Page 40 - Professional Services Networks
P. 40
The Handbook: Law Firm Networks
In accounting, a “network” is now distinguishable from an “association” under rules established by the
International Federation of Accountants (IFAC)202 and the European Union. In networks members are
integrated operationally and financially and would be characterized as Levels 3 and 4 networks, as defined in
Chapter 2. Accounting associations are Levels 2 networks in which members are more independent. These
would be Level 3 and Level 4 networks. The distinction is discussed later in the book.203
Today, organizing a new accounting firm network (or association) would be very difficult. Mergers of
networks have taken place.204 Networks composed of firms that have broken from one of the existing
networks have formed a new network.205 This would allow Level 2 networks (associations) to become Level
3 networks. Recruiting new members would be difficult in that most mid-to-large firms already belong to one
or more networks. The separation between the Big 4 and other networks makes the barriers to organizing a
network very high. The networks’ development process is now almost exclusively internal as they
consolidate their memberships.
Law firm networks are not as difficult to organize for several reasons. First, there are a lot of law firms of
different sizes. In each city, state, and country there are firms with similar practices and related interests. The
practice areas for law firms are much broader.206 This may be the reason why there are more than 170
networks.207
That said, there are very few networks being organized. The law firm networks have limited growth potential
for a number of reasons, the first being that the larger ones are essentially complete, having become global.
Many of the large-firm networks have opted not to expand and to maintain their status as Level 2
networks.208 They have designated their branch offices as members of the network. Also, one of the benefits
of network membership is having access to resources. Smaller firms do not have the same need for this
access in other jurisdictions.
Today, new Level 1 networks would serve no purpose. This is because of the number of bar associations —
such as the American Bar Association, International Bar Association, Inter Pacific Bar Association, etc. —
that serve this purpose for small firms. Organizing a Level 2 network is very difficult given the number of
other networks. Membership in someone else’s network is not attractive. A Level 3 network can no longer be
organized because one element is external branding, and the market is already saturated with networks.
Multidisciplinary networks209 and the related market represent the greatest opportunity for new networks
because there are few already in existence. As a result of the proliferation of networks, organizing one that is
multidisciplinary may mean bringing firms belonging to a single professional group into a new network that
will create fresh relationships. New relationships and ways of doing business are attractive. In this sense the
multidisciplinary network is in competition with both of the other networks to find its niche. The downside is
that multidisciplinary networks are still first-mover networks. There is not a lot of precedent.
Specialty networks are the easiest to organize in that there are almost an unlimited number of individual
professional or boutique firms in specific practices from which to choose.210
202 INTERNATIONAL FEDERATION OF ACCOUNTANTS, www.ifac.org (last visited Feb. 2, 2016).
203 See infra Chapter 7, Regulations and Other Legal Considerations for Networks.
204 Fidunion International and Polaris International merged on June 1, 2011 to become one of the largest accounting networks. Past, Present & Future,
PRIMEGLOBAL, primeglobal.net/content/past-present-future-0 (last visited Feb. 2, 2016). IGAF Worldwide then merged with Polaris to
become Prime.
205 Praxity is a network established by members of Moores Rowland. See Participating Firms, PRAXITY, www.praxity.com/participating-
firms/Pages/FirmDetails.aspx?firm=426 (last visited Feb. 2, 2016).
206 HG.org list out 70 practices with 250 subcategories. HG.ORG, www.hg.org/practiceareas.html (last visited Feb. 2, 2016).
207 See infra Appendix 2.
208 See supra Chapter 3, History of Professionals Services Networks – Why Do They Matter?.
209 See infra Appendix 6.
210 See infra Appendix 8.
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In accounting, a “network” is now distinguishable from an “association” under rules established by the
International Federation of Accountants (IFAC)202 and the European Union. In networks members are
integrated operationally and financially and would be characterized as Levels 3 and 4 networks, as defined in
Chapter 2. Accounting associations are Levels 2 networks in which members are more independent. These
would be Level 3 and Level 4 networks. The distinction is discussed later in the book.203
Today, organizing a new accounting firm network (or association) would be very difficult. Mergers of
networks have taken place.204 Networks composed of firms that have broken from one of the existing
networks have formed a new network.205 This would allow Level 2 networks (associations) to become Level
3 networks. Recruiting new members would be difficult in that most mid-to-large firms already belong to one
or more networks. The separation between the Big 4 and other networks makes the barriers to organizing a
network very high. The networks’ development process is now almost exclusively internal as they
consolidate their memberships.
Law firm networks are not as difficult to organize for several reasons. First, there are a lot of law firms of
different sizes. In each city, state, and country there are firms with similar practices and related interests. The
practice areas for law firms are much broader.206 This may be the reason why there are more than 170
networks.207
That said, there are very few networks being organized. The law firm networks have limited growth potential
for a number of reasons, the first being that the larger ones are essentially complete, having become global.
Many of the large-firm networks have opted not to expand and to maintain their status as Level 2
networks.208 They have designated their branch offices as members of the network. Also, one of the benefits
of network membership is having access to resources. Smaller firms do not have the same need for this
access in other jurisdictions.
Today, new Level 1 networks would serve no purpose. This is because of the number of bar associations —
such as the American Bar Association, International Bar Association, Inter Pacific Bar Association, etc. —
that serve this purpose for small firms. Organizing a Level 2 network is very difficult given the number of
other networks. Membership in someone else’s network is not attractive. A Level 3 network can no longer be
organized because one element is external branding, and the market is already saturated with networks.
Multidisciplinary networks209 and the related market represent the greatest opportunity for new networks
because there are few already in existence. As a result of the proliferation of networks, organizing one that is
multidisciplinary may mean bringing firms belonging to a single professional group into a new network that
will create fresh relationships. New relationships and ways of doing business are attractive. In this sense the
multidisciplinary network is in competition with both of the other networks to find its niche. The downside is
that multidisciplinary networks are still first-mover networks. There is not a lot of precedent.
Specialty networks are the easiest to organize in that there are almost an unlimited number of individual
professional or boutique firms in specific practices from which to choose.210
202 INTERNATIONAL FEDERATION OF ACCOUNTANTS, www.ifac.org (last visited Feb. 2, 2016).
203 See infra Chapter 7, Regulations and Other Legal Considerations for Networks.
204 Fidunion International and Polaris International merged on June 1, 2011 to become one of the largest accounting networks. Past, Present & Future,
PRIMEGLOBAL, primeglobal.net/content/past-present-future-0 (last visited Feb. 2, 2016). IGAF Worldwide then merged with Polaris to
become Prime.
205 Praxity is a network established by members of Moores Rowland. See Participating Firms, PRAXITY, www.praxity.com/participating-
firms/Pages/FirmDetails.aspx?firm=426 (last visited Feb. 2, 2016).
206 HG.org list out 70 practices with 250 subcategories. HG.ORG, www.hg.org/practiceareas.html (last visited Feb. 2, 2016).
207 See infra Appendix 2.
208 See supra Chapter 3, History of Professionals Services Networks – Why Do They Matter?.
209 See infra Appendix 6.
210 See infra Appendix 8.
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