through single ownership; each conducts business for clients competing in common markets or industries, so cross-border referrals between partners can lead to potential conflicts of interests in the portfolio of clients they represent.
Dev K. Boojihawon 119
were established. For instance, AccentUK experienced conflicting cultures among collaborating agencies, although this was not an issue at the start.
Contactpoint faced difficulties in maintaining consistent quality in creative outputs and Finewaters had to continuously handle its partners’ insecurities in order to internationalize further. In general, there is limited empirical evidence in the literature that examines the post-managerial and organizational implica- tions once network relationships are established. From a practical viewpoint, the management of established network relationships is instrumental to the firm’s success and warrants more attention. Managers must be astute when international partners are negotiating for greater control of shared projects.
Relatedly, they must understand the issues linked to managing relationships in cross-cultural contexts as well as how to secure their advantage in multiple complex relationship structures.
International entrepreneurship and network dynamics
The cases illustrate that growth prospects in international networks rely on network dynamics. In all three scenarios, international expansion was unstruc- tured and relied on a mixture of serendipitous events occurring through interaction and the entrepreneurial ability of the firm’s management to take advantage of such opportunities. For AccentUK and Finewaters, international expansion was achieved through the member agencies’ own initiatives and intelligence to make proactive use of established network relations (via BRUSSELINKS or Creative Partners), or through cross-referral based on inter-firm agreements. Similarly, Contactpoint relied on clients’ cross-referrals from its parent, or pitched for new projects on its own. As such, this study supports the findings of Coviello and Munro (1995, 1997) and Chetty and Blankenburg Holm (2000) that network relationships create synergistic ben- efits for member partners, but there is limited evidence here to suggest or identify processes of how entrepreneurial initiatives are pursued and realized beyond their initial stages. Related to this, managers must understand the benefits and risks associated with externalizing their businesses or projects with overseas partners. This is crucial for service firms like SMAs since they trade off their control for shared profits, potentially weakening their position in a relationship.
Throughout, this chapter has emphasized that network relationships are dynamic and the cases also illustrated that such relationships changed with the circumstances underpinning them. The interesting illustration here is that of Finewaters which moved from interdependently supporting the GM Daewoo brand across Europe to eventually creating its own independent international network to further its international capability. Network relationships change continuously with circumstances, and such change affects the nature of opportunism inherent within them. The managers of small firms need to
understand how to manage this change process consistently to the firm’s advantage.
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8
Cross-border Management Issues in International Law Firms
Susan Segal-Horn and Alison Dean
Introduction
This chapter focuses on the organizational changes arising from the creation of large cross-border legal service organizations and alliance networks. We address the management issues faced by legal professional service firms (PSFs) in responding to the demands placed upon their existing organizational structures and processes by the most recent phase in their international expansion. This phase of their growth has been intended to implement global strategies and to create global organization structures. In particular, our findings relate to the larger law firms for whom the requirement to build integrated global networks is a competitive and client expectation. To put the issue of firm size into perspective, the largest UK law firm at which we conducted interviews operated in 24 countries, had over 350 partners (of whom nearly 50 per cent were located outside the UK) and had fee income in excess of £450 million; a smaller firm studied still operated in 15 countries, had almost 3000 professional staff and over 300 partners, with fee income in excess of £280 million.
Arising from this focus on larger firms is a set of issues that involve unlocking managerial, cultural and organizational barriers to integration across jurisdictions. The work described here is part of an ongoing study of the globalization of UK City law firms. Sample firms have taken different routes to globalization, either growth by acquisition or growth via alliance building and networks. These approaches do not appear to be country specific; they are firm specific. Despite this, there is significant similarity in the mechanisms adopted for the development of cross-border integration of activities and integration of organizational practices and cultures across national boundaries and legal juris- dictions. In this chapter, we use data from two top 10 firms that had pursued different routes to international expansion: one by acquisition, the other by building an alliance network. Interestingly, subsequent to our data collection,
the network builder had begun consolidation by finalizing outright acquisition of many of its long-term international network partners.
Law is an under-researched industry. This research adds to knowledge of the legal services industry, explores globalization in a PSF context and further extends the global strategy literature into the services domain.