Ideas from the Front
Consorting Is a Good Thing
Through Consortiums, Firms Can Expand Offerings While Maintaining Independence
Posted Mar 1, 2004 3:20 AM CDT
By Martha Neil
A little over a decade ago, a Portland, Ore., law firm found itself at a crossroads. More and more of the firm’s corporate clients were starting to need help outside its geographic area.
To service its clients, the firm, now known as Bullivant Houser Bailey, had to be ready to handle work wherever it arose. Yet partners were reluctant to overcommit financially by opening a slew of satellite offices. Merging with another firm seemed like a possible solution, but one with the potential to jeopardize the firm’s cherished, close-knit working environment.
Instead, Bullivant Houser chose a path that has become increasingly popular: It joined a law firm consortium. Allying itself with other, similarly situated law partnerships allowed the firm to offer clients high-level legal services anywhere they were needed, while simultaneously maintaining its unique firm identity.
Today, Bullivant Houser remains a member of Multilaw, a London-based consortium of some 60 law firms in more than 100 locations around the world.
“It’s been a way for us to be a kind of virtual Clifford Chance or Baker & McKenzie,” says Bullivant Houser partner Kimball H. Ferris. “We’re dealing with a shrinking world, and business is typically multinational and diverse. Law firms need to be able to assist their clients not just in the local market.”
In addition to giving midsize and small law firms the depth to compete with megafirms, consortiums also cost clients less, says Manuel “Manny” Sanchez. A Chicago litigator, he is a name partner in Sanchez & Daniels, which joined The Harmonie Group about six years ago. Consortiums can offer the same level of service as one large firm, he says, but “at a much more reasonable hourly rate.”
Independence also motivates firms to join consortiums, says legal consultant Austin G. Anderson of Ann Arbor, Mich. His consulting firm administers the Network of Leading Law Firms, a 9-year-old consortium of midsize firms in 15 states and eight foreign countries.
NLLF’s typical members, says Anderson, are “interested in providing service without having to become a part of a larger legal entity. Maintaining their independence is very important to them.”
Building Solid Relationships
Law firm consortiums are not an entirely new phenomenon; some of the early networks have been around at least 15 to 20 years. But they’ve never been as popular as they are today, says Anderson, who estimates that approximately 200 now exist.
Most function as referral networks between member firms. Those referrals are especially reliable, Ferris says, because member firms are approved after a lengthy screening process, and evaluated on an ongoing basis. “It’s like working with someone who has been given a Good Housekeeping Seal of Approval,” he says. “And you’re getting a personal relationship and trust-building on top of that.”
Consortiums range in size from small groups to networks of more than several hundred firms. Some networks focus on specific practice areas, while others want members to do a wide variety of legal work.
The level of participation also varies, says Sally J. Schmidt, whose suburban Minneapolis consulting firm, Schmidt Marketing, administers several consortiums. At one end of the spectrum are loose associations that meet only once or twice a year and function primarily for referrals. At the other end are groups that meet monthly, share legal research and develop group marketing programs.
To get full benefit from a consortium--and from the annual fee, which can top $30,000--a firm should appoint one lawyer to spend significant time on its activities, Schmidt says. Then, results take time. “You have to be prepared to wait at least three to five years,” she says, “before you really start to see your investment pay off.”