As a specialist consultancy which helps Professional Service firms win in what is a competitive market place, we wanted to share our insights into what we think will be the key trends in professional services firms in 2018. We highlight the key issues we think will impact firms in 2018 and provide advice on where we think the focus will be in developing people and practices.
2018 has seen many firms start to re-think how they attract and serve clients, with automation and the client experience being a key area of focus. In particular:
The Alternative AI conference for Professional Services firms held last November was attended by 250 professionals and highlighted that AI is at the top of everyone’s ‘worry list’. The greatest challenge is that with SO much on offer, how do you decide where to invest your money? A niche firm can do well by investing early and developing something that will enable it to provide value to clients and reduce its own costs, creating a USP or advantage in its niche. However, a full service firm, either lawyers or accountants, will be at a disadvantage because the breadth of opportunity is so vast – you can develop anything but not everything.
Professional firms lack the equivalent of a CTO (Chief Technology Officer) and until they decide to bite the bullet and bring someone in, or promote this person to board level influence, they will continue to make the mistake of assuming “Someone in IT will pick that up…” Technology is now something for every board to engage with before the firm is overtaken by more agile competition.
They walk amongst us and the wise will attest to the fact that millennials are much the same as any other generation in that they want to be valued, they want to be heard and they want to progress.
However, now people have a few years of experience of working with them, a few things seem to be coming clear: they don’t want a job for life, they find flexibility of lifestyles and learning much more appealing, and actively seek out new and different opportunity in their work life. Promotion to partner is also less appealing. Outside of the few in the very top firms, individuals are looking for an environment where values are important and CSR is discussed outside of the boardroom because everyone is interested in it.
Connectivity is key and firms need to establish how they can best capitalise on their new recruits. What platforms can be used effectively? What tools, what apps? Most importantly of all – how do you capitalise on all that latent talent and capture the creative ideas available? Success is no longer about ‘time served’ but focused on results. Firms that can capture great ideas will move ahead more quickly.
Clients and Sectors
People seem to be catching on to the fact that now we are bombarded by media of all descriptions, unless it is very applicable to our own circumstances, then we tend to hit delete faster than you can say – is this relevant?
But this causes problems because firms are not always organised in sectors. If you imagine a corporate firm, selling widgets, there would be a team for Military widget productions, one for domestic production and they would meet regularly and chat, discuss performance and monitor who did what best. But PSFs generally are organised in their handy silos; Corporate, Tax, Litigation, Private Wealth, Audit, Accounts, VAT, Family… and when we work with a group of people who are servicing a sector, they barely know each other and what they all do.
Recent research suggests that 40% of all professional services buyers have a sector specialism in their top 3 buying criteria and 67% of professional services buyers want to work with someone who has a deep understanding of both their marketplace and their business.
A client wants, and indeed needs, a professional adviser who is conversant with their life – personal and professional, and who understands their market and environment, the stage of development their business is in and what it needs to do to get where the owner wants it to go. That’s a tough call if everybody is working in their own silo.
There is much to do here and the firms that are doing it well are drawing clients towards them and creating firm advocates. Our sector marketing programme enables individuals across a range of teams who share a common sector interest, to be able to demonstrate a powerful sector specialism – even when they lack the self belief to do it.
Many of the traditional rainmakers in firms are retiring and this is highlighting a growing skills shortage among lawyers, accountants, and other advisers who are now in leadership roles and must be counted on to sell new and more complex work. Firms are starting to see a sizeable and very real gap in relationship and business development at firms of all sizes and are starting to invest in developing the next generation at a much earlier stage.
Successful firms are focusing on fluid and agile people strategies, clearly identifying talent and high performers, embedding mentoring and coaching, ‘stretching’ people and constantly identifying ‘skills’ gaps.
Traditionally, professional services firms charge clients on an hourly basis. It’s expected that more firms will shift to value-based pricing as they try to become “advisers” rather than just being service providers paid by the hour.
This challenge is compounded by the advent of AI enabled services where you may be able to draft that contract in a fraction of the time you did previously, …. but does the contract have same value? What does the client want to pay for? Your time? Or the value of the advice/service received?
It’s been a hot topic of conversation in 2017, however it was too early to know what was happening, so no firm has had anything to say that will really help clients. This could change in 2018, and it’s a real opportunity for every professional adviser to get onto the front foot and ensure that it is seen as the ‘go to’ provider of commercial expertise. Who will win in your local marketplace? With new trade agreements being negotiated, advisers are likely to be in greater demand as clients seek clarity around the financial and legal implications to their business stemming from the exit from the European Union.
Developing a Clear Strategy and Defining the Value Proposition
We all know there is a lot going on out there. As a result we are seeing a trend in firms spending time on the absolute essentials – (re)defining what their firm is all about and developing simple, flexible and, most importantly, executable strategic plans. The amount of ‘clutter’ and noise will continue to grow and there is a realisation that it is vital to keep the business and it’s people on track by enabling them to see ‘through the trees’ – what the firm is trying to do and where it is going.
Our board programme helps the senior team to think outwards, to create prioritised strategic goals, reaffirm values and behaviours and align the plan with all aspects of the business and it’s people.
These are just a handful of the key trends in professional service firms and the areas that our clients have said they are worried about. For the firms that are brave enough to take the first step and make some bold decisions we believe they will reap the benefits in the longer term.
theGrogroup wishes you every success in the execution of your firms and personal goals in 2018, and we look forward to seeing what successes and challenges the new year brings.
If you would like to discuss any aspect of individual and business performance, and possible solutions please contact us on 01892 610060.