Page 17 - The Handbook - Law Firm Networks
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Law Firm Networks – The Future of the Legal Profession
Chapter 2 – Law Firm or Network? Market Perceptions and Operations
The best way to make this determination is to objectively analyze the different models for providing legal
services from the perspective of their underlying market perceptions, their common characteristics, and their
activities. (For a detailed analysis of the Verein, see Appendix 6)
In professional services, the external market perception is very important. It is how a model is understood by
those practicing and providing services to the legal profession. It does not necessarily reflect the exact legal
status of the organization. It also may not reflect how clients view the models. The clients’ perspective may
be that they want access to lawyers and firms who can access multiple resources. They may be concerned
about how their lawyers are able to manage those resources when providing service. Market perceptions can
be very different than the actual legal and operational status.
Network and Association Status
While the lines are not precise, below are some of the elements that distinguish the various models contrasted
with similar models in the accounting profession
Exhibit 3 – Legal, Ethical, Operations, Management, and Branding Status
Big 4 Network Legal Verein Law Firm Law Firm
(network) Network
Members operate under a Yes Yes
common name Yes, with No
Share profits No exceptions Yes
Conflict of interest rules apply Yes No No Yes
Members pay management Yes Yes45 No No
fees or dues Yes46 Yes
Local management has full Split No
authority Yes47 Yes
Operations integrated Yes Yes
Command and control Yes Yes No Yes
management Semi-local No
Global practice groups Yes autonomy Yes
Vicarious liability No Yes Yes Yes
Common joint marketing Yes No No Yes
Common tax liability No Yes Some/No Yes
No No
Business plan Yes Yes
Yes/No Yes Yes No
Known as network Yes No Yes No
Yes Sometimes Yes No
Referred to as network Yes No
Exclusive Referrals
45 In a recent case, the chief administrative judge of the U.S. International Trade Commission held that Dentons was a law firm for conflict of interest
purposes. See Mark A. Cohen, Denton’s Disqualification and Legal Advertising: Stir But Don’t Shake, BLOOMBERG BNA, July 21, 2015,
https://bol.bna.com/dentons-disqualification-and-legal- (This was preceded by a case alleging a conflict of interest against Dentons).
46 Julie Triedman, Rift Among Rainmakers Complicates Dentons’ Mexico Deal, THE AMERICAN LAWYER, May 19, 2016,
http://www.americanlawyer.com/id=1202758141767/Rift-Among-Rainmakers-Complicates-Dentons-Mexico-Deal#ixzz4Bwa1qQra: “Soria noted
that the deal to become part of Dentons …. did not seem onerous. His office in Mexico City would be required to send 2 percent of its annual
income to the firm’s global management as overhead, plus 23 percent of inbound referral fees.”
47 Supra note 2: “Dentons promised complete freedom on compensation, hiring and other decisions, as well as a steady stream of inbound
referrals.”
6
Chapter 2 – Law Firm or Network? Market Perceptions and Operations
The best way to make this determination is to objectively analyze the different models for providing legal
services from the perspective of their underlying market perceptions, their common characteristics, and their
activities. (For a detailed analysis of the Verein, see Appendix 6)
In professional services, the external market perception is very important. It is how a model is understood by
those practicing and providing services to the legal profession. It does not necessarily reflect the exact legal
status of the organization. It also may not reflect how clients view the models. The clients’ perspective may
be that they want access to lawyers and firms who can access multiple resources. They may be concerned
about how their lawyers are able to manage those resources when providing service. Market perceptions can
be very different than the actual legal and operational status.
Network and Association Status
While the lines are not precise, below are some of the elements that distinguish the various models contrasted
with similar models in the accounting profession
Exhibit 3 – Legal, Ethical, Operations, Management, and Branding Status
Big 4 Network Legal Verein Law Firm Law Firm
(network) Network
Members operate under a Yes Yes
common name Yes, with No
Share profits No exceptions Yes
Conflict of interest rules apply Yes No No Yes
Members pay management Yes Yes45 No No
fees or dues Yes46 Yes
Local management has full Split No
authority Yes47 Yes
Operations integrated Yes Yes
Command and control Yes Yes No Yes
management Semi-local No
Global practice groups Yes autonomy Yes
Vicarious liability No Yes Yes Yes
Common joint marketing Yes No No Yes
Common tax liability No Yes Some/No Yes
No No
Business plan Yes Yes
Yes/No Yes Yes No
Known as network Yes No Yes No
Yes Sometimes Yes No
Referred to as network Yes No
Exclusive Referrals
45 In a recent case, the chief administrative judge of the U.S. International Trade Commission held that Dentons was a law firm for conflict of interest
purposes. See Mark A. Cohen, Denton’s Disqualification and Legal Advertising: Stir But Don’t Shake, BLOOMBERG BNA, July 21, 2015,
https://bol.bna.com/dentons-disqualification-and-legal- (This was preceded by a case alleging a conflict of interest against Dentons).
46 Julie Triedman, Rift Among Rainmakers Complicates Dentons’ Mexico Deal, THE AMERICAN LAWYER, May 19, 2016,
http://www.americanlawyer.com/id=1202758141767/Rift-Among-Rainmakers-Complicates-Dentons-Mexico-Deal#ixzz4Bwa1qQra: “Soria noted
that the deal to become part of Dentons …. did not seem onerous. His office in Mexico City would be required to send 2 percent of its annual
income to the firm’s global management as overhead, plus 23 percent of inbound referral fees.”
47 Supra note 2: “Dentons promised complete freedom on compensation, hiring and other decisions, as well as a steady stream of inbound
referrals.”
6
