The Simple Truth About the Professional Firm Business Model

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There is much talk- and even some action-about what business models are appropriate for professional firms in the 21st century. Whilst some professional firms are still in denial and others struggle with how to make the change it is clear that the 19th century era partnership model, overlaid by the early 20th century industrialized notion of the leveraging of people x time, upon which most professional firms are still based, has run its race.

There are now many options for professional firms as to how they best structure themselves and create firms that are much more suitable for the people that work within them and to better serve the customers they seek.

In my view no matter what structure your firm is- or should be-for many years I have held a very simplistic view as to how really good firms look at themselves. This is represented as follow:

 

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Let me explain.

I believe that only the best firms have an incredibly strong base that everything else is built upon.I call it their internal environment-their culture if you like. This is the way things are done around here,the way we treat each other, our values, our leadership,our behaviours,how innovative and creative we are,our goals,our vision and our aspirations. And I happen to think it is this internal environment and little else that attracts and retains really good people (at all levels in the firm); that really good people are inspired and motivated to do really good work; that really good work attracts and retains really good customers, and, finally, that really good customers pay really good fees.

And it is in that order. It is from the bottom up-not top down.Play around with the order at your peril.

Good luck in trying to attract and retain good people if your culture is crap. Good luck too in trying to produce good work and service if you have the wrong people.Best of luck trying to attract and keep the customers you really want if your service and work ethic sucks. And you will need more than luck if you are trying to extract top fees from average customers.

I know it is not MBA stuff nor worthy of a Harvard Business School program. Its not even new. Our parents might have even called this using common sense with common courtesies. But it is that simple.

Is it easy? No of course not. If it is was that easy all firms would be able to do it.

What do you think? Have I got this wrong? Is there something I am missing? Love to hear your thoughts.