Professional Service Firms?

Let’s be clear what we are talking about.

Historically, this title would have applied only to the professions: law, medicine, accountancy, surveying, actuarial and chartered engineers, and the compass was constrained to a route to market by a long and often quite intense period of study.

Today, and with the advent of the ubiquitous management consultant, Social Media (SM) guru or outsourcing resource, the compass has grown to the point where no longer, I would conjecture, does the title apply to a select few. I accept that it is straining the meaning somewhat but reverse it for a moment: a SM expert by profession or a consultant by profession. This is not just semantics but it is important to recognise that, leaving to one side the regulations that govern a profession (law and medicine being heavily regulated), the market is perhaps more diverse than a first blush consideration would indicate.

Winning work

The one common denominator is that all professional service firms (PSF) – either the vanilla or extended version (if you accept my definition) – all want to acquire or develop relationships with profitable clients – and who wouldn’t! No clients, no revenue, no firm etc etc.

In an ideal world PSF will look to mirror their core message with the client’s culture and indeed clients will very often look for a firm that gives them a certain position, status or kudos in the market. A great deal of time, effort, sweat and tears will be invested in this process. My own view is that a PSF should distinguish itself form a (simple) supplier – like say a stationary company or somebody providing drinks/beverages – and should seek to position itself as an extension of the business, so that, over time, the PSF and the people doing the work begin to sound and look like the client. This is not to say that they should behave in a way where the client is told what they want to hear but so that when representing the client, the PSF properly represents its core message and brand.

The past

By and large all professional service firms are steeped in history and, almost to a practice, each one started off bearing the name(s) of its founding fathers (female partners would have been a bit thin on the ground!): Smith, Braithwaite and Smith would literally have meant Messrs Smith, Smith & Braithwaite setting up in practice – usually a high street practice – catering for a reasonably select client base. When I say “reasonably select” I don’t mean to sound snobbish but the reality would have been that going to see a solicitor would have been a costly process and publicly funded work would not have been available. Often, as was the case, the practice was built around the father or relative of one of the current partners and that would have generated a significant amount of goodwill going forward. Even if that was not the case then the partners would have operated in a relatively small area and, in colloquial terms, would have been big fish in a small pond. Their reputations would be easily established through word of mouth (WOM); but most importantly the number of firms that they would have competed with would have been significantly less than the current day. It seems trite but the scarcity value would have been high and therefore the intellectual capital of the partners would have commanded a premium even if the delivery was mediocre. It’s a bit like Seth Godin’s argument raised recently in an audio presentation about being the only person in town with a sugar cane crusher (see more of this in his excellent book Linchpin).

Another important factor – whether from a motivational or business development perspective – is that those partners would have been the engine room of the practice and if they didn’t generate fees then they wouldn’t stay in business – simple stuff.

As to selling, they would have been part of the fabric of the town and would not have dreamt of going out to prospect (oh what a shameful word) and would have expected their reputations to sell the practice. WOM would have been the main way to win new clients. They would have networked but it would be low key and quite likely would have been focused around the church or other community groups.

The Present Day

Fast forward to the 21st century. Some people would argue that the word “profession” has become a mill stone around the PSF market’s neck. It connotes a rather woolly and mildly Dickensian past and is not suggestive of speed of response, business critical thinking and a dynamic enterprise. In fact more and more firms are incorporating as LLPs and it won’t be long before we see more limited companies emerging. What will a typical mid-size practice then be called?

It is difficult to know but, for the moment, most PSF are run along commercial lines – they take the line that we are run like a modern-day business. I will come back to this in a future post but, for the moment, my observation on this is that they are living through a period of massive change and the old partnership model has not really been adapted to the point where there is a strong enough synergy with the business model – this takes in many facets but one of the most obvious are employee engagement, remuneration and capital investment.

The Selling Process

Again sticking with the here and now. Is there a process: A1 ~ follows ~ B2 ~ follows ~ C3 = more fee income (££) for the PSF. Or is it the same or similar to the old networking process? In short, have PSF modernised their practices? And to what extent?

If I was on a rant (which I am not – it sounds a bit too Tom Petersesque), I would say that PSF have not progressed one iota. All that is going on is a slightly more efficient approach to the old school methodology above.

Now that might be OK if there was the same number of PSF but there are probably 100% more (scarcity is therefore low which affects the price and increases the competitive pressure).

This methodology is also intrinsic to the personality of the partners/members/directors (much like before) but the problem is that they are no longer so attached to the locus of the office – they might drive 30 miles to get to work!

The other factor in play is Control. Partners etc do not (understandably) want to cede control to a more junior person for fear of (in no order of priority): (1) losing the client; (2) messing up the relationship so that there is no possibility of cross-sellling or up-selling; (3) the junior person leaving the PSF and taking the client with them; and (4) having the client close to them so that they can point to the fee generation of their team when it comes to performance appraisal time.

Perhaps less of a compelling reason but one that still holds sway in some quarters is along the lines of: “my work will sell me”. In other words I shouldn’t have to sell myself because, quite frankly, everyone knows that I am Mr/Mrs [X] and the work will simply come to me.

These reasons are perfectly laudable but they do not excuse the fact – wait for it – that partners etc need to Sell. Forget the control argument and the risk that comes with that; forget the notion that your work will sell itself (Coke still advertises); and forget the notion that WOM will cut it. The truth is that You need to be visible but much more than that professionals (my extended version) need to sell and sell in abundance. In future posts I will deal with the methodologies, the cost/risk equation and tactics and strategy but, for now, I just want to make the point that selling is as integral to your practice, and your practice, and your practice, as is the coal face work, managing a team, reading a balance sheet and dealing with all the other business critical issues that you are involved with.

I know there are tremendous pressures to bill but this is like the old Dr Stephen Covey matrix where all your time is spent in sector 1 (the urgent and important stuff) rather than sector 2 (the non urgent but important stuff). Too much time in sector 1 means you simply won’t give yourself the required opportunity to navigate towards the planning and creation paradigm.

So there it is – for the moment at least – I am firmly in the camp of selling.

Summary

Training, training, training. Remember when you first contemplated joining the profession. No doubt you were tense, nervous and anxious about the amount of time in training to become a fully fledged professional. On average I would say that 10 years is about right.

Apart from the ritualistic CPD process, you have probably taken the view that unless it was absolutely necessary you would stay clear of the inside of a lecture theatre or training room and I understand that but if you are going to grow into your new skin (there is no such thing as the natural-born salesperson) then you will need to embark on a systematic course of training to sell and grow your practice. Confidence is key but until such time as you have the methodologies and have practiced, drilled and rehearsed there is no way you can expect to get better.

No doubt money is tight so how about buying yourself a book or two.

I would strongly suggest that you start by reading the Go-Giver by Bob Burg and John David Mann. On its face it has nothing to do with selling. It is in fact a parable written in the same vein as Who Moved My Cheese by Dr Spencer Johnson. There is also a follow-up book to it entitled Go-Givers Sell More (this refines and applies the Go-Giver principles). If you learn the 5 Laws then it will move you in the direction of referral based selling which is by far and a way the best form of WOM selling. Once you have read the book then you will be primed to understand some of the trust based selling books and materials that exist.

Of course this blog post comes with the usual disclaimer that the thoughts expressed above are mine and do not represent any one firm person or entity.

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