Multidisciplinary professional services networks

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Table of multidiciplinary networks from websites. Multinetworks.PNG
Table of multidiciplinary networks from websites.
Multidisciplinary professional services networks
Purpose multidisciplinary approach
professional services network
Membership
Alliott Group
MSI Global Alliance
Morison International
Geneva Group
International Practice Group
WSG - World Services Group
Russell Bedford International

Multidisciplinary professional services networks are organizations formed by law, accounting and other professional services firms to offer clients new multidisciplinary approaches solving increasingly complex issues. They are a type of professional services network which operates to provide services to their members. They operate in the same way as accounting firm networks and associations and law firm networks. They do not practice a profession such as law or accounting but provide services to members so they can serve clients needs. Their aim is to provide members involved in doing business internationally with access to experienced, tried and tested, reliable, and responsive professional advisers who know their local jurisdiction intimately as well as the intricacies of cross border business.

Contents

There are 10 multidisciplinary networks. The largest are: Alliott Group, MSI Global Alliance, [1] Morison International, [2] Geneva Group, [3] International Practice Group, [4] WSG - World Services Group and Russell Bedford International. [5] These networks have more than 100 member firms in as many as 90 countries in hundreds of offices. The members employ thousands of professionals.

History

Multidisciplinary networks are not new but found in a number of professions. They became important during the end of the 1990s when the accounting firms began to expand to the legal profession. The history is well documented. [6]

The American Bar Association Commission on Multidisciplinary Practice refers to five multidisciplinary models. [7] They are the cooperative, command and control, ancillary practice, network and multidisciplinary partnership models.

Big Six accounting firms – multidisciplinary practices

The multidisciplinary issues first arose in the 1940s but was dealt with by the American Bar Association prohibiting lawyers working for accounting firms to represent clients before the IRS. [8] The foundation of multidisciplinary practice began when the Big 4 accounting firms reached their natural growth limits. Accounting, auditing and tax services could generate only a finite amount of revenue for the Big 6. The Big 4’s concept was simple: use the extensive list of clients to market non-traditional accounting services such as legal, recruitment, risk management, technology consulting, etc. The objective was to bring these non-traditional services “in-house” using the time-tested network model.

Having reached their natural limit on growth the Big 4 branched out to become multidisciplinary in legal, technology, and employment services. Since the essential infrastructure was in place, it was thought to be relatively simple to incorporate other services into the existing network. The expansion could easily be financed using revenue from the traditional services. As a network, it was natural to create independent entities in these other professions which themselves could be part of the network. The method and structures varied from firm to firm but the fundamental premise was the sharing of revenue between lawyers and accountants.

The accounting firms were initially very successful in creating these alternative businesses. Soon a number of Big 6 firms had multi-billion dollar technology consulting businesses. Other services were more difficult to bring in-house. Some, like legal services, demanded a different approach because of ethical considerations. The key factor among such different approaches is an internal control system within a firm.

The initial to expand to legal services focus was on the United States which represented the largest potential market for these services. In Europe and South America the bar rules were not as developed as in the United States, and therefore did not restrict the sharing of revenues. The basis for this expansion was the law firm network that established under the umbrella of the Big Six. [9] The issues were sharing profits with accountants and other professionals and the possible conflicts of interest.

When the Big 6 began its expansion to the legal profession, it was met with fierce opposition from law firms and bar associations. [10] Lawyers saw that the accounting profession would subsume the legal profession with its vast resources. [11] Commissions, panels and committees were established by legal and accounting firms to argue their positions. The American Bar Association established committees and taskforces to address the issue, but the problem spread outside of the United States, first to Europe but then to other countries where lawyers were not protected from this new foreign competition. [12] Government agencies were enlisted. For more than five (5) years the debate escalated.

This movement ended abruptly with the fall of Arthur Andersen as a result of its association with Enron. Sarbanes Oxley followed, which effectively ended this trend of multidisciplinary networks established by the Big 5.

Enron and Sarbanes–Oxley

There was, however, a fatal flaw in the multidisciplinary network concepts of the Big 6. The raison d’etre of the Big 6 was to audit public companies. Each service which is provided to an audited client contained an inherent conflict of interest. This conflict was illustrated by the perfect storm created by Enron. The additional services that Arthur Anderson was offering created a conflict in their role as the auditor. Multidisciplinary networks by the accounting firms were DOA. The final nail in the coffin was Sarbanes Oxley which meant that the accounting firms had to divest their consulting practices. [13]

Multidisciplinary networks today

The multidisciplinary network model was not dead but transformed to account for the issues. If the member firms were themselves independent, there was no prohibition on having a multidisciplinary network. This was recognized by the ABA. [14]

Today there are at least eleven networks. The largest are in the legal and accounting professions. A few of the legal and accounting networks include investment banking. The primary networks are focused on tax, employment, intellectual property, insurance and immigration.

See also

Related Research Articles

Arthur Andersen LLP was an American holding company based in Chicago. Formerly one of the "Big Five" accounting firms, the company had provided auditing, tax and consulting services to large corporations. By 2001, it had become one of the world's largest multinational businesses.

The Big Four is the nickname used to refer collectively to the four largest professional services networks in the world, consisting of the global accounting networks Deloitte, Ernst & Young, KPMG and PwC. The four networks are often grouped together for a number of reasons; they are each comparable in size relative to the rest of the market, both in terms of revenue and workforce; they are each considered equal in their ability to provide a wide scope of professional services to their clients; and, among those looking to start a career in professional services, particularly accounting, they are considered equally attractive networks to work in, because of the frequency with which these firms engage with Fortune 500 companies.

KPMG Multinational professional services and accounting company

KPMG International Limited is an Anglo-Dutch multinational professional services network, and one of the Big Four accounting organizations.

In its most general sense, the practice of law involves giving legal advice to clients, drafting legal documents for clients, and representing clients in legal negotiations and court proceedings such as lawsuits, and is applied to the professional services of a lawyer or attorney at law, barrister, solicitor, or civil law notary. However, there is a substantial amount of overlap between the practice of law and various other professions where clients are represented by agents. These professions include real estate, banking, accounting, and insurance. Moreover, a growing number of legal document assistants (LDAs) are offering services which have traditionally been offered only by lawyers and their employee paralegals. Many documents may now be created by computer-assisted drafting libraries, where the clients are asked a series of questions that are posed by the software in order to construct the legal documents. In addition, regulatory consulting firms also provide advisory services on regulatory compliance that were traditionally provided exclusively by law firms.

Financial audit

A 'financial audit' is conducted to provide an opinion whether "financial statements" are stated in accordance with specified criteria. Normally, the criteria are international accounting standards, although auditors may conduct audits of financial statements prepared using the cash basis or some other basis of accounting appropriate for the organisation. In providing an opinion whether financial statements are fairly stated in accordance with accounting standards, the auditor gathers evidence to determine whether the statements contain material errors or other misstatements.

Deloitte Touche Tohmatsu Limited , commonly referred to as Deloitte, is an Anglo-American multinational professional services network. Deloitte is one of the Big Four accounting organizations and the largest professional services network in the world by revenue and number of professionals, with headquarters in London, England.

A law firm is a business entity formed by one or more lawyers to engage in the practice of law. The primary service rendered by a law firm is to advise clients about their legal rights and responsibilities, and to represent clients in civil or criminal cases, business transactions, and other matters in which legal advice and other assistance are sought.

Grant Thornton LLP is the American member firm of Grant Thornton International, the seventh largest accounting network in the world by combined fee income. Grant Thornton LLP is the sixth largest U.S. accounting and advisory organization. The firm operates 59 offices across the US with approximately 8,500 employees, 550 partners, and produces annual revenue in excess of US$1.9 billion.

Professional responsibility is the area of legal practice that encompasses the duties of attorneys to act in a professional manner, obey the law, avoid conflicts of interest, and put the interests of clients ahead of their own interests.

The Public Company Accounting Oversight Board (PCAOB) is a nonprofit corporation created by the Sarbanes–Oxley Act of 2002 to oversee the audits of public companies and other issuers in order to protect the interests of investors and further the public interest in the preparation of informative, accurate and independent audit reports. The PCAOB also oversees the audits of broker-dealers, including compliance reports filed pursuant to federal securities laws, to promote investor protection. All PCAOB rules and standards must be approved by the U.S. Securities and Exchange Commission (SEC).

A law firm network is a membership organisation consisting of independent law firms. These networks are one type of professional services networks similar to networks found in the accounting profession. The common purpose is to expand the resources available to each member for providing services to their clients. Prominent primarily law firm networks include: CICERO League of International Lawyers, First Law International, Alliott Group (multidisciplinary), Lex Mundi, WSG - World Services Group (multidisciplinary), TerraLex, Meritas (law), Multilaw, The Network of Trial Law Firms, Inc., the State Capital Group, and Pacific Rim Advisory Council. The largest networks have more than 10,000 attorneys located in hundreds of offices worldwide.

Crowe Global

Crowe Global, commonly referred to as Crowe, previously Crowe Horwath International, is a multinational professional services network. It is the 9th largest such global accounting network in the world. The network consists of more than 220 firms with over 42,000 employees in 130 countries.

Law practice management (LPM) is the management of a law practice. In the United States, law firms may be composed of a single attorney, of several attorneys, or of many attorneys, plus support staff such as paralegals/legal assistants, secretaries, and other personnel.

SyCip Gorres Velayo & Co.

SyCip Gorres Velayo & Company is a Philippine multidisciplinary professional services firm.

Professional services network Networks of independent firms that offer services to companies in an organized manner

Professional services networks are business networks of independent firms who come together to cost-effectively provide professional services to clients through an organized framework. They are principally found in law and accounting. They may also be found in investment banking, insurance, real estate and architectural services. Any profession that operates locally, but has clients in multiple locations, are potential members of a network. This entry focuses on accounting, legal, multidisciplinary and specialty practice networks. Today members of these networks employ more than one million professionals and staff and have cumulative annual revenues that exceed $200 billion.

An accounting network or accounting association is a professional services network whose principal purpose is to provide members resources to assist the clients around the world and hence reduce the uncertainty by bringing together a greater number of resources to work on a problem. The networks and associations operate independently of the independent members. The largest accounting networks are known as the Big Four.

World Services Group

WSG, also branded as World Services Group, is a multidisciplinary professional services network of independent law, accounting and investment banking firms. It ranks as one of the largest among the more than 200 professional services networks in the world. WSG members are independent law, accounting and investment banking firms. According to the organization's website as of 2016, WSG was formed in 2002 as a multidisciplinary network. Its members have more than 19,000 professionals in more than 115 countries in almost 400 offices. Its global headquarters are located in the Houston, Texas,

The Alaska Bar Association is a mandatory bar association responsible for the Alaska Supreme Court and for the admission and discipline process of attorneys for the state of Alaska.

Alliott Global Alliance is an alliance of independent professional services firms including accounting firms, law firms, audit firms and other specialist services providers. The association was established in 1979 and comprises 194 member firms in 230 cities across 80 countries.

Morison KSi

Morison KSi is a global association of professional service firms. The association has over 150 member firms in more than 80 countries. Morison KSi's status as an association is in accordance with the International Federation of Accountants (IFAC) audit code and the EU Statutory Audit Directive 2006/43/(EC). Morison KSi is ranked by the International Accounting Bulletin as the 9th largest accounting association in the world. In January 2020, the combined revenue of all member firms was USD956m.

References

  1. ↑ "MSI". MSIGlobal.org. Retrieved 16 April 2017.
  2. ↑ "Morison KSi - Morison International and KS International have merged to form Morison KSi". MorisonInternational.com. Retrieved 16 April 2017.
  3. ↑ "Home". GGI.com. 3 December 2015. Retrieved 16 April 2017.
  4. ↑ "404". IPG-online.org. Retrieved 16 April 2017.
  5. ↑ "Russell Bedford global accounting network - CPA firm association - Audit - Tax - Consulting". RussellBedford.com. Retrieved 16 April 2017.
  6. ↑ Mijares, A H, The SEC’s ban on Legal serves by Audit firms: Amendments to Rule 2.01 of Regulations S-X under the Securities and Exchange Act of 1934. 36 U.S. F. L. Rev 209–236 (2001).
  7. ↑ American Bar Association Commission on Multidisciplinary Practices, Final Report, Appendix C, Reporter’s notes, July 2000
  8. ↑ ABA Information Op. 269 (1944)
  9. ↑ These networks had names like the E&Y Legal Network, Andersen Legal Network and Landwell. Only Landwell remains with 6 member firms. Countries in the Landwell network
  10. ↑ Jacobs, “Accounting Firms Covert Forbidden Fruit: Piece of the U.S. Legal Market, Wall Street Journal,” p.B1 (May 31, 2000), Poe, “Multidisciplinary Practice,” Defense Counsel J. 245 (Apr. 2000), Cannon, “The Big Six Moves In” 50 Int’l Fin. L. Rev. 49 (October 1997), “Andersen’s Giant Step Towards World Law” Australian Fin. Rev. 33 (Jan. 1998), Rubenstein, (Accounting Firm Legal Practices Expand Rapidly. How the Big Six Firms Are Practicing Law in Europe: Europe First and then the World?” Corp. Legal Times 1 (Nov 1997).
  11. ↑ In 2011, the UK House of Lords completed an inquiry into the financial crisis, and called for an Office of Fair Trading investigation into the dominance of the Big Four. Adam Jones, Auditors criticized for role in financial crisis, Financial Times, 30 March 2011
  12. ↑ McGarry, S. Multidisciplinary Practices and Partnerships, American Lawyer Media Publishing, 2002
  13. ↑ Corporate and Criminal Fraud Accountability Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (2002).
  14. ↑ "Commission on Multidisciplinary Practice - The Center for Professional Responsibility". AmericanBar.org. Retrieved 16 April 2017.
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