LEXPERT MAGAZINE
|
OCTOBER 2017 7
LEXPERT.CA
Jean Cumming
Editor-in-Chief
EDITORIAL
BFFs
LAW FIRM NETWORKS were originally called "best-friends networks" or "clubs." Gener-
ally speaking, they began in the 1980s as a way to compete with the internationalization
of law firms. Accounting firms had done it before, with independents banding together to
compete with the giants. In the early years, best friends were careful to maintain their inde-
pendence; refer sufficient mandates to each other to receive in equal measure; while trying
to be semi-secret about it so that they could maintain friendships with non-aligned firms.
Precarious as this all sounds, law firm networks have continued to grow and expand …
to the point of developing their own brands and technology — attempting to compete
with global firms. While they certainly haven't replaced those firms, there is an increased
understanding that any law firm intending to expand needs to carefully weigh the pros
and cons of which model suits them best. For example, while the Swiss verein model is still
prevalent in any list of global firms, it is no longer alone there. Chris Johnson in Am Law
Daily writes "the last two large-scale transatlantic combinations that required new holding
structures eschewed the verein in favor of a U.K.-law entity called the company limited by
guarantee (CLG)." One of these was Gowlings and UK firm Wragge Lawrence Graham &
Co. While vereins and CLGs are similar, according to Johnson and others, they "do differ
in one important area, however: Risk … at's because of a fundamental—if untested—
question of whether vereins are meant to be profit-seeking enterprises to begin with."
Johnson cites Aster Crawshaw, a professional practices expert at Addleshaw Goddard,
saying, "ere is a risk, albeit one that is dismissed by many Swiss lawyers, that if the verein is
used as the governance entity of a network whose members carry out commercial activities,
the verein could be deemed to be invalidly incorporated," he said.
As law firm networks become more and more formalized, they too will need to keep an
eye on any risks and conflicts that might come their way.
fortuna favet fortibus
OCTOBER 2017
VOLUME 19 NO. 1
EDITOR-IN-CHIEF
Jean Cumming
EDITOR
David Dias
SENIOR EDITOR
Elizabeth Raymer
ASSOCIATE EDITOR
Gena Smith
ART DIRECTOR
Brianna Freitag
COVER PHOTO
Jaime Hogge
DIRECTOR/GROUP PUBLISHER,
CARSWELL MEDIA
Karen Lorimer
BUSINESS DEVELOPMENT
CONSULTANT
Ivan Ivanovitch
CLIENT DEVELOPMENT
MANAGER
Grace So
ACCOUNT MANAGER
Kimberlee Pascoe
ACCOUNT EXECUTIVE
Steffanie Munroe
MARKETING & CIRCULATION
Mohammad Ali
PRODUCTION COORDINATOR
Joanne Richardson (416) 649-8818
joanne.richardson@tr.com
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