Making Coordination Fees Explicit in Multi-Jurisdictional Legal Matters
“If someone takes over the coordination in a difficult case with various jurisdictions, I support that, and I tell to my client, listen, this work is so important, has to be paid. So there must be a budget for the coordination only, especially if various jurisdictions are involved.”
The Cost and Regulation Framework
Peter Ruggle cuts through the aspirational rhetoric about international legal collaboration with two decisive factors. “What kind of alternative model you choose depends on the costs,” Ruggle explains. “As a lawyer, we are also entrepreneurs. We have our employees, we have our cost at the end of the month. So we have to consider cost.”
But cost alone doesn’t determine the model. “And also the second point, we are working or living as a lawyer in a very regulatory space. So these two factors are decisive,” Ruggle argues. The regulatory dimension shapes everything from referral fee arrangements to how firms can structure cross-border relationships.
The hierarchy that emerges from these constraints is straightforward: “So if you choose a representative office, that is most expensive. If you choose only an alliance network, that’s less expensive. If you choose a legal tech platform, that might be very favorable in terms of costs.” But the regulatory overlay complicates these calculations: “And certainly when it comes to the regulatory area, you have to see what kind of services are you providing? How do you collaborate? What is possible back and forth? We have to be careful in that respect.”
This framework challenges firms to match their collaboration model to their actual capabilities and constraints rather than their aspirations. A Swiss firm can’t simply replicate an American network model if Swiss regulations around referral fees or professional structures differ fundamentally. Ruggle’s position suggests that successful international collaboration starts with understanding local limitations, not global possibilities.
The Swiss Verein Paradox
Ruggle brings a unique perspective on the Swiss Verein model that has become popular in international legal networks. His analysis begins with cultural and historical context that most discussions omit.
“When I heard that and read about that, that this is obviously in focus of some law firm, I was laughing,” Ruggle admits, “because the Verein, that means an association, is here in Switzerland one of the… It’s a tool of… A most democratic tool. It’s part of our democracy, not only the voting, participating in votes, and referendums, but the freedom of joining an association and being part of an association is on the same level as the freedom of speech.”
The historical significance runs deep: “The association is something which is really… that’s why I made back this historical view, it was because the association was the founder of our Switzerland, because without any associations, even the athletics associations were part in our democratic movement, because people gathered together to do some sports and said we need to have a democratic structure. That was 200 years ago.”
The flexibility of the Verein structure is considerable: “Association is an interesting thing because it’s, as I said, it’s democratic, but you can adopt, amend the structure that some people can vote more or less. This is a very flexible structure when you try to organize your network.” Ruggle points to FIFA as an example: “The best example is the FIFA, the World Football Association, is an association according to Swiss law. And you see that the structures are not democratic at all, so you can change it.”
But the tax challenge undermines much of this flexibility. “Where the issue is, we have to be careful in that respect,” Ruggle warns. “Whenever you have physical equipment office, people working or whatever, you are taxed. You are taxed.” The dream of tax optimization through the Verein structure often proves illusory: “And if you try to get a tax exemption, that’s nearly not possible because you’re not a charitable organization when you try to set up a network and go back and forth with referral fees. That would not work.”
The legal framework that makes Verein attractive—minimal regulation with just “about eight or ten articles about the association” in Swiss Civil Code—also creates flexibility that others can exploit. But Ruggle suggests this flexibility doesn’t solve the fundamental problem of taxation when real business operations occur.
Making Coordination Visible and Billable
Ruggle argues for explicit recognition of coordination work as a distinct service category. “If someone takes over the coordination in a difficult case with various jurisdictions, I support that, and I tell to my client, listen, this work is so important, has to be paid,” he explains.
The principle extends to budgeting: “So there must be a budget for the coordination only, especially if various jurisdictions are involved.” This isn’t about padding bills—it’s about making invisible labor visible. Multi-jurisdictional matters don’t coordinate themselves. Someone must manage time zones, reconcile conflicting legal advice, maintain client communication, and ensure different jurisdictions’ work streams align.
The alternative—absorbing coordination costs into hourly rates or treating it as business development—creates perverse incentives. Firms avoid complex international matters because the coordination burden isn’t compensated. Or worse, coordination suffers because no one is explicitly responsible and paid for it.
Ruggle’s position also addresses quality control. When coordination is explicit and budgeted, someone has clear authority and responsibility for the overall matter. When it’s implicit, coordination becomes everyone’s job and therefore no one’s job.
The recommendation challenges common client expectations that coordination is simply part of legal service. Ruggle suggests it’s a specialized skill that deserves recognition and compensation, particularly as matters span more jurisdictions and legal systems.
Navigating Referral Fee Prohibitions
Ruggle addresses one of the most sensitive topics in international legal collaboration: how lawyers compensate each other when direct referral fees are prohibited. In Switzerland, “referral fees are not allowed,” he states clearly. The prohibition creates a conflict of interest concern that regulators take seriously.
But Ruggle acknowledges the gap between regulation and practice: “I’m not going to disclose what we are doing here, but we have to find other models.” The admission is revealing—not as an endorsement of evasion, but as recognition that legal practice evolves mechanisms to sustain necessary relationships even when direct compensation is prohibited.
His preferred approach emphasizes transparency in a different dimension: “I really like to work with quotes, with quite good quotes, with elaborated quotes, paid quotes. I also said, listen, when you provide me with a quote which is three, four pages long, this is paid.” The strategy shifts from referral compensation to paying for actual work—quotes, analysis, preliminary research.
“And certainly also with caps,” Ruggle adds. “You can discuss it, but transparency in cost. And then if my foreign colleague adds something that I do not care, I don’t know it.” The approach suggests that well-documented, substantive work can serve the same relationship-building function as referral fees while remaining compliant with professional regulations.
The tension remains unresolved, but Ruggle’s framing suggests that creative compliance through legitimate service provision may be preferable to either ignoring prohibition or accepting that cross-border relationships can’t be sustained without compensation.
Cultural Calendars and Mutual Respect
Ruggle brings the discussion to what he describes as “the most important thing at the end of the day”—respect across cultural differences. “We have to learn to understand that when Chinese New Year happens, nobody is reachable,” he explains. “That’s it. When we have Christmas break, forget about that. And things like that. We have to tell that to our clients.”
The principle extends beyond holidays to fundamental working styles: “At the end of the day, from my perspective, personally said, it’s the respect which has to be observed, respect to each other, respect to the needs of each other. We are all lawyers. We are all human beings. We have clients. We have other clients. We have deadlines. We have specific deadlines. We have specific issues in our countries and everywhere.”
This respect framework addresses a practical challenge in global legal work: the expectation of 24/7 availability that ignores cultural and personal boundaries. “In this respect, we have to learn to understand that when Chinese New Year happens, nobody is reachable. Forget about that. Just forget about that. That’s it,” Ruggle emphasizes.
The repetition—”forget about that”—underscores his conviction that pushing against cultural calendars is both disrespectful and futile. Better to plan around them than pretend they don’t exist. “We have to tell that to our clients. We have to learn that. And I think that is the most important thing at the end of the day, because we transfer that to the client and explain, listen, it’s Chinese New Year. Forget about that. Just forget about that. That’s it.”
Ruggle’s framework suggests that sustainable cross-border relationships require explicit boundary-setting and client education. The alternative—lawyers burning out trying to bridge incompatible time zones and cultural expectations—serves no one’s interests.
About the Speaker: Peter Ruggle is the Founder of Ruggle Partner, a Swiss law firm, with over 36 years of legal practice. Ruggle’s expertise spans corporate finance, banking law, and alternative dispute resolution. He has made significant scholarly contributions including authoritative commentaries on the Swiss Code of Obligations and Swiss Code of Civil Procedures. Ruggle has also contributed to IBA publications on mediation techniques. His practice provides him with deep insights into how Swiss legal frameworks, including the Verein model, function in international contexts and the practical challenges of coordinating multi-jurisdictional legal matters.
