NEW Locate Law Network Feature Members in 196 Countries Stephen J. McGarry The Handbook Law Firm Networks Stephen J. McGarry President: AILFN HG.org Founder: Lex Mundi World Services Group Locatelawnetworks.com © Copyright 2017 All Rights Reserved ii Dedication This book is dedicated to the hundreds of thousands of professionals who work at firms that are members of a professional services network. As a result of the efforts of the founders, officers, directors, committee chairs, and individual professionals, clients now receive the highest quality and most cost-effective professional services in the world through independent firms. This book is also dedicated to the staff at each of the more than 170 law firm networks whose members have cumulative annual revenues of more than $120 billion U.S. dollars and represent virtually every significant business on earth. I would like to thank everyone with whom I have had the personal opportunity to collaborate in creating and building world-class network organizations, including Lex Mundi, World Services Group (WSG), and the Association of International of Law Firm Networks (AILFN). Stephen J. McGarry About the Sponsor AILFN is a new trade association owned by law firm networks that represents their common interests. AILFN has four purposes: (1) enhance the position and recognition of all networks in the legal market; (2) establish common principles to maintain standards of quality; (3) provide a forum for networks to exchange non-confidential information; and (4) negotiate agreements with vendors that can increase the efficiency and effectiveness of networks and their members. AILFN will have network members whose members have more than 200,000 attorneys in 5,000-plus offices and who cumulatively bill between more than $100 billion U.S. dollars annually. iii Table of Contents 2017 Introduction Chapter 1 – Law Firm Networks ...................................................................................................... 1 Why Do Firms Join? ................................................................................................ 4 Evaluating Networks – Criteria ............................................................................. 5 Chapter 2 – Law Firm or Network? Market Perceptions and Operations ............................ 6 Network Functions ................................................................................................... 6 Network Levels ...…………………………………………………………………...7 The Disclaimer – DNA of a Network ................................................................... 10 Chapter 3 – History of Networks – Why Does It Matter? ......................................................... 13 Accounting Networks .............................................................................................. 13 Law Firm Networks ................................................................................................ 16 Multidisciplinary Networks .................................................................................... 20 Specialty Networks .................................................................................................. 21 Chapter 4 – Organizing a Traditional Law Firm Network ....................................................... 23 Preliminary Plans and Considerations .................................................................. 24 Organizing – Accounting, Legal, and Multidisciplinary Networks .................... 27 Other Network Models – Client-Centric Models ................................................. 29 Chapter 5 – Governance of Networks and Operations .............................................................. 30 Governance – Theory and Application .................................................................. 30 Network Operations – Theory and Application .................................................... 36 Financing a Network ................................................................................................ 38 Network Staffs .......................................................................................................... 40 Groups in Networks ................................................................................................. 43 Meetings in Networks .............................................................................................. 46 Referrals – How They Work and Do Not Work .................................................... 47 Operations – Other Network Initiatives................................................................. 49 Balance in a Maturing Network – Issues in Governance and Operations ......... 50 Chapter 6 – Marketing the Network – Creating the Network Brand ..................................... 55 Internal Awareness and Engagement Marketing ................................................. 56 Inter-Member Marketing ........................................................................................ 58 External Awareness and Engagement Marketing ................................................ 59 Alternative Marketing Strategies ........................................................................... 61 Technology and Network Marketing ..................................................................... 61 Social Network Marketing .................................................................................... 63 iv Chapter 7 – Regulations and Other Legal Considerations for Networks .............................. 66 Legal Networks ....................................................................................................... 66 Accounting Networks ............................................................................................. 67 Accounting Firms – Vicarious Liabilities ............................................................ 70 Competition Regulation – Accounting Networks ................................................ 73 Multidisciplinary Networks................................................................................... 73 Chapter 8 – Networks and the Technology Revolution.............................................................. 74 The Framework ..................................................................................................... 75 What Does Technology Do for Networks ............................................................ 77 Why Networks Do Not Use Technology .............................................................. 80 Chapter 9 – The Future of Law Firm Networks .......................................................................... 81 Legal ....................................................................................................................... 82 Multidisciplinary ................................................................................................... 84 Specialty ................................................................................................................ 86 Accounting ............................................................................................................ 87 Appendices Appendix 1 – Professional Services Networks 1986-2007 ............................................. 90 Appendix 2 – Law Firm Networks and Law Firms – Statistical Comparisons ....... 91 Appendix 3 – Directory of Law Firm Network Executive……………..………….. 94 Appendix 4 – Directory of Legal, Multidisciplinary, and Specialty Networks ...... 104 Appendix 5 – Multidisciplinary Networks ..................................................................... 152 Appendix 6 – Specialty Legal Networks ......................................................................... 153 Appendix 7 - The verein as a law firm network ……………………………….......154 v 2017 Introduction Stephen J. McGarry1 The first edition of this book was published in 2011 as Professional Services Networks – The Future of the Accounting and Legal Professions. It was completely updated and published in 2015 under the title: Law Firm Networks - The Future of the Legal Profession. The Handbook – Law Firm Networks has expanded on the concepts, the models and the practicalities of network operations. The Handbook’s objective is to provide recipes for law firm network success in the ever changing legal market. While the new edition covers many of the same subjects, networks themselves have undergone a tremendous number of internal and external changes. In particular, the formation of the Association of International Law Firm Networks (AILFN)2 illustrates just how far we have come in such a short time. AILFN represents the common interest of all networks. It has increased the status of networks through its ability to directly market the network concept to more than 20,000 professionals. In the coming years, the network evolution will become a revolution as networks are recognized as the only model for global legal representation. The rapid consolidation of the different models in the legal profession began only eight years ago with the recession. There has been a realization that the traditional integrated law firm cannot achieve global status or economically provide all of the services that clients require. A number of the largest law firms have sought to reconstitute themselves with a more flexible structure that recognizes cultural and economic differences in each market. Like the Big 4 accounting firms, they have adopted various network-type structures in which the local firms are independent entities. Since this umbrella entity is registered in Switzerland