The ability to manage complex and border-crossing mandates is paramount for international law firms. In order to circumvent the legal and functional challenges of a complete merger (one single firm), big international law firms have most recently appeared to opt for the association as an umbrella organisation. Six of the world\u2019s ten biggest law firms are constituted as an association according to Swiss law.<\/p>\n
A globally operating law firm, which may consist of dozens of national companies, requires flexible organisation in terms of its organs, their configuration and the distribution of competencies among them. At the same time, the firm wants to prevent a situation whereby its partners are liable for mistakes made by colleagues of theirs in other countries. International law firms aim to avoid the emergence of a cross-border liability community. The lack of legal ties between the members enables the national law firms to manage their mandates independently since they are exclusively subject to their individual national rules and regulations. Owing to its legally liberal organisation, the association satisfies all these requirements.<\/p>\n
The crucial point is that the association qua umbrella organisation merely serves as an organisational structure and instrument for organising management in the association and the cultivation of the \u201claw firm brand\u201d in a standardised way. To sidestep the danger of a legally inadmissible \u201ceconomic object\u201d in accordance with Swiss association law, entrepreneurial activities may strictly only be pursued by the member companies, not by the association. If the statutes of the association satisfy these requirements, the association satisfies the requirements of its legitimacy. Since the umbrella organisation constituted as an association does not make any economic profit in money or in kind, it does not pursue any economic object within the meaning of the law.<\/p>\n
Although an association consists of several legally and financially independent partnerships, it may still operate under one name in the market. A joint brand and a homogeneous market presence are an indication for potential clients that the law firm is capable of solving cross-border problems.<\/p>\n
To minimise the hazard of an inadmissible object, an association qua umbrella organisation must not pursue any operative business, nor must it cultivate relations with clients. In practice, the difficulty consists in configuring governance in the association in such a way that the national organisations are managed according to standardised criteria while the association limits itself to the provision of management stimuli and does not intervene in the national organisations\u2019 operative management. Services provided centrally for the national organisations are possible. Such services, such as umbrella marketing, but also controlling and IT, process design or advanced training for law firm staff, are indeed a necessary condition for the law firm\u2019s success in achieving a standardised market presence on the international stage.<\/p>\n