthur Anderson was offering created a conflict in their role as the auditor.
Multidisciplinary networks by the accounting firms were DOA; the final nail in the coffin was Sarbanes-Oxley,
which meant that the accounting firms had to divest their consulting practices.
This may not have been the case. PWC has established a 2,400-attorney network covering 75 countries. It has
also recently acquired Booz & Company, a multinational consulting firm, to expand its services. The other Big
4 with BDO have followed suit. The multidisciplinary network model was not dead. If the member firms were
themselves independent, there was no prohibition to having a multidisciplinary network. This was recognized
by the ABA.
148 See DUPONT LEGAL NETWORK, www.dupontlegalmodel.com; see also Competitive Advantage Through a Legal Network: an External Lawyer
Review – One Year On, MANAGING PARTNER (Oct. 13, 2003), www.managingpartner.com/feature/business-strategy/competitive-advantage-through-
legal-network-external-lawyer-review-%E2%80%93-one-y.
20
