Professional services firms are changing - what to do about it

Written by Julie Brook | 18 January 2017

High street stores aren’t the only businesses falling victim to online competitors. Professional services firms are suffering equally, and must react to survive. For many years, established small and medium-sized solicitor and accountancy firms relied on word of mouth, loyalty and location to ensure a regular supply of custom. Multi-generational client relationships – the stuff of Charles Dickens novels – ensured that wills, conveyancing, small business accounts, tax returns and other always-needed activities continued to provide steady and predictable profits for firms and their partners.

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Today, these reliable sources of income have been undermined by the disruptive power of the web. Firms must deal with three main challenges if they’re to survive.

Proximity

There was a time when a business would look no further than the end of the high street to find an accountant. Similarly, home buyers would engage with the services of a firm of solicitors for conveyancing on the recommendation of their estate agent, or simply because a firm had a presence in their area. Thanks to the internet, however, proximity is no longer such a big part of the selection criteria, as most professional services firms are no more than a Google search away. Gone are the days where face-to-face interaction was paramount, with transactions and exchanges of information happening almost exclusively electronically.

Self-service

Knowledge that was once highly specialist in nature, such as arcane tax legislation or setting up a Power of Attorney, is now in the public domain thanks to the internet. Increasing numbers are therefore attempting to ‘go it alone’ with such activities, either solely using the guidance available to them online, or through the purchase of low-cost template packs, offering standard wording for wills, tenancy agreements and the like.

Hyper-specialism

For those who don’t want to ‘go it alone’, there are firms offering a limited number of specialist services, such as conveyancing or will writing, which online providers are turning over in large volumes at knockdown prices. The most extreme example of this are PPI firms, which operate a fixed, repeatable process at often pro-bono rates. While they may branch into reclaiming packaged bank account charges or flight delays, they will only do so because new low-cost processes can be created.

So where does this leave high street professional services firms?

Richard Hancock, the Marketing Centre’s Regional Director for London, has seen the professional services landscape changing. “It’s fast becoming apparent to younger staff being made Partner that the traditional professional services culture cannot be relied upon to provide the steady and predictable profit shares their predecessors were able to enjoy for generations. In turn, these younger professionals are searching for new sources of growth.”

The ‘dirty word’

For most organisations, the answer would be or business development, but for fee earners and partners in professional services firms, this has not traditionally been the case. Richard has seen resistance to pursuing future growth in this way: “’Marketing’, in particular, has been a somewhat dirty word within the traditional professional services fraternity. It was seen by many as a few branded pens in client meeting rooms, and an annual client cocktail party supplemented with a day out to Ascot.”

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So how has Richard addressed this ‘dirty word’ in the firms he works with? By focusing on long-term strategy. “This starts with getting a common understanding of what they are really good at, and which client segments represents the best long term opportunities for the firm.” It’s also about differentiating themselves amongst their peers. Introspection leads professional services firms to build a marketing strategy that ensures their proposition is clearly understood by staff, clients and the wider industry.

Brand and purpose

It’s not only small to medium professional services firms that have made the shift towards more active business development strategies. Sarah Bogue, part of The Marketing Centre team in London and previously Brand Development Manager at Ernst & Young, has seen large professional services heavyweights make similar moves. As she explains: “It becomes increasingly difficult to deliver a consistent experience as firms grow – as a result, brand and purpose become far more important. “Incorporating purpose into an organisation that inspires both its own people and the outside world will reinforce the brand experience. It also helps engage, attract and retain talent, which is notoriously tough for professional services firms.”

Sarah is clear about the strategies that can cement brand success and define purpose: “Being seen as a thought leader and trusted advisor will inspire confidence in turbulent times and is key to business development success. With this focus comes larger investments in brand activities like thought leadership, PR, social media, strategic sponsorships and events.” We asked Sarah the key questions she would ask to help a professional services team define their market position and brand. Her answer was simple:

What do you want your company to be known for?
What is distinct about your company?

For the second question, Sarah argues that you should ask it to clients and non-clients alike. The answers should provide an invaluable guide to help shape the branding and business development activities of any firm.

The power of perspective

Irrespective of size, Richard and Sarah both agree that the cornerstone of professional services marketing activities – and therefore the cornerstone of future growth – is a healthy dose of self-awareness. How does the firm see itself? How does it want to be seen by others? What distinguishes the organisation from its competitors? Answering these questions will form the foundations for a strategy that encompasses new ways of working and new marketing methods – in turn helping firms redefine themselves and survive in competitive markets. Are you fostering innovation in your firm? Are you a professional services firm grappling with leaner, cheaper competitors? A part-time marketing director could be the solution.

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