Is Your Professional Service Among “Leading Firms?”

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leading firmsWhen Margie Zable Fisher of Zable Fisher Public Relations shared an interview here on Small Business Trends with Built To Sell author John Warrillow, she noted the idea of the service firm trap – an over-focus on hourly rates instead of packages.

In fact, pricing is just one of the traps along the way to developing professional services.

For those who need to break the traps, rejoice.  Leading Firms: How Great Professional Service Firms Succeed & How Your Firm Can Too by David Kuhlman offers tips to improve your professional services beyond smaller jobs and services.

I received a review copy the book from the publisher SelectBooks, and I was pleased with Kuhlman’s blend of insights and supporting material.  Kuhlman has advised numerous senior leaders at prominent professional firms for over 25 years.

When Your Perception of Professional Service Grows Up

Kuhlman’s approach to the material is applicable to small businesses growing up. He examines the operations in a professional firm, highlighting opportunities.

The chapters particularly highlight fallacies and truths. If you are running a professional firm, you’ll quickly learn why some ideas may not be all that they are on paper.

Take strategic advantage, for example. Professional firms believe that their people provide a strategic advantage, but Kuhlman cautions on how and why such assets can be really difficult to develop, noting:

“Most professional firms are good at creating professionals, particular in the process of forming principals, but not as good at creating ‘business people’ …. The process of becoming a complete, fully functioning Actuary or Forensic accountant or Lawyer leaves little time and energy for breadth of knowledge.”

Kuhlman works to broaden the reader’s knowledge, to put mere ideas into workable outlooks that lead to workable solutions.

With a textbook-like tone, Kuhlman reveals graphs, charts and terms that shows the value service firms can bring to customers.   The end result is a better plan for strategy, from execution of customer service to pricing fees.

Top Grade Ideas for Top Professionals

Three aspects of a business model are outlined and are well worth a read if your business plan needs adjusting.  These are introduced early in the book:

  • Client Value Proposition (essentially what is the deficit the client experiences without the service)
  • Client Service Model (the delivery of service)
  • Performance Envelope (the environment in which a firm is best equipped to compete — and my favorite term in the book)

As you can tell from the phrase  “Performance Envelope,”  you can expect the terms throughout the book to inspire meaningful concepts, not just sales-speak or overly technical jibber-jabber.  Readers from professional firms undergoing growth and who have some years of experience will not read a dumbed-down thought.

The chapter “Resource Deployment” was among the most applicable material. It offers pragmatic approaches to managing people and time.  There are graphs throughout, but the terminology introduced in the chapter explains what can happen as a professional firm operates.  The concept behind leverage, for example, is that value from firm operations varies according to who performs the tasks.

Processes in Leading Firms are also explained against what a client can experience, so the reader can understand why some practices may not be all that they are on paper. There’s also a game theory sensibility with respect to workplace concerns. The chapter of meritocracy notes what can be encountered despite principal claims that merit is a factor for workplace success.   Read how Kuhlman applies his experience to note a potential challenge to senior principals:

“Senior principals represent a unique challenge to the firm’s sense of meritocracy.  In this sense “senior” does mean oldest or closest to retirement rather than senior in terms of status or contribution — and therein lies the problem. Different principals follow different paths toward their inevitable departure from their firm. Some principals begin to slow down and contribute less in current economic terms.…  Other principals continue to deliver big results, commanding large clients and significant revenue streams. These principals play a dominant role in the firm’s economic and client life, influencing the fates of a large proportion of the firm’s personnel…. Senior principals who remain dominant represent a different sort of cultural challenge: they soak up opportunities that could more productively be used to enable other up-and-coming principals.”

The viewpoints made this book a really enjoyable resource. A lot of phrases were just eye-catching such as this one:

“No major initiative can be so fully specified that it will survive a collision with actual facts and circumstances on the ground.”

Comments like this are linguistically interesting – a few were a challenge to digest, but not overwhelming on the second read.  But overall every suggestion supports the main thesis:  assets can take time to develop.

Who Could Benefit From Reading Leading Firms?

Legal and financial professionals with dreams of their own firm are certainly the audience for this book. But its appeal does not stop there.

Other businesses whose clients receive professional services can gain insight.

Startups with the latest B2B software-as-a-service application can gain some sensibility about the conditions experienced at professional service firms it intends to sell to.    There is no silver bullet, but your strategy for working with a professional firm can be better refined after reading Kuhlman’s views.

A quick aside:  Those professionals having launched a professional service should also consider reading the book Service Innovation.   It provides some ideas on how to frame service plans to match what you are seeing in the field. The combo can give you some ideas on not only how to be innovative, but what business skill sets your firm would need to deliver the result.

Read Leading Firms to explore how your professional service firm can avoid most traps and to understand what it truly means to lead.

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Pierre DeBois Pierre Debois is Associate Book Editor for Small Business Trends. He is the Founder of Zimana, a consultancy providing strategic analysis to small and medium sized businesses that rely on web analytics data. A Gary, Indiana native, Pierre is currently based in Brooklyn. He blogs about marketing, finance, social media, and analytics at Zimana blog.