Page 8 - MDPs - Chapter 14 - Multidisciplinayr Practice and Partnershps
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of professional networking organizations (publications, meetings, committees, etc.) with databases of
professionals allows for the instant creation of multidisciplinary teams. The MDO is more than an
association; it is an entity whose objective is to assist members in acquiring and retaining clients.
§ 14.02 MDOs and Professional Services
The first chapter discussed several trends that accelerated the creation of the Big 5: globalization, core
competency convergence and increases in efficiencies resulting from technology. The MDO must be
placed in context as to provide a contrast between it and the Big 5 consulting firms.
The reasoning might seem circular that professional services are created out of the demand for the
services.8 Demand is largely external, although new services themselves sometimes create the demand
for those services. Assuming there is a demand, the primary competitive issue for professionals is how
they can locate clients who want or need their services. When competition is high, as is the case in the
service markets today, the cost of client acquisition becomes more important. Law firms, which spent
little for marketing in the past, have extensive and growing marketing departments. That said, law firms,
no matter what their size, cannot match the Big 5’s marketing budgets that together exceed $100 million.9
Service providers are now expanding geographically as never before. Their objective is to locate
geographical and topical markets that have not been fully penetrated. one of the primary benefits to
professionals in the Big 5, as one-stop shops, is that they reduce the cost of new market penetration
through the cross-selling of new services by professionals who are already in the marketplace. This
leverage is not available to independent firms, which must undertake significant costs in order to expand
into new markets. It is also not available in most law firm networks because few law ferns have an interest
in assisting a fellow law firm member, which could become a competing law firm, enter their market.
However in the case of an MDO, non-competing professionals can create new joint services using each
other’s services.
The MDO, by combining traditional networks with new technology, creates a way to penetrate existing
and future markets.10 It does so by creating a high level of resource transparency between independent
networks, companies and businesses so each has the resources of the other available in all markets. They
can provide access to professionals everywhere for every service as well as create new services.
Ultimately, the scope of the services could extend beyond that offered by the Big 5.
Once contact is made among the professionals, a peer-to-peer relationship can be developed independent
of the central network.11 All this is done without the overhead of a large centrally located bureaucratic
Affiliation, Legal Management, 34, May/June 1994. Semoa, Captive Law Firms vs. Global Legal Networks. The MDP Inquiry Continues, 82 Tax
Notes 36-40 (Jan. 4, 1999).
8 The American Bar Association Commission on Multidisciplinary Services was unable to study the interest in MDP services but commented that
it was not the objective of the Commission to determine demand
9 In addition to large marketing budgets, a number of Big 5 firms are now in the venture capital business funding tech companies with whom
they can joint venture. MacDonald, Arthur Andersen Sets Up Fund to Take Stakes in Web Startups in Lieu of Peas, WSJ, AIO, January 24, 2000.
10 Elkin, Law and Economics in Cyberspace, Annual Conference of the European Association of Law and Economics, 19 Int’l Rev. of Law and
Econ., 553-581 (Dec. 1999).
11 The traditional concept of a network, including the Internet, is that communications is through a central hub. Peer-to-peer permits users to
bypass the hub and deal directly with others. A directory is one example of a peer-to-peer vehicle and a matrix is another. When it is done on
line, the users separate themselves from the network and begins to deal with each other directly. An example can be found in Niku Legal
(http://wwwniku.com/legal/index.html).
3
professionals allows for the instant creation of multidisciplinary teams. The MDO is more than an
association; it is an entity whose objective is to assist members in acquiring and retaining clients.
§ 14.02 MDOs and Professional Services
The first chapter discussed several trends that accelerated the creation of the Big 5: globalization, core
competency convergence and increases in efficiencies resulting from technology. The MDO must be
placed in context as to provide a contrast between it and the Big 5 consulting firms.
The reasoning might seem circular that professional services are created out of the demand for the
services.8 Demand is largely external, although new services themselves sometimes create the demand
for those services. Assuming there is a demand, the primary competitive issue for professionals is how
they can locate clients who want or need their services. When competition is high, as is the case in the
service markets today, the cost of client acquisition becomes more important. Law firms, which spent
little for marketing in the past, have extensive and growing marketing departments. That said, law firms,
no matter what their size, cannot match the Big 5’s marketing budgets that together exceed $100 million.9
Service providers are now expanding geographically as never before. Their objective is to locate
geographical and topical markets that have not been fully penetrated. one of the primary benefits to
professionals in the Big 5, as one-stop shops, is that they reduce the cost of new market penetration
through the cross-selling of new services by professionals who are already in the marketplace. This
leverage is not available to independent firms, which must undertake significant costs in order to expand
into new markets. It is also not available in most law firm networks because few law ferns have an interest
in assisting a fellow law firm member, which could become a competing law firm, enter their market.
However in the case of an MDO, non-competing professionals can create new joint services using each
other’s services.
The MDO, by combining traditional networks with new technology, creates a way to penetrate existing
and future markets.10 It does so by creating a high level of resource transparency between independent
networks, companies and businesses so each has the resources of the other available in all markets. They
can provide access to professionals everywhere for every service as well as create new services.
Ultimately, the scope of the services could extend beyond that offered by the Big 5.
Once contact is made among the professionals, a peer-to-peer relationship can be developed independent
of the central network.11 All this is done without the overhead of a large centrally located bureaucratic
Affiliation, Legal Management, 34, May/June 1994. Semoa, Captive Law Firms vs. Global Legal Networks. The MDP Inquiry Continues, 82 Tax
Notes 36-40 (Jan. 4, 1999).
8 The American Bar Association Commission on Multidisciplinary Services was unable to study the interest in MDP services but commented that
it was not the objective of the Commission to determine demand
9 In addition to large marketing budgets, a number of Big 5 firms are now in the venture capital business funding tech companies with whom
they can joint venture. MacDonald, Arthur Andersen Sets Up Fund to Take Stakes in Web Startups in Lieu of Peas, WSJ, AIO, January 24, 2000.
10 Elkin, Law and Economics in Cyberspace, Annual Conference of the European Association of Law and Economics, 19 Int’l Rev. of Law and
Econ., 553-581 (Dec. 1999).
11 The traditional concept of a network, including the Internet, is that communications is through a central hub. Peer-to-peer permits users to
bypass the hub and deal directly with others. A directory is one example of a peer-to-peer vehicle and a matrix is another. When it is done on
line, the users separate themselves from the network and begins to deal with each other directly. An example can be found in Niku Legal
(http://wwwniku.com/legal/index.html).
3
