Last month Interlaw CEO Michael Siebold wrote an opinion article in The Lawyer arguing that certain international law firms bear more than a passing resemblance to networks. In fact, he argued, their referral system is the same, as is their organisational structure.

More networks are shaping strategies that put them head-to-head with international firms in the pursuit of clients and coveted panel spots.

As international firms (particularly Dentons) are knocking at the doors of many independent firms to fit their global expansion plans, networks must up their game to retain and provide the work pipeline to their members.

But the pressure is on for member firms too. Networks such as Multilaw have implemented a rule that will mean that members’ status will be reviewed every three years to “reassure clients that they will receive the same consistently high quality legal advice and level of service”.

For other networks the focus is on providing a platform that can offer a co-ordinated service to clients while investing in technology and infrastructure that meets the demands of member firms and provides advice in a unified format. The theory is that happy clients will make happy firms.

Innovations

Networks such as L&E Global have implemented structures to measure the efficiency of law firms during a piece of legal work, with one partner co-ordinating efforts across the network.

“We always try to give clients as uniform a rate as possible because the last thing you want is for clients to have surprises,” L&E Global executive director Stephan Swinkels explains. “You know in advance what you’ll get. It’s a one-team, one-fee structure. You’ll get one invoice at the end.”

As law firm networks get more involved in organising referrals between member firms, some argue that the lines between the way international firms and law firm networks operate are blurred.

“We provide coverage in every jurisdiction where people need help”

According to Swinkels, many member firms have moved away from the structure offered by international firms, but those that are not happy will “look for another international strategy”.

“A good alliance is an international law firm in disguise,” he says. “The bad ones are just phone directories.”

Ius Laboris executive director Sam Everatt says the emergence of superfirms, largely through Swiss Verein structures, means many firms really are membership organisations.

“They’re operating under a single brand and varying degrees of financial integration but underneath many are not that integrated,” he explains.

Despite the changes within law firm networks Everatt says there is a clear distinction.

“There’s no desire to control firms [in law firm networks],” he says. “There’s a fine line between directing and integration – all our firms want to remain independent and will do so. We aren’t changing our structure, legal or otherwise.

“International competition has stepped up dramatically and that’s forcing us to be much more professional in the way we organise ourselves and approach our clients.”

Lex Mundi president Carl Anduri does not believe all global law firms can be put in the same network category.

“Even though they operate under a brand the Vereins and firms that are meant to be worldwide partnerships have different levels of participation,” he says.

“People still put international law firms and international networks in different categories. We provide coverage in every jurisdiction where people need help. Our issue is getting the word out about networks.”

Rumour is that some networks are considering taking their organisational innovation to the next level and opting for an integrated financial structure. But many think this would nullify the point of a network – to maintain members’ ­independence.

“Moving towards a more integrated organisation defeats the purpose [of a law firm network],” Siebold says, “and that is the independence of the referring firm to not use a member firm but someone else.”

“Networks are very honest about the relationships that exist between their member firms,” Multilaw executive director Adam Cooke says. “Global law firms are the ones blurring the lines. They’re selling themselves as a law firm but they’re selling themselves as networks.”

An association of associations

Last year saw a change in the way networks operate. A number of them decided to unite under the umbrella banner of the Association of International Law Firm Networks (AILFN), an ‘association of associations’ that aims to represent the common interests of global and regional law firm networks.

The AILFN is a five-strong membership includes Multilaw and International Lawyers Association, both shortlisted for Global Network of the Year at The Lawyer European Awards 2016.

According to the AILFN, networks represent a total of 10 per cent of all global legal services billings – £35bn.

“Global law firms are the ones blurring the lines, selling themselves as a law firm but also networks”

The function of the AILFN is to “ensure that networks are recognised as a model for global legal services by the media, the legal profession and clients through education” as well as to establish “quality standards and principles for AILFN members through a joint committee of international corporate counsel associations”, and provide a forum for networks to “exchange ideas on best practices, speakers, meetings and other services”.

“We’re in the same boat and we’re all competing against a global network,” Cooke says. “We need to educate the corporate counsel community to focus on networks. None of us have the budget individually, but together we can get the message out there.”

Critics argue that the drawbacks far outweigh any benefits this association of networks might be able to provide. The joint committee of law firm members can hardly be expected to regulate quality in individual networks, and the exchange of ideas between rivals might not be extensive.

“We’re very careful about what we share,” Cooke says. “We share information about the quality of the firms, but are very careful not to share information like membership fees.

“The aim is not to regulate, it’s to share best practice and improve networks through discussion. It’s not a regulatory body.”

Some law firm networks argue that they collaborate with each other without the need to join the AILFN. “We could work with alliances of tax lawyers, IP lawyers or corporate lawyers,” Swinkels says. “We also work with alliances of accounting firms and management consultants.”

“I have full respect for what’s being done,” says Siebold. “I see the effort from what I read, I understand what they are trying to achieve.

“My issue is the approach; I think we are adding too many levels of organisation when the ultimate goal is to get to the client. Having too many conduits and too many in-betweens gets us nowhere.

“I believe there are too many networks. Some firms are members of several networks, but I don’t think we solve that issue of adding that layer of control.”

One source from a global network agrees.

“It’s not going to help with the difficulties that networks have which is getting awareness and involvement from other law firm members,” they  comment.

Expanding influence

2016 will see law firm networks continue to focus on expanding their geographical reach as well as their influence on network members.

“Focus is the key word for 2016,” Swinkels says. “We cover everything and don’t have any black spots on the map.”

“There will be a small number of countries being added in the next 12 months or so,” says Everatt, “but it’s not going to be the main driver of the alliance.”

“Our focus is on growing and including Africa more,” Siebold says of his three-year plan for Interlaw. “We’re trying to utilise what we have and use that for the benefit of the clients, which will ultimately be for the benefit of the law firms as well.”

Lex Mundi will continue to focus on having a presence on the ground in different regions following the launch of its regional business development initiative in Asia Pacific last year.

Aside from that, Anduri says the network will also focus on “improving member firms” through a client feedback initiative.

“We’re one of the few networks that track all of the referrals including the value,” Cooke comments. “We are able to say to each of our members ‘this is what you got from the network’. Of course there have been teething problems.

“We’ve just implemented the online referral system and 2016 will be the time we look at the data we have collected. We’re going to look at all the clients collectively and examine where the cross-opportunities are, where we can target new clients.

“The race is on.”

The Lawyer European Awards 2016: Global Network of the Year shortlist

Globalaw

Globalaw’s strategy for the past year has included engaging with the female lawyers in its network. It set up a women’s group to consider how to change the trend and push more women into attending member meetings.

The network has also developed a one-year leadership programme for lawyers of 3-5PQE from its member firms.

Interlaw

Following the re-election of chairman Michael Siebold last year Interlaw has put in place a three-year plan for expansion. This includes building its brand awareness, establishing “digital systems and processes that will enhance the brand” in order to allow law firms to use the platform more effectively. The network aims fill in the remaining gaps in jurisdictions around the world and build a client development programme to target and collaborate with clients through a platform that allows the network to interact with clients directly.

So far, the pilot for the client development programme has been rolled out across Europe with plans to expand it to Asia and the Americas.

Interlaw has also joined the ranks of law firm networks that are looking to invest in lawyers’ skillsets. It currently offers global secondment opportunities for young lawyers at member firms.

International Lawyers Network

The International Lawyers Network has focused more on the education of their members in their strategy, launching a series of webinars, workshops and mentorship programmes aimed at fostering new work within member firms.

The latter initiative is particularly interesting – through the mentorship programme the network will identify partners within member firms who are “being groomed for international business” and pinpoint which areas of practice and jurisdiction they would like to focus on, to help them.

Ius Laboris

For Ius Laboris, 2015 marked another year of growth. According to the network, there was a peak in labour and employment referrals in the aftermath of the financial crisis, but this was exceeded throughout 2014 and 2015.

The network has focused on quality control in the past year. Member firms that participate in cross-border projects are able to provide feedback to identify areas of development on a yearly basis, allowing the network’s committee to identify ways to improve client service levels. This is of increasing importance as, according to the network, 50 per cent of referrals in the alliance are from multinational projects.

To improve its brand presence Ius Laboris created a ‘cloning’ website initiative which allows the network to replicate members’ websites with its branding, design and hosting. All member firms were expected to move to these sites permanently at the end of 2015.

L&E Global

Last year saw a continuation of L&E Global’s 2014 strategy, which delivers a “simplified attorney-client relationship in regards to billing, point of contact, and overall advice and counsel by offering a one-stop shop for all of their employment needs”.

The network has achieved this in practice by implementing a supervising partner in each of the projects, which is in charge of assembling an international team and coordinating all of the firms’ services.

“Where we used to compete with local firms, now we compete with the top international law firms on international employment pitches,” L&E executive director Stephan Swinkels comments.

According to Swinkels, L&E Global has already delivered “measurable benefits” to clients such as Zurich, Staples, Lidl, Bank of America, Ted Baker, Rockwell Automation, ThyssenKrupp and Red Bull.

Lex Mundi

Lex Mundi called on all of its member firms to implement a client feedback programme or enhance an existing programme before the end of 2017. This is just one example of the three-year strategic plan that the network has put in place since 2014.

Last year Lex Mundi launched a regional business development initiative in the Asia Pacific region, which is a main area of focus for the firm. Its new initiatives aim to generate and convert new business opportunities for high-value cross-border advice in the region.

Aside from those two main points, the network has continued to focus on creating client feedback groups to “discuss developments, trends and potential impact on the client” across all of its jurisdictions.

In 2014, Lex Mundi launched a one-week crash-course to increase the impact and efficiency of lawyers working with clients by helping them to understand clients’ business challenges. This was implemented officially as part of the Lex Mundi Institute in 2015.

Multilaw

Global law firm network Multilaw is one example of networks implementing technology to maximise efficiency. As of 2015, the network moved to a ‘bespoke online referral system’ that enables it to capture more accurate and intelligent data, including actual billing values, client names and industry sectors.

The firm has also begun to launch events that allow members to pitch to potential clients – which include companies like Paddy Power, E Maint, and Mainstream Renewables – and has decided that all of its events will include that feature.

Multilaw was among the law firm networks which decided to join the AILFN last year.