Safety in Networks

by Emmett Berg

Law firms have been using referral networks and alliances to help with business development for decades. But lately these have become indispensable for small and midsize firms striving to bulk up their size and strength in the face of a tough economy.

In fact, the International Society of Primerus Law Firms - which is based in Grand Rapids, Michigan, and caters to smaller practices?has seen its membership grow by about 40 percent over the past year, reaching 140 firms at the start of 2010, says President John Buchanan. The story is similar at Minneapolis - based Meritas Law Firms Worldwide: Few firms joined in 2007, says President Tanna Moore. But she reports 57 inquiries in 2008, and more than 80 by the third quarter of 2009.

"There are 10 to 15 [networks] in the top tier, and man, you got to get in one," says Bob Weiss of Denver, a marketing consultant for small and midsize firms. "In most markets they're coveted, and you don't want to lose your network partnership because it will cost you money."

That's because networks refer business back and forth, generally without the fee-sharing and ethics rules typical of co-counseling alliances. Annual dues can range from $1,000 to $25,000, Weiss says, and many of the networks are specialized. Most include California lawyers and law firms, and some span regions or continents.

While Primerus operates in English-speaking countries, for example, Meritas caters to midsize firms in 60 nations. Los Angeles-based Interlaw has an international network of local firms that speak reliable English; its newest member firms are in Vietnam and Indonesia. "We've seen robust growth," says Regina McConahay, Interlaw's director of global markets, citing the "diversity and flexibility" that networks give firms.

Indeed, nearly half of the small and midsize firms in the United States belonged to networks as of 2008, up from 32 percent in 2006, according to a survey by Weiss's Alyn-Weiss & Associates. Further, nearly half of the surveyed firms reported gaining "substantial" business through networks?equivalent to opening another office, but without the overhead costs.

Hugh McCabe, a partner at Neil Dymott in San Diego, which belongs to Primerus, confirms as much. "When you get involved, it does clearly translate into new business, new clients, and new areas of practice for your firm."

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