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Ask a simple question: law firm networks, pro or con? The answer you’ll get — from network executives, from attorneys, from consultants — is, “it depends.” Networks are associations of firms located in different markets that are designed to promote client referrals among member firms and to facilitate resource and information sharing. They sound like a good idea, but the actual benefits of membership depend on what the firm puts in. The true costs of joining a network are the time and participation required to make membership worthwhile, not the annual dues, which vary by network and by size of firm. At Houston-based Lex Mundi, one of the largest with upwards of 160 firms, president Carl Anduri says firms with fewer than 20 lawyers pay as little as $4,700 annually, while firms with more than 600 lawyers pay $35,000. THE RISE OF NETWORKS Law firm networks became popular in the early ’80s, as a way for smaller and mid-size firms to compete with larger firms. Network membership provided the global coverage many clients required without the overhead of opening an overseas office. Although there are domestic networks for firms working on multi-state client matters, lately even the domestic networks are accumulating international members. There are hundreds of networks, including specialized groups whose principal function is information-sharing. It’s not unusual for a firm to be a member of a referral-oriented network such as the Miami-based TerraLex, and also of a specialized network. And there are many specialized groups, including the Techlaw group in Tennessee, a 15-member network organized around technology specialties; and Immlaw the 14-member national consortium of immigration firms based in New York. GAINING ENTRY Network membership is usually by invitation, though firms can ask to be considered. Charles McCallum, a partner at Warner, Norcross & Judd in Grand Rapids, is vice chair for membership of TerraLex. “We are looking for leading indigenous firms in their markets, with good reputations and good client bases, and full-service practices with litigation capability,” says McCallum. Finding such firms, he says, is mostly by word-of-mouth, with network committees looking at “every conceivable resource.” Lex Mundi, Meritas, Interlaw and TerraLex have high standards for membership and retention. In addition to following up on client complaints, and jettisoning firms that aren’t delivering at the expected standard, some of the networks conduct regular reviews. Most require participation — and expect member firms to send representatives to at least the annual meeting and preferably some regional sessions — for continued membership. Many networks limit their membership to one firm per jurisdiction, to maximize benefits for participating firms. They don’t require firms to make in-network referrals, however, recognizing that lawyers and firms often have personal or established referral preferences that could take precedence. THE BENEFITS — AND THE LIMITATIONS As a network member, a firm in Iowa can call on a colleague in Peru to help a client clear a patent or complete an acquisition. Being a network member may not be as impressive as actually having your own global offices. But Dallas-based marketing and management consultant Linda Hazelton points out: “If you can say ‘I’m a member of Interlaw, with 64 firms and nearly 5,000 lawyers in virtually every business center in the world,’ that seems more cosmopolitan and effective than simply, ‘I’m at a 45-lawyer firm in Des Moines.’” And that Iowa member might also be on the receiving end of referrals from Lima. Or not. Which brings us to expectations. Firms that join expecting a steady stream of in-network referrals may be disappointed. Altman Weil consultant Charles Maddock says it’s important to recognize that there is a give and take in these networks. “Firms think about it as a one-sided thing, ‘What have you done for me lately?’ But if they aren’t giving out referrals, they’re probably not going to get much back.” Firms that are active may spend more on trips to meetings and the foregone billable hours than in membership dues, but by raising their profile within the network they will more likely see results. TerraLex’s McCallum explains that this kind of participation is also where the referrals come from. Many networks, such as the Minneapolis-based 168-member Meritas or Lex Mundi, are a good source of free advice. So says Lynn Deitch, a shareholder specializing in labor and employment law at Butzel Long’s Detroit office and the first woman to serve as Lex Mundi chair. Deitch remembers getting a call from a California attorney asking if non-compete agreements were enforceable in Michigan. “It turned out that her client was being sued in Michigan,” Deitch says now, “and we ended up working on the case.” Many networks provide seminars and conferences specifically for managing partners and marketing directors. This kind of information-sharing on best business practices, consultant Maddock says ruefully, “is essentially free consulting and can be very effective.” If you are a member of a well-known and successfully-marketed network, then benefits may also accrue from out-of-network referrals. In February, Mark Greene, managing director of The Brand Research Company, based in Washington, D.C., completed a survey for Martindale-Hubbell in which general counsels were asked to rate the importance of various sources with regard to enhancing the credibility of lawyers or law firms. Networks and alliances came in fourth out of 14 possible answers, behind personal references, directories and Web sites. Meritas president Maggie Watkins says of her job, “a lot of it is educating the attorneys about what the network can do for them; it’s another tool in their bag of tricks, another way to market the firm.”

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