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Lawyers and Accountants 2019 -
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.129 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.130
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.131 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.132 All this is done without the overhead of a large centrally located bureaucratic
organization. Resources can then be spent to cross-market services while internal control shifts to each unit
of the MDO and focuses on its own core competencies.
Access to the MDO can be extended to the public or the corporate client if the organization would like to
further broaden the referral base. The gatekeeper is no longer required. The corporate client can create peer-
129 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
130 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.
131 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).
132 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).
51
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.129 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.130
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.131 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.132 All this is done without the overhead of a large centrally located bureaucratic
organization. Resources can then be spent to cross-market services while internal control shifts to each unit
of the MDO and focuses on its own core competencies.
Access to the MDO can be extended to the public or the corporate client if the organization would like to
further broaden the referral base. The gatekeeper is no longer required. The corporate client can create peer-
129 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
130 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.
131 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).
132 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).
51
