This is the third in a series of four posts that consider the future of professional services networks.
The previous article in this series examined the obvious traditional benefits of professional services networks: the external value that they can deliver in terms of new clients, new instructions, and an expanded visibility and market presence. We focused on three specific components of external value: real synergy, referral potential, and competitive loyalty.
In this post, we introduce a concept that many professional services networks and their members overlook, but which will become increasingly important in the near future: internal value.
The internal value of membership in a professional services network has the potential to have a much greater positive impact on a law firm's bottom line than even a robust flow of referrals from other network members. In some firms it could be the compelling reason to join a network.
Currently, internal value is a largely unknown concept for most networks and their members. Everyone knows (or should know) how participation in a professional services network can deliver external value to a law firm. Law firms should now consider to what extent professional services networks could help them to increase the productivity and profitability of their internal operations.
This is especially true, we believe, for three types of networks: general practice networks with a regional focus; general practice networks consisting predominantly of small or midsize members; and specialized networks in areas such as tax or labor and employment. Nonetheless, any law firm member, of almost any size, could benefit from the greater internal value that network participation can -- and should -- deliver.
There is no universal strategy or set of best practices to build internal value for network members, not even in theory. Here are several examples that might help smaller members to implement internal systems and practices for which they individually might lack adequate staff and internal resources, but which, as part of a collective effort, could support substantial improvements in fee earner productivity, internal operating efficiency, and reduced operating costs:
- knowledge management
- specialized information technology applications
- client relations management
- quality assurance
- financial management and reporting
- human resources administration
- information security
- premises security
The leaders and professional managers of a network certainly have a role in suggesting new services to their members. To do so, network staff will need to learn much more about the strategic needs and internal operating issues of each member. Innovation presents challenges to the members, as well, because the driving force in new and better network services really should come from the members themselves. Members should not sit back and wait for network leaders to conjure up these new ideas.
Possibilities like the ones listed above imply a substantial shift in paradigms that have traditionally governed the perceptions of the purpose and value of professional services networks. We can expect the paradigm of external value to shift from being focused primarily on referral potential to the possibly decisive importance of synergy. Similarly, we should also anticipate that in the near future the concept of internal value will emerge to rival -- and in some instances surpass -- the traditional assumption that the primary purpose of a professional services network is to produce more and better fees.
Networks and their members need to expand their thinking about internal value as they move forward together in this era of unprecedented change in the legal profession.