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advertising, U.S. firms gained the opportunity to market their services in the U.S. and, as a result,
indirectly began to market themselves in each of the countries where they had offices. Local bars
to which attorneys received their licenses had severe restriction on their own firms that were not
lifted until very much later.1 For example, local partners and associates were required to be citizens
and to be admitted to the bar where they practiced. Naturally, when foreign firms began to meet
these criteria, local firms became concerned. The result was a need for local firms to band together,
and networks became tools to compete against the much larger intruders to address this expansion.
In fact, the first network of local firms came about primarily as a result of the invasion by London
and New York firms.
Networks can be evaluated at different by the level of organization and activities pursued
by the network. There are four levels. In the legal profession, there are no Level 4 networks unless
you count the large international firms now organized as Swiss vereins as networks. A case can be
made for this development.
Level 1 international networks, called clubs, generally consist of 10 firms in different
countries.2 The typical format consists of holding several meetings a year among managing
partners to discuss management and market-related issues. Secrecy shrouded the networks because
the members feared losing business from other firms if they knew of these networks.3 On the other
hand, many did not hesitate to advertise to their clients that they had foreign connections and
correspondents. Today the clubs are commonly known as “best friend’s networks.” Examples
include Leading Counsel Network4 and Slaughter and May.5
Level 2 networks began in the 1980s when the Level 1 clubs evolved into networks. By
that time, networks were not as secretive and even published directories, materials, and brochures.6
The members met annually, and some networks focused on specific practices, such as litigation,7
while others were more generic. Because networks were not thought of as franchises or strategic
models, the membership selection process was not particularly rigorous.8 Many of the networks
that were innovators in the 1980s reached Level 2 and had no intent to develop beyond this level.
This is evidenced by the fact that their membership over several decades has not increased, their
websites contain no information, their governance depends on the same individuals, and their
operations are limited.
Level 3 networks began in 1989 when Lex Mundi was formed.9 It was the first network
that required each member to be one of the largest and most established firms in a state or country.
Unlike a Level 2 network where all activities are internal, 50 percent of its activities were
1 Bates v. Arizona, 433 U.S. 350 (1977).
2 Chris Blackhurst, The Secret World of Clubs, 4 INT’L FIN. L. REV. 20 (1985). The first known club was the Club de Abogados, which had members
in Latin America and Spain. There was also a sister club called the Club de Abogados Europeo.
3 There were no directories. Periodically, an article might appear on the networks.
4 James Swift, Nine-Strong CIS Legal Network Gets Off Ground, ARMENIAN DIASPORA, available at
http://www.armeniandiaspora.com/showthread.php?197623-Nine-Strong-CIS-Legal-Network-Gets-Off-Ground.
5 SLAUGHTER AND MAY, http://www.slaughterandmay.com/where-we-work.aspx.
6 See INTERLAW, http://www.interlaw.org.
7 ALFA was one of the first networks in the legal profession. Finding information about ALFA and members was very difficult. Today, this is not
the case. See ALFA, http://www.alfainternational.com.
8 This selection process is reflected today in the networks that have firms with a wide range of sizes, e.g., small firms in locations where there are
firms that are three and four times the size. See TERRALEX, http://www.terralex.org.
9 Stephen McGarry, Practicing Law in the 21st Century Will Require Affiliations, LEG. MGMT. 34 (May/June 1994); see also Stratton, Captive Law
firms vs. Global Legal Networks: The MDP Inquiry Continues, 82 TAX NOTES 26-40 (Jan. 4, 1999); see also Nick Jarrett-Kerr, International
Alliances: How They Work, What They Deliver and Whether to Join, JARRETT-KERR.COM (Dec. 5, 2012), http://www.jarrett-
kerr.com/blog/International-alliances; see also Lis Wiehl, How Small Firms Compete Amid the Giants, THE N.Y. TIMES (Nov. 10, 1989),
http://www.nytimes.com/1989/11/10/us/law-how- small-firms-compete-amid-merging-giants.html.
10 Lex Mundi is the network that has spent the most to become “the Leading Association of Independent Law Firms.”
216
indirectly began to market themselves in each of the countries where they had offices. Local bars
to which attorneys received their licenses had severe restriction on their own firms that were not
lifted until very much later.1 For example, local partners and associates were required to be citizens
and to be admitted to the bar where they practiced. Naturally, when foreign firms began to meet
these criteria, local firms became concerned. The result was a need for local firms to band together,
and networks became tools to compete against the much larger intruders to address this expansion.
In fact, the first network of local firms came about primarily as a result of the invasion by London
and New York firms.
Networks can be evaluated at different by the level of organization and activities pursued
by the network. There are four levels. In the legal profession, there are no Level 4 networks unless
you count the large international firms now organized as Swiss vereins as networks. A case can be
made for this development.
Level 1 international networks, called clubs, generally consist of 10 firms in different
countries.2 The typical format consists of holding several meetings a year among managing
partners to discuss management and market-related issues. Secrecy shrouded the networks because
the members feared losing business from other firms if they knew of these networks.3 On the other
hand, many did not hesitate to advertise to their clients that they had foreign connections and
correspondents. Today the clubs are commonly known as “best friend’s networks.” Examples
include Leading Counsel Network4 and Slaughter and May.5
Level 2 networks began in the 1980s when the Level 1 clubs evolved into networks. By
that time, networks were not as secretive and even published directories, materials, and brochures.6
The members met annually, and some networks focused on specific practices, such as litigation,7
while others were more generic. Because networks were not thought of as franchises or strategic
models, the membership selection process was not particularly rigorous.8 Many of the networks
that were innovators in the 1980s reached Level 2 and had no intent to develop beyond this level.
This is evidenced by the fact that their membership over several decades has not increased, their
websites contain no information, their governance depends on the same individuals, and their
operations are limited.
Level 3 networks began in 1989 when Lex Mundi was formed.9 It was the first network
that required each member to be one of the largest and most established firms in a state or country.
Unlike a Level 2 network where all activities are internal, 50 percent of its activities were
1 Bates v. Arizona, 433 U.S. 350 (1977).
2 Chris Blackhurst, The Secret World of Clubs, 4 INT’L FIN. L. REV. 20 (1985). The first known club was the Club de Abogados, which had members
in Latin America and Spain. There was also a sister club called the Club de Abogados Europeo.
3 There were no directories. Periodically, an article might appear on the networks.
4 James Swift, Nine-Strong CIS Legal Network Gets Off Ground, ARMENIAN DIASPORA, available at
http://www.armeniandiaspora.com/showthread.php?197623-Nine-Strong-CIS-Legal-Network-Gets-Off-Ground.
5 SLAUGHTER AND MAY, http://www.slaughterandmay.com/where-we-work.aspx.
6 See INTERLAW, http://www.interlaw.org.
7 ALFA was one of the first networks in the legal profession. Finding information about ALFA and members was very difficult. Today, this is not
the case. See ALFA, http://www.alfainternational.com.
8 This selection process is reflected today in the networks that have firms with a wide range of sizes, e.g., small firms in locations where there are
firms that are three and four times the size. See TERRALEX, http://www.terralex.org.
9 Stephen McGarry, Practicing Law in the 21st Century Will Require Affiliations, LEG. MGMT. 34 (May/June 1994); see also Stratton, Captive Law
firms vs. Global Legal Networks: The MDP Inquiry Continues, 82 TAX NOTES 26-40 (Jan. 4, 1999); see also Nick Jarrett-Kerr, International
Alliances: How They Work, What They Deliver and Whether to Join, JARRETT-KERR.COM (Dec. 5, 2012), http://www.jarrett-
kerr.com/blog/International-alliances; see also Lis Wiehl, How Small Firms Compete Amid the Giants, THE N.Y. TIMES (Nov. 10, 1989),
http://www.nytimes.com/1989/11/10/us/law-how- small-firms-compete-amid-merging-giants.html.
10 Lex Mundi is the network that has spent the most to become “the Leading Association of Independent Law Firms.”
216
