Announced in April this year, Dentons’ Nextlaw Global Referral Network is finally up and running. Boasting access to 18,600 lawyers and more than 280 law firms across about 160 countries, Nextlaw is the “world’s broadest, deepest legal referral network”, according to Dentons, and the initial talk has been about innovation as well as disruption of the status quo.

“The challenge for clients with today’s referral networks is that they are ‘pay-to-play’ – you do not get the right firm for the client’s particular need, just the firm willing to pay to be part of the referral network,” Joe Andrew, the outspoken global chairman of Dentons, said at the time of its launch. “Nextlaw Global Referral Network is different because it is free, so clients will get the best lawyers for their need, without exception.”

As the summer rolled on, a war of words erupted between Dentons and a number of law firm network leaders over which was the superior model, as well as the model that delivered the most to its members and clients. Without going too much into detail, the gist is that Dentons claimed it had a “game-changing initiative” on its hands, one that was set to shake up the referral industry like never before.

On their part, traditional networks have stressed that the Nextlaw network idea is new but hardly revolutionary – and far from a threat.

“Nextlaw appears to be an online list of law firms,” says Carl Anduri, president of Lex Mundi. “There are many law firm lists – both online and in print – that companies can use to identify law firms. None of these is a threat to the Lex Mundi model.”

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DIFFERENT OBJECTIVES

Anduri’s assertion that Nextlaw is not a threat to legal networks is echoed by Robert Falvey and Maricarmen Trujillo, global ambassador and COO, respectively, of World Services Group (WSG), a network with 144 member firms in 106 countries.

“The structure being presented as a network appears to be a directory listing of firms deemed worthy by Dentons, whereas the legal network industry is successful due to the standards, parameters and approach each network deems strategically an important focus for the type of market and client being targeted,” they say. “In this case, the market being targeted is the firm Dentons, not the client, addressing completely different business objectives.”

They add that no industry is contingent upon one approach or ranking that announces they are the best. “To build and provide a significant and sustainable approach there must be qualified, objective and always reliable standards that are useful to the procurer. This is precisely why different networks exist,” say Trujillo and Falvey.

Meanwhile, Michael Siebold, chair of network Interlaw, says Nextlaw may prove to be a pale imitation of a genuinely collaborative international platform for the practice of law. ““When it comes down to it, Dentons truly is attempting to mimic the existing network model, only minus some of the benefits currently available to members of other networks and their clients,” he says.

He adds: “Dentons seems to be in denial about the fact that its ‘innovative’ Nextlaw model owes an awful lot to existing legal networks, but simply removes the fee-paying element despite there being unavoidable costs attached to running it. If Nextlaw’s member firms aren’t paying the overheads of administration, marketing and so on, who is picking up the tab? Will Dentons be looking to reduce its annual PEP or will, in fact, the cost for this global infrastructure be passed onto the clients – the same clients who want high quality yet cost-effective legal advice?”

Moreover, Siebold says he finds the aversion to fees concerning. “When did fees become a dirty word for lawyers?” he asks. “The very modest fees our member firms pay – as part of our not-for-profit business model – are a vital part in maintaining a nimble yet necessary infrastructure for the network to work efficiently and effectively for the benefit of both clients and members. Importantly, firms don’t have to pay to apply to or join our network, it is only after a thorough due diligence process has been completed that fees are charged quid pro quo for direct and indirect services rendered.”

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RECIPE FOR RESILIENCE

WSG’s Falvey and Trujillo say that traditional networks can focus on getting to know the cross-border and local needs of the client purposefully, strategise to achieve the desired result for the client, and most importantly, seamlessly adjust to specific requirements in each location with the local experts as needed for each client. “The very best independent law firms want to stay independent because the best law firms and lawyers are successful as representatives and as a brand by upholding credibility and success over time,” they say. “As information and communication becomes more available so too does the accessibility and awareness for clients. There will always be a need for the best, most well-connected independent firm.”

They add that the network space for independent law firms like that of the legal industry is made up of many different needs for both the firm and the client. “As long as firms see benefit in engaging in a network, there will likely be a forum to fill those needs,” say Falvey and Trujillo. “Any network with the intent to have longevity in this industry should always be reviewing their policies for membership and consider the wants of their own members. The decision to participate in a network should be reflective of values and benefits received for all parties in the transaction, and the firms’ commitment to the representation of the group as a whole.”

For Anduri, the critical point is how effective a network is in enabling member firms and their lawyers to provide effective service and deliver value to clients. “Networks that are really nothing more than directories of lawyers or firms provide very little, if any, value,” he says. “A network that has one of the top law firms in each jurisdiction as a member, that has an active professional development function and resources to facilitate the continuous improvement of member firms and member firm lawyers, and whose member firms work together seamlessly and collaboratively to serve clients will be able to deliver value to clients.”

Siebold asserts that the network model, which has been around for more than 30 years now, has the legs to go further. “Our due diligence and ongoing quality-control checks ensure that only the best firms are accepted into – and continue to be part of – our elite network,” he says. “It’s very unfortunate that networks and their growth over the years don’t seem to have captured the imagination of the press in the same way as some of the mega mergers [among law firms have].”

He adds that as businesses demand local expertise on a global scale, the fact that network firms are true experts in the cultural nuances of their jurisdiction and in that jurisdiction’s law, means they can continue to adapt quickly to and evolve alongside the changing needs of clients.

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CONSTANT IMPROVEMENT

Trujillo and Falvey at WSG acknowledge that the industry today is clearly facing a client-driven environment. “The key to sustainable success and growth is to not only continue to identify, address and expand the services provided to clients, but to utilise the unique strengths and opportunities provided by a network like WSG to differentiate firms and stay ahead of the competition,” they say. “As a WSG member, you have access to global and multidisciplinary resources including those in regions not typically or adequately covered by international firms. WSG provides members the resources and technology to find and connect with experts, share knowledge and build relationships enabling members to deliver comprehensive and seamless solutions ensuring differentiation and success.”

They add that the network space, like that of the legal industry, is constantly progressing and is made up of many different needs, categories and areas. “WSG has continued to stay ahead in the marketplace, determine trends, evolve those ideas and then develop and deliver the environment in which our members and their clients can thrive,” say Falvey and Trujillo. “WSG’s focus was and continues to be evolving and perfecting a multifaceted and comprehensive approach for independent firms to deliver on their own unique objectives to meet changing client needs.”

Anduri notes that in the past year, Lex Mundi has focused on several key concerns, including working with member firms to help develop their client feedback programmes, enhancing their legal project management skills, growing and enhancing their knowledge management capabilities, and developing thought leadership materials in the areas of competition law, mergers and acquisitions and investment in Africa.

“We are now beginning our strategic planning for the period 2018-20,” Anduri says. “We will continue to do more to make the organisation more client-facing and to enable member firms to serve clients even more cost-effectively. We will look closely at technologies that member firms and Lex Mundi can employ for that purpose.”

Siebold says the past year has been a busy one at Interlaw, with the network now expanding its reach to 133 cities following the additions of new member firms in Russia, Greece and Lebanon. “We have been able to focus on shaping our offering around the client’s increasing need for a truly international, high standard of quality legal expertise in both established and emerging markets,” he says.

“We have also focused on addressing the needs of member firms through significant investment in our brand and through collaborative events, where our lawyers have the opportunity to share knowledge and best practice.”

He says that the network is striving for constant improvement. “We will continue to focus on expanding the network to new jurisdictions to give clients the specific on-the-ground expertise we pride ourselves on,” says Siebold. “Additionally, in response to clients’ needs to make it easier to refer work non-domestically – as well as building on our reputation as a network at the cutting edge of the delivery of global legal services – we are developing more and more innovative digital solutions, including a digital client management and feedback system tool. It will allow member firms and clients to manage their international matters in real-time, while enabling members, clients and the organisation to get instant feedback on project delivery and quality from both fellow member firms and clients.”

He adds that the network will also continue to invest in its brand and clients and develop its Special Business Teams, in which representatives from member firms come together to focus on specific areas of law. “In this way, we will continue to ensure that our firms remain at the forefront of the latest legal developments in their sectors,” notes Siebold of Interlaw.

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