Professional firms exist to service clients. To succeed they need a good understanding of the clients needs. That understanding involves a clear knowledge of the type of business and a grasp of the technical and commercial issues their clients’ face. In determining such a strategy, and style of operation, I find it invaluable to look at our own experiences in buying professional services. Recent experiences include:
On the positive side –
– The appointment of bankers, which have a dedicated professional partnership unit in place of a bank with no such focus. Specialism is vital.
– Pragmatic and valued advice from the senior partner of a small firm of lawyers on a variety of matters. The quality of advice provided by the individual(s) with whom you deal is more important than the size or ‘brand’ of their organisation.
On the negative side –
– The lack of focus and understanding of a solicitor at a ‘magic circle’ firm who had little comprehension of the lack of the value he was adding in relation to the size of a transaction. However good a firm’s reputation is, the services are provided by the individuals who must live up to it.
– A senior actuary from a financial services conglomerate presented a report to a professional partnership meeting which bore scant resemblance to a report on the same subject presented three days before to the partnership management.
These examples confirm my view that quality, focus understanding and value for money are the key factors that clients seek from professional firms.
There is and will be a continuing consolidation of firms in the mid-tier and below. Some of the takeovers and mergers will be well thought out strategically and others simply getting bigger for size sake.
Size for size’s sake is never an answer. Whilst one of the consolidation drivers is the ever increasing cost of IT and marketing and the ability to spread that cost over a larger number of partners, all mergers and acquisitions have risks as well as potential benefits.
Only where a merger is well planned and enthusiastically implemented, will it improve the firm’s ability to increase quality, focus, understanding and value for money. On any merger a dilution of direction and skills can be a danger.
Taking over a firm that has already lost its way enhances the chances that you will pull down your levels of quality, skill and delivery, and run the risk of not meeting expectations.
Whatever the future shape of the mid-tier, the successful firms of the future will be those who continue to keep their clients and personnel happy and measure success in more qualitative manner than size and league table position.
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