Page 89 - MASTER COPY LEADERS BOOK 9editedJKK (24)_Neat
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Leaders in Legal Business
Why Do Firms Join?
When asked why they joined, members usually stated tangible reasons: to receive referrals from other
members, to have reliable firms to which they can refer, to maintain independence, to meet clients’ needs, to retain
existing clients by being able to provide services in other states or countries, and to use the membership to obtain
new clients in their market.
They also join for intangible reasons. In today’s world, change is both constant and accelerating.
Therefore, having access to other members can be important. A network helps to reduce the degree of uncertainty
by bringing together a greater number of specialized resources to work on a problem. In addition to facilitating
the exchange of knowledge that can reduce risks in firm operations, network memberships also reduce possible
loss through burden sharing. Membership is a proactive way to profit from change and, at the same time, conserve
resources. Membership can enhance the prestige of the member by being associated with prestigious firms that
the client already uses.
Networks achieve these objectives in a way that is very different from corporate structures in which
executives have command and control. Networks emphasize reputations, commitments, and trust of each
member.3 In networks, there is collaboration between members and the network’s staff. Personal motivations
move the network development forward.4 However, personal motivations can also impede forward momentum.
Law Firm Networks - History
There were two distinct and different reasons for networks developing in the legal profession. The first
was internationalization, which became globalization.5 Law firms simply needed international connections. The
second was the expansion of a number of large United States firms who pushed to become “national.” Smaller
firms or firms with a niche practice required this same expertise in other states.
Internationalization of the legal profession began much later than in accounting firms.6 There was no real
need because, unlike the accounting firms that conducted worldwide audits, law firms in each country were
equipped to deal with client matters. This changed in 1949 when Baker & McKenzie began to expand to non-
United States markets to assist U.S. clients trying to expand overseas following WWII.7 The first step was
establishing correspondent relationships with firms outside of the United States. This was necessary in that many
countries would not permit a law firm to operate without a local name.8
One of the major factors influencing the need for networks is the globalization of the economy. Supply
and demand are no longer local. The price of commodities is affected by the weather halfway across the world or
by demand in developing countries. Production takes place wherever the assets and human resources can most
effectively deploy. Professional services providers must be able to reach out globally to represent their clients.
Networks are the only practical method to accomplish these objectives.
3 Building the Virtual Law Firm Through Collaborative Work Teams, DUPONT LEGAL MODEL, http://www.dupontlegalmodel.com/building-the-virtual-law-
firm-through-collaborative-work-teams/.
4 See ADAM SMITH, THE WEALTH OF NATIONS (1776) (“Man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it
from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favor, and show them that it is for their own advantage
to do for him what he requires of them … It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their
regard to their own interest.”).
5 James R. Faulconbridge, et. al., Global Law Firms: Globalization and Organizational Spaces of Cross-Border Legal Work, 28 NW. J. INT’L L. & BUS.
455 (2008).
6 Richard L. Abel, Transnational Law Practice, 44 CASE W. RES. L. REV. 737 (1994).
7 HISTORY OF BAKER & MCKENZIE, http://www.bakermckenzie.com/firmfacts/firmhistory/ (last visited May 3, 2015); JOHN R. BAUMAN, PIONEERING A
GLOBAL VISION: THE STORY OF BAKER & MCKENZIE (1999).
8 This rule still applies in a number of countries like Brazil where the Baker McKenzie members uses it own name and is association with the firm. See
Keep Out – Brazilian Lawyers Do Not Want Pesky Foreigners Poaching Their Clients, THE ECONOMIST (June 23, 2011), available at
http://www.economist.com/node/18867851?story_id=18867851&fsrc=rss. The same applies to India. See Ashurst Seals Best-Friends Deal with India Law
Partners, THE LAWYER (July 15, 2011), available at http://www.thelawyer.com/1008640.article.
82
Why Do Firms Join?
When asked why they joined, members usually stated tangible reasons: to receive referrals from other
members, to have reliable firms to which they can refer, to maintain independence, to meet clients’ needs, to retain
existing clients by being able to provide services in other states or countries, and to use the membership to obtain
new clients in their market.
They also join for intangible reasons. In today’s world, change is both constant and accelerating.
Therefore, having access to other members can be important. A network helps to reduce the degree of uncertainty
by bringing together a greater number of specialized resources to work on a problem. In addition to facilitating
the exchange of knowledge that can reduce risks in firm operations, network memberships also reduce possible
loss through burden sharing. Membership is a proactive way to profit from change and, at the same time, conserve
resources. Membership can enhance the prestige of the member by being associated with prestigious firms that
the client already uses.
Networks achieve these objectives in a way that is very different from corporate structures in which
executives have command and control. Networks emphasize reputations, commitments, and trust of each
member.3 In networks, there is collaboration between members and the network’s staff. Personal motivations
move the network development forward.4 However, personal motivations can also impede forward momentum.
Law Firm Networks - History
There were two distinct and different reasons for networks developing in the legal profession. The first
was internationalization, which became globalization.5 Law firms simply needed international connections. The
second was the expansion of a number of large United States firms who pushed to become “national.” Smaller
firms or firms with a niche practice required this same expertise in other states.
Internationalization of the legal profession began much later than in accounting firms.6 There was no real
need because, unlike the accounting firms that conducted worldwide audits, law firms in each country were
equipped to deal with client matters. This changed in 1949 when Baker & McKenzie began to expand to non-
United States markets to assist U.S. clients trying to expand overseas following WWII.7 The first step was
establishing correspondent relationships with firms outside of the United States. This was necessary in that many
countries would not permit a law firm to operate without a local name.8
One of the major factors influencing the need for networks is the globalization of the economy. Supply
and demand are no longer local. The price of commodities is affected by the weather halfway across the world or
by demand in developing countries. Production takes place wherever the assets and human resources can most
effectively deploy. Professional services providers must be able to reach out globally to represent their clients.
Networks are the only practical method to accomplish these objectives.
3 Building the Virtual Law Firm Through Collaborative Work Teams, DUPONT LEGAL MODEL, http://www.dupontlegalmodel.com/building-the-virtual-law-
firm-through-collaborative-work-teams/.
4 See ADAM SMITH, THE WEALTH OF NATIONS (1776) (“Man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it
from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favor, and show them that it is for their own advantage
to do for him what he requires of them … It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their
regard to their own interest.”).
5 James R. Faulconbridge, et. al., Global Law Firms: Globalization and Organizational Spaces of Cross-Border Legal Work, 28 NW. J. INT’L L. & BUS.
455 (2008).
6 Richard L. Abel, Transnational Law Practice, 44 CASE W. RES. L. REV. 737 (1994).
7 HISTORY OF BAKER & MCKENZIE, http://www.bakermckenzie.com/firmfacts/firmhistory/ (last visited May 3, 2015); JOHN R. BAUMAN, PIONEERING A
GLOBAL VISION: THE STORY OF BAKER & MCKENZIE (1999).
8 This rule still applies in a number of countries like Brazil where the Baker McKenzie members uses it own name and is association with the firm. See
Keep Out – Brazilian Lawyers Do Not Want Pesky Foreigners Poaching Their Clients, THE ECONOMIST (June 23, 2011), available at
http://www.economist.com/node/18867851?story_id=18867851&fsrc=rss. The same applies to India. See Ashurst Seals Best-Friends Deal with India Law
Partners, THE LAWYER (July 15, 2011), available at http://www.thelawyer.com/1008640.article.
82
