Page 39 - The Handbook - Legal and Accounting Networks 81
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Law and Accounting Networks and Associations
It is very important to continue to define expectations throughout the process. The reason this is necessary is
that a tremendous amount of energy has built up during the organizing process. All the potential members have
different points of view, having interpreted the network from their own perspectives. The fact is that the
organization is new; during the initial launch period the results may not meet expectations.
A Phase 2 startup in a Level 3 network can last up to two years. It is at this stage that strangers who were not
involved in the organizing process are brought into the organization. New individuals must be viewed from
the perspective that, in several years, they will be the leadership of the network. The organizers must be willing
to begin the process of relinquishing control of their objective to reach a Level 3 network.175
The start-up phase begins with the first official meeting of the members at large. At that meeting the leadership
should be chosen from the organizing committee, as they are the most familiar with the network. The
committee will have a good idea as to others who wish to be active. While activity and interest are two criteria,
another may be the stature of the individuals because the organization will continue to seek new members. A
number of subjective assessments need to be made, such as the terms of office and positions for the organizing
committee.
Phase 3, refinement and enhancement of the network, begins immediately but is generally completed when the
network is able to successfully pass through the first generation of leadership and into the second generation.176
This is important because it is tangible evidence that the network is open to new ideas. If the network can
transition to the new leadership and at the same time expand membership, internal activity, and an external
brand, the network process can truly be called a success.
Organizing Networks – Accounting, Law, Multidisciplinary, and Specialty
Accounting networks are unique because of environmental factors. They are the prime means for U.S. firms
to expand, both nationally and internationally, and to consolidate resources. Additionally, as a result of
regulations, they represent a means to acquire business.177 A review of accounting networks reflects that there
are more than 40 networks. These networks account for approximately 5,000 accounting firms.178 Organizing
a new network would be difficult since the number of firms available is relatively limited and the size of firms
is comparatively small.
There is limited growth potential for any of the networks outside of the Big 4. The firms that compose Grant
Thornton and BDO are very stable. The next largest networks already incorporate some very large regional
members, so they will not be admitting other members for states that they cover with branches.179 Additionally,
because many of the accounting networks originated from one firm,180 there is tension when large firms are
asked to brand themselves under the name of the founding member. The result is that they may form their own
network.
175 Level 2 networks, which may wish to become more sophisticated, remain at Level 2 because the founders will not relinquish or share control.
176 See infra Chapter 5, Governance of Networks and Operations.
177 Executive Director Jon Lisby told the International Accounting Bulletin that Kreston’s plan to be classified a “network” is motivated by a desire to
make firms more cohesive and profitable with the ultimate aim of becoming part of the top 10. “It’s driven by profit,” Lisby explained. “We wanted to
be in a position where our members win more work, can serve more economically and efficiently, and as a consequence make more profit. A[t the]
moment we don’t win enough work because of the differences in perception between an association and a network.” Kreston International Plans to
Become a Top 10 Network, INT’L ACCT. BULL. (Oct. 23, 2009), www.internationalaccountingbulletin.com/news/category/mid-tier/57.
178 See infra Appendix 3
179 See RSM, Praxity, and Baker Tilly networks.
180 Baker Tilly, Moore Stephens, and Russell Bedford International are examples of English firms that expanded internationally by recruiting firms that
would use their name. This creates tension when the larger members firms want to have their own names or a neutral name. This occurred to Moore
Rowland, who saw its members create a new network called Praxity in 2007. See About Us, PRAXITY, www.praxity.com/about-us/Pages/About-Us.aspx;
see also infra Appendix 2, for a list of networks that have neutral names.
27
It is very important to continue to define expectations throughout the process. The reason this is necessary is
that a tremendous amount of energy has built up during the organizing process. All the potential members have
different points of view, having interpreted the network from their own perspectives. The fact is that the
organization is new; during the initial launch period the results may not meet expectations.
A Phase 2 startup in a Level 3 network can last up to two years. It is at this stage that strangers who were not
involved in the organizing process are brought into the organization. New individuals must be viewed from
the perspective that, in several years, they will be the leadership of the network. The organizers must be willing
to begin the process of relinquishing control of their objective to reach a Level 3 network.175
The start-up phase begins with the first official meeting of the members at large. At that meeting the leadership
should be chosen from the organizing committee, as they are the most familiar with the network. The
committee will have a good idea as to others who wish to be active. While activity and interest are two criteria,
another may be the stature of the individuals because the organization will continue to seek new members. A
number of subjective assessments need to be made, such as the terms of office and positions for the organizing
committee.
Phase 3, refinement and enhancement of the network, begins immediately but is generally completed when the
network is able to successfully pass through the first generation of leadership and into the second generation.176
This is important because it is tangible evidence that the network is open to new ideas. If the network can
transition to the new leadership and at the same time expand membership, internal activity, and an external
brand, the network process can truly be called a success.
Organizing Networks – Accounting, Law, Multidisciplinary, and Specialty
Accounting networks are unique because of environmental factors. They are the prime means for U.S. firms
to expand, both nationally and internationally, and to consolidate resources. Additionally, as a result of
regulations, they represent a means to acquire business.177 A review of accounting networks reflects that there
are more than 40 networks. These networks account for approximately 5,000 accounting firms.178 Organizing
a new network would be difficult since the number of firms available is relatively limited and the size of firms
is comparatively small.
There is limited growth potential for any of the networks outside of the Big 4. The firms that compose Grant
Thornton and BDO are very stable. The next largest networks already incorporate some very large regional
members, so they will not be admitting other members for states that they cover with branches.179 Additionally,
because many of the accounting networks originated from one firm,180 there is tension when large firms are
asked to brand themselves under the name of the founding member. The result is that they may form their own
network.
175 Level 2 networks, which may wish to become more sophisticated, remain at Level 2 because the founders will not relinquish or share control.
176 See infra Chapter 5, Governance of Networks and Operations.
177 Executive Director Jon Lisby told the International Accounting Bulletin that Kreston’s plan to be classified a “network” is motivated by a desire to
make firms more cohesive and profitable with the ultimate aim of becoming part of the top 10. “It’s driven by profit,” Lisby explained. “We wanted to
be in a position where our members win more work, can serve more economically and efficiently, and as a consequence make more profit. A[t the]
moment we don’t win enough work because of the differences in perception between an association and a network.” Kreston International Plans to
Become a Top 10 Network, INT’L ACCT. BULL. (Oct. 23, 2009), www.internationalaccountingbulletin.com/news/category/mid-tier/57.
178 See infra Appendix 3
179 See RSM, Praxity, and Baker Tilly networks.
180 Baker Tilly, Moore Stephens, and Russell Bedford International are examples of English firms that expanded internationally by recruiting firms that
would use their name. This creates tension when the larger members firms want to have their own names or a neutral name. This occurred to Moore
Rowland, who saw its members create a new network called Praxity in 2007. See About Us, PRAXITY, www.praxity.com/about-us/Pages/About-Us.aspx;
see also infra Appendix 2, for a list of networks that have neutral names.
27
