In the busy professional services arena, competition abounds and some say it is difficult to distinguish between firms. And yet there are some firms who experience significant year on year profitable growth. They build an enviable reputation with clients, employees and peers. Increasingly we are asked what is the difference between a reasonably successful firm and a really great one?
We would describe a really great firm as one that:
- Achieves significant sustainable profitable growth
- Has the right type of client base providing the right type of work at the right fees
- Attracts and retains great people
We recognise that as an individual you will have your own view of what makes a great firm. No view will be wrong, however, we have yet to find a really great firm that does not match the above description.
We would also like to share six attributes that we have identified. These take a reasonably successful firm to being one that is really great and are:
- A design for the future – a clear aim for the intended size and shape of the firm
- Service lines/product offer
- Business development
- Managing client experience
Design the future
How do those firms that continue to move up the league tables get there? Our observations are that they identify the change they want to achieve and they put in place the necessary actions to achieve it.
Favourable market conditions can help, but without question the greatest firms have some clarity in their vision of where they are trying to go. This is not facilitated by well meaning consultants and captured in a poetic vision or mission statement that no one in the firm recognises. It involves a group of partners and employees taking some pragmatic decisions and views as to where and what type of firm they want to be. With a 2-3 year timescale in mind, here are some of the questions we believe the greatest firms asked themselves before accelerating their growth to greatness:
- Which service lines and disciplines are we strongest in?
- Which service lines and disciplines should we stop offering?
- Which of our current clients do we need to proactively protect and develop?
- Do we need any new clients? If so, how many and who?
- What reputation do we want to build in the minds of both existing and target clients?
- Human capital: Who do we need to keep? Who do we need to attract? Who might not be part of the future?
- What political, legislative, environmental and technological factors will effect the business environment?
- What changes in client buying behaviours can be anticipated?
- What is the competition doing?
- How will the firm manage and lead the acceleration to greatness?
- What investment (money and resource) is required to achieve the plan?
When designing the future, mistakes will inevitably be made. The biggest mistake however is not to have a design in the first place. The next step is to ensure all of the proactive activity and investment in the firm is focussed on turning the design into reality.
We have interviewed hundreds of managing partners, partners, principles and fee earners to ask them what makes a great firm. Without fail leadership always ranks highly as a vital component. Not really surprising in a business that is so dependant upon people and leadership is very much about people.
Professional services firms feature very talented individuals, usually highly motivated by the very work they do. They tend not to work well in an environment, which tries to command or coerce them and perform best when they understand and ‘buy in’ to what is asked of them. They also tend to be suspicious of ‘management’.
The best firms have recognised that developing the right leaders at all levels of the business is vital to achieving their vision. They understand that leadership is not about position or hierarchy but is about definable characteristics and behaviours that can be learned.
Leadership is not just the domain of ‘big’ firms. One fast-growing regional firm, with a clear vision of what it wants to be, realised that it needed to equip all its partners with coaching skills to drive the necessary changes across the business.
The really great firms attract great people. Attracting and retaining great people works best when the firm is clear about its values and attitudes to business and actively seeks people who are happy to share and embrace these. They develop their own philosophy about how they want to interact with clients, how they want to treat their people, how they want their people to work together etc. This philosophy is then broken down into qualities, skills and behaviours which the firms base their recruitment, selection, induction and training on.
Success here comes from a realisation that greatness can take many forms. That to be a great firm you need to have great people in what they do. This means playing to strengths and not asking everyone to have the same responsibilities. People become great in their roles because they are allowed to concentrate on what they are good at and only that.
Service lines/product offer
Let’s now consider how the greatest firms define their offer to market. The greatest success appears to happen when firms make intelligent clear-cut decisions as to which services they wish to offer to a clearly defined client base and then set out to make them ‘easy for clients to buy’.
‘Ease of buying’, is something often overlooked by less successful firms. However, there appears to be three factors present in the most profitable ones:
- They focus on offering service lines and solutions where the market place perceives them as strong
- They avoid offering any service lines or solutions where the market place perceives them as being weak
- Before offering new service lines or solutions, sufficient investment is made in both people and reputation-building to ensure a strong reputation is quickly earned.
Critical to this is thinking like a client and how they view particular services and would like to buy them. The greatest firms recognise that different clients want different service lines and offerings from them. We know of one firm that recognised a particular service line was viewed as a commodity purchase. Rather than attempting to oversell with a high touch consultative approach, they simply worked on becoming the slickest, quickest and most cost effective supplier for the client to buy! Make no mistake, they also made a significant return from the service. Thinking like clients caused them to change their delivery model. It also freed up more resources for clients wanting more complex relationships.
Great firms sell themselves, and sell themselves better than the competition. Or put another way, the greatest firms make it ‘easy for clients to buy’ from them, rather than from the competition.
How? They have a business development culture. A culture where the process for managing and developing existing clients together with winning new clients is fully understood. The process is robust and becomes ‘the way we do business around here’.
The greatest firms also appear to have more professional business development people than their peers. These professionals are not treated as ‘less worthy’ support people: they are considered to be equals and an integral part of the firm’s success.
Great firms do not view business development as occasional initiatives to boost fee income when the pot is running dry. They see it as something that happens every week, every month, ever quarter, forever! This type of approach provides a sustainable flow of opportunities. The opportunities are more likely to turn into fee income reality if the selling is handled by fee-earners who understand the skills and behaviours of consultative selling. And to achieve this fee-earners are given training, mentoring, time and support on the areas where they most need it.
At the heart of delivering a great client experience is the understanding that each client’s expectations of the firm are different and to be great or outstanding, the firm has to surpass these expectations in some way.
Some of the less successful firms, feel this is difficult to manage across their client portfolio and expensive and yet it isn’t. By taking the time to understand client expectations great firms are able to identify similarities. They make a number of steps, which satisfy a large number of clients, they then enable the creativity and ingenuity of the client service teams to solve specific issues. Often this results in greater innovation across the firm, which in time benefits other clients. Delighted clients generate a greater take up of services and more client referrals.
But delivering a great client experience isn’t the remit of the client service team alone. As a client, we experience many ‘touch points’ with different parts of a firm – there will be reception staff, the people in accounts, marketing teams and efforts, to name but a few. Each of these touch points can sweeten or sour a client relationship and so the greatest firms put much energy into communicating, training and managing their people to deliver a great client experience. They structure their reward and recognition programmes to demonstrate their commitment to delighting clients.
Whilst some may say that the professional services sector is somewhat crowded, we have seen enough pockets of greatness to enable a lot of firms to enjoy reasonable success. But there are differences between a reasonably successful firm and a really great one. We hope our insight has given you food for thought. From your experience, what do you think makes a great firm? How does that relate to your own firm? What would your firm look if it was great? Congratulations, you’ve already taken the first step on the path to greatness.
- The Secrets to Successful Pitch Coaching – Part 1 Published 31st August 2011
- Building business relationships Published 22nd November 2010
- Can you grow your revenue using social media? Published 26th Oct 2010
- Values Published 7th January 2011