Evolving relationships: Developing and growing an international alliance

A decade after the launch of Ius Laboris, executive director Sam Everatt discusses how the international alliance has developed and grown

Key takeaway points:

1. Although it is tempting to grow very quickly in the early days, expansion and member selection should always be a very careful process. Selecting the right members in the right jurisdictions is more important than the number of countries you cover.

2. Once the legal framework is established, the real work starts. How do you deliver projects and share knowledge? Having the right management structure is essential.

3. Technology never stands still, so innovative use of technology for members and clients is essential.

4. A true alliance is much more than a referral network. Knowledge sharing will benefit member firms and clients alike.

5. Quality control doesn’t stop once a member is selected to join the alliance. A thorough process that develops with the changing needs of the alliance is necessary to provide clients with the peace of mind that it can be relied upon wherever members are.

 

The saying ‘a week is a long time in politics’ may be true, but ten years is a long time in the legal sector. This certainly rings true for Ius Laboris because, with relatively small beginnings, the alliance developed much quicker than anyone could have anticipated.

In 2001, five European labour and employment firms launched our alliance. At the time, there were no other labour and employment alliances, so there was no one to benchmark against and there was a rapid learning curve for everyone involved.

Although founded on a clear business rationale, the early days of the alliance were, by necessity, less structured. However, after the first few months of growth and success, management had to evolve to incorporate the increasing needs of member firms and clients.

Just like the rest of the legal sector, the globalisation of employment legal services has been driving many changes for member firms. The alliance was created at a time when many international law firms were forming. Our founding members realised that there was a gap in the market for coordinated large-scale, international and specialised legal services in employment.

The early success of the alliance means that we can now bring to bear more employment lawyers than comparable international organisations. We currently have approximately 2,500 lawyers in 39 countries.

The flexible structure of an alliance allows firms to remain entrepreneurial and the low overhead model allows members to both compete with and complement international law firms.

From the outset, we decided to undertake a different way of doing business. We wanted to specialise only in labour and employment law, have one member firm in each jurisdiction and be more than just a referral network.

Growth strategy

Our original five-year vision looked forward to moderate growth in Europe and North America. So, much of our early focus was on finding new members in key jurisdictions.

We had the advantage of being the first to set up an alliance of this kind, so finding the right member firms was relatively straightforward. Indeed, many firms asked to join the alliance because they saw it as a credible way to offer international services to their clients. The principle of one member, one country, meant that firms were guaranteed exclusivity.

The alliance grew considerably, adding on average seven new members a year. The initial growth was rapid in Europe, followed closely by the Americas and then latterly in Asia.

However, growth has not always been easy. In some countries in southeast Asia, for example, employment law is not well established as a separate discipline, so finding the right firms has been more challenging.

Although we grew very quickly initially, the key factor in all the new firms joining was quality. Even during periods of high growth, we had a strong process of due diligence in place for selecting new members. This meant that member firms could be confident that the rest of the alliance would provide clients with the same quality of service they provided themselves.

The alliance developed much quicker than anyone could have anticipated. With this increasing size and growth came the need to manage the alliance in a more structured way.

Since 2007, the alliance has remained at around the same size and has instead concentrated on consolidation and organisation. This recent hiatus in expansion is not to say that expansion is no longer on the agenda though.

To this day, the alliance has a large number of countries that are asking to join, but we have made the conscious decision that growth will be where and when we want it.

Quality management

Quality has always been a core concept and, as such, we needed to ensure early on that with expansion came consistent quality among member firms.

When the alliance was small, quality was relatively easy to ensure because all of the firms were well known to each other. However, as we started to grow, we realised that quality had to be actively monitored and managed if we were going to achieve the desired standards.

In 2003, we launched a unique process that involved both self and peer assessment. More recently, we have brought on board a quality manager to streamline and manage the process from start to finish, bringing it online.

The quality process is an annual one that assesses activities ranging from legal services to billing practices.

For several years, we have run an academy aimed at senior associates from member firms. One of the tracks of the programme is aimed at equipping associates to manage international projects.

We have several internal tools to assist in the management of these international projects. We also have a cadre of internal project managers from all firms who can manage projects for clients across multiple jurisdictions.

The academy, our internal processes and approach to project management all contribute to assisting member firms. Ultimately, as a last resort if a member is not aligned with the alliance, the board has the authority to expel a member.

Funding collaboration

One of the key challenges for member firms has been learning how to successfully deliver projects together. It can be relatively straightforward to collaborate on one-off high-profile projects, but collaborating on know-how or other internal projects that may not have such a high profile can be more of a challenge.

The areas our projects cover range from producing multijurisdictional client guides on key employment law areas to IT projects (we have 12 internal IT projects running currently). Institutionalising these projects takes commitment from member firms and cannot be achieved by the headquarters team in isolation.

Aside from the commitment, these projects also require funding. The alliance funds itself on a financial model which uses a formula based on the turnover of member firms.

As companies have sought to reorganise internationally, the international services of labour law firms have been in high demand. Consequently, the alliance has been relatively fortunate during the financial crisis, with turnover annually increasing by six per cent year-on-year. In 2010, the total turnover of the member firms reached €550m.

This increase in turnover has resulted in an increase in funding for the alliance. Notwithstanding this increase, member firms have agreed to further modify our financial model to increase their investment. Consequently, the budget for the alliance has increased by 60 per cent over the past five years. This confidence and investment in the alliance has allowed it to make great strides in developing initiatives.

Flexible fees

Similar to the rest of the legal sector, our clients have been increasingly looking for flexibility in fees, albeit to a lesser extent because of the high demand for labour legal services. This has prompted us to develop a number of billing models that work well for clients in multiple jurisdictions.

For example, one global media brand has a global agreement with us covering 37 countries. The agreement provides the client with flexible pricing, but also takes away much of the demands of managing multiple jurisdictions. It is able to focus on managing the issues, rather than managing lawyers across 37 different countries.

The need for flexible pricing models is unlikely to change, so we will need to continue to innovate. However, this demand for efficiency is an opportunity, because providing international services through a model with low overheads ensures that we will be competitive.

Management structure

Today, Ius Laboris is far more than just a group of firms exchanging referrals: we are an alliance in the true sense of the word, as intended by our founders. Members collaborate on multinational projects and the quality of service is consistent across the alliance.

However, the size of the alliance and the greater sophistication of the collaboration between firms means that Ius Laboris is now managed in a more structured way than it was in 2001. This change has been the alliance’s biggest development in the past ten years.

Initially, there was virtually no central team to manage alliance initiatives. But, as it grew in size and ambition, it became clear that a greater degree of coordination and planning was required centrally.

The board is responsible for overseeing the management and direction of the alliance and each member firm has three partners on the board. This governance model ensures that all members have the opportunity to influence the alliance’s strategic direction and that the right checks and balances are in place.

The board devolves the day-to-day management of the alliance to the executive committee. As chairman of the alliance, Franco Toffoletto of Toffoletto e Soci in Italy chairs both of these two decision-making bodies.

The executive committee, with seven seats, meets every month in person or virtually through desktop conferencing to manage the alliance’s initiatives. As the executive director, I also sit on the executive committee and, together with the central team based in Brussels, implement and support many of our initiatives.

The organisation does not stop there, though. In addition to these management groups, we also have a number of sub-committees, each reporting to the executive committee and each composed of partners from across the member firms. It is through these sub-committees that many of our projects and initiatives are driven. We have found that this structured approach to managing the alliance has been essential in ensuring that there is a shared vision and that the initiatives within it develop as planned.

Future plans

A decade ago, the world was much smaller. With hindsight, our vision of growth in Europe and the rest of the world now seems modest. Events soon overtook our plans and, although the alliance has been concentrating on other projects for the past few years, new members are never far away.

The obvious restricting factor in growing the alliance is selecting the right firms for membership. Until recently, we managed projects in these jurisdictions through a network of best friends, and that has so far served us very well.

Naturally there are some countries where employment law is developing more rapidly and where future membership is more important. In order to allow for these differences and the disparate requirements of members, we have created a new category of firm called ‘affiliate’ and look forward to some interesting developments soon.

The second area that we are focusing upon is increasing the level to which firms collaborate with one another. We have a programme of internal projects to assist with member collaboration, focused on improving the IT platforms we use and also on the legal academy that we run for our senior associates.

The alliance has developed enormously over the past ten years. We are still learning and developing, but I have no doubt that we will evolve as much in the next decade as we have in the past.

 exdi@iuslaboris.com

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