Global legal services 'shift away from corporate model'
The launch of a free referral system by Dentons signals the weakening of the global firm model and the rise of the legal network, the chairman of InterLaw has said.
The comments made by InterLaw chairman Michael Siebold were made in response to Dentons' launch of NextLaw, a free referral network that allows firms to connect via a technology platform.
In announcing the launch, Dentons global chairman Joe Andrews positioned the new system as a competitor to existing paid-membership networks like InterLaw or TerraLex.
"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," he said.
"Nextlaw Global Referral Network is different because it is free, so clients will get the best lawyers for their need, without exception."
However, Mr Siebold told Lawyers Weekly the new network was "no threat" to existing global networks, and indeed strengthened the network model.
InterLaw has over 75 member states, of which the only Australian firm is Hunt & Hunt.
"Our first reaction was if the largest law firm in the world can introduce a network, that is good for all legal networks – it shows the model is appreciated and proven," he said.
In his view, the announcement is part of a larger change within the legal services market, which has seen large global firm models fall out of favour.
"Dentons' announcement to invest in a global network is further evidence of the shift to delivering global legal services outside of the traditional corporate model," he said.
"The difficulties of uniting disparate offices together under a corporate banner, as well as challenges around consistency and quality of service are well documented. So, the fanfare with which Dentons has announced its plans should be seen as a ringing endorsement for networks."
Nonetheless, he emphasised that in his view the NextLaw offering is a "pale imitation" of a network such as InterLaw.
He suggested the benefit of a membership to InterLaw is the high-level of quality control, with members extensively vetted prior to joining and facing three-yearly checks after becoming members.
If complaints are made against a member firm, the network will attempt to mediate.
"That happens very rarely and in cases where we've needed to, we have asked members to leave, that were no longer up to the standards that over 35 years Interlaw has set," he said.
Dentons also proposed a vetting process for its new network, with chief executive officer Elliott Portnoy suggesting members would be approved "practising lawyers and former general counsel".
However, Mr Siebold questioned how a network with no membership fees might conduct quality control on its members.
"How can they vet the thousands of firms they want to have join the free network and keep quality control if there is no budget?"
Another difference Mr Siebold pointed to is that InterLaw firms are encouraged to work together on matters and develop a personal relationship.
"What differentiates us in being a close network is that it’s not anonymous," he said.
"We all know each other personally and we know each other quite well."
By contrast, he suggested, NextLaw was merely a "referral network" with little collaboration beyond sending work to another lawyer.
Mr Siebold also defended the membership fees of InterLaw, which he emphasised are funnelled back into the not-for-profit business.
"To characterise that as 'pay to play' misses the point. Membership dues – which are not very considerable in our case – are simply there to pay for the lean administration, mostly marketing and business development," he said.
According to a statement from Dentons, the new network will target 90 per cent of the world's legal market.
The firm, currently known as the world's largest, is seeking to capitalise on the large number of referrals that come through its door. According to the statement, Dentons referred work to more than 1,000 firms last year alone and received 500 in-bound referrals.