Joe Andrew, Global chair of Dentons, outlined the firm’s strategy in a recent video. It has two prongs: (1) Dentons maintains its status as the world’s largest law firm; while it simultaneously (2) becomes the world’s biggest independent law firm network. How can this be?
Dentons is a Swiss verein law firm —a single-branded network where member firms retain their own P&L as well as juridical independence but operate under a single brand. That’s not news. But what is news is Mr. Andrew’s intention that Dentons also serve as the glue that binds a far broader network of “collaborating” law firms (not practicing under the Dentons brand). The Dentons firm works closely with them in a meaningful way referring business back and forth. Dentons thus becomes the “super-member” of a multi-firm independent law firm network. And, in so doing, the Dentons firm does not incur the large administrative cost to integrate new firms into its own brand and can cherry-pick top independent firms to join its broader network. If it sounds like two bites at the apple, it does to me, too.
Mr. Andrew concedes that no firm — even his own — can be everywhere clients need it to be. And recent events highlighting the conflict issue for Dentons (and all large firms) as well as structural limitations of the Swiss verein make his hybrid approach all the more interesting — if not prescient.
Team Dentons has developed an even broader sphere of influence — as well as a “Plan B” in the event that it might have to disassemble its Swiss verein growth model.
A Tough Week and a Reprieve, of Sorts
Dentons is accustomed to dominating legal media sources because of its rapacious growth strategy. But last week saw the firm garnering press for a very different reason. Dentons, along with two of its individually named partners, was hit with a legal malpractice case (RevoLaze LLP vs. Dentons US LLP et al., case number CV 16861410, in the Court of Common Pleas, Cuyahoga County, Ohio). The case emanates from a prior conflict of interested imbroglio in a prior matter where Dentons represented RevoLaze in a patent suit against Gap, a long-standing Dentons client. Gap filed a motion to disqualify Dentons that resulted in a scathing Order entered by the presiding administrative law judge (ALJ) of the International Trade Commission (ITC). The ALJ determined Dentons indeed had a conflict warranting its disqualification and also could not rely on its Swiss verein structure to immunize it from the conflict since it held itself out as a unified global firm. And although the International Trade Commission just vacated the Chief Judge’s Order (Issued: April 12th; Filed: April 15th; Published: April 18th) the Swiss verein issue will survive in the malpractice claim. Don’t be surprised when the malpractice claim is settled or the next time the Swiss verein structure is attacked (the ITC’s Order to vacate provides a clear path forward for that).
Dentons was put under another harsh light in a recent article in The Lawyer, “Ghosts in Dentons’ Machine: Will the firm fall victim to its own acquisitions success. That piece exposes many of the integration and structural challenges the firm faces as a result of its breathtaking expansion. It also underscores the inherent weaknesses of the Swiss verein structure as an integrator, making particular note of the Dacheng acquisition.
A Network by any other Name?
Love them or loathe them, Dentons has, in remarkably short order, become a global brand. And while it might be best known for its size, geographical footprint, and/or its mastery of “making the deal,” it now is — on its own–a good-sized global network. But more than that, it has forged meaningful business ties — in the form of inbound and outbound referrals — with many law firms not practicing under the Dentons brand. Translation: Dentons has a far broader sphere of influence than its law firm members.
Dentons is two different law firm networks in one. So even if the Swiss verein structure should eventually fail and Dentons is forced to operate as a network of independent law firms, it could still be a significant market force.
Could this be one of the reasons why Dentons launched an IT incubator a few months ago? Stay tuned.
Conclusion
Dentons is a pioneer. Some trailblazers succeed while others (Clearspire comes to mind) are great, well executed ideas but not in sync with marketplace demand. Dentons has given itself two different paths to success. And that’s a good strategy by my reckoning.
This post was originally published in Law 360.
