We are delighted to announce the publication of our latest research report on how professional services firms are responding to the economic crisis.  You can read the press release here and further details about the report here.

The September Edition of CPA Practice Management Forum included an article by me on the role and process of market and competitive intelligence within CPA Firms.  The ideas in the article are equally applicable to Law Firms and other Professional Services Firms.

Click on the thumbnail to read or download the article (pdf).

This article is reprinted with the publisher’s permission from CPA Practice Management Forum, a monthly journal published by CCE INCORPORATED. Copying or distribution without the publisher’s permission is prohibited. To subscribe to CPA Practice Management Forum or other CCH Journals please call 800 449-8114 or visit www.tax.cchgroup.com. All views expressed in the articles and columns are those of the
author and not necessarily those of CCH INCORPORATED or any other person.

Following on from my previous post “How’s Your Glass?”, an important consideration is what your competition is doing.

1. What intelligence are you gathering about how they are responding?
2. Are they marketing themselves aggressively or running for the exits?
3. What about their people - are they investing in their talent or downsizing?
4. How can you differentiate yourself in the marketplace?
5. Do you have more relevant and compelling points of view than your competitors about how to help your clients in the current environment?

As Kipling said “If you can keep your head when all about you are losing theirs..”

After the events of the last week or so it would be understandable if professional services firms looked forward with some trepidation.  But every cloud has a silver lining.

There are many areas in which firms may be able to help their clients, and help themselves, in the current environment.  Here are a few:

• Risk Management:  The market turmoil should have focused every executive’s mind on understanding and managing their exposure to risk. For CPA firms, the financial advisory firms and the risk consulting and risk technology firms there can be no better time to be talking to current and prospective clients.
• Litigation: It’s gonna happen.  Enough said.
• Compliance: New legislation or regulation appears highly likely.  Just like SOX this may well lead to substantial new opportunities for advisory firms.  In the meantime firms should ensure their clients remain focused on meeting their existing compliance obligations - and don’t allow cost cutting or other actions to compromise compliance effectiveness
• Human Capital: Uncertainty is never good for employee productivity - and top talent will always have attractive options open to them.  The human capital firms can help clients with motivation and retention - whether through leadership development or enhanced benefits.  (Unfortunately) some businesses will also need help with structuring workforce reduction programs.

With that in mind, how’s your glass?  Half full or half empty?

In the last four weeks two of the nations top 20 CPA firms have announced plans to change their names.  Virchow Krause intends to rename as Baker Tilly, LLP and Crowe Chizek has renamed itself Crowe Horwath.  Both firms stated that the name changes, which in both cases reflect the names of their international networks, indicate their focus on better serving the international needs of their clients.

These changes highlight a critical strategic question for many professional services firm:

• Which client needs should we be focused on serving?

Few firms have the scale to realistically deliver a full portfolio of services to clients in every industry and in every country.  As globalization creates opportunities and challenges for businesses of all size, geographic reach is becoming an increasingly important dimension for professional services firms.

Firms need to start making clear, and potentially tough, choices about the services they will provide, the industries they will serve and the geographies they will operate in.  Such tough choices might involve withdrawing from certain services or industries in order to focus on delivering international expertise in a specific service area to a highly targeted set of industries.  (Note that with a 190+ countries in the world - the decision to try and serve clients internationally can be much more nuanced than a simple yes/no).

Firms that are tempted to avoid such decisions risk losing clients to competitors who are better aligned to the needs of those clients.

Which of the following “strategies” sounds more compelling to you?

1. The leading Mid-West US CPA firm
2. The leading global employment law firm
3. The leading IT consulting firm for the retail industry

There are no textbook right or wrong answers to questions like these.  The answers must be based on a detailed understanding of the needs and preferences of current and prospective clients and intelligence about the evolving strategies and capabilities of competitors.

Are your clients going global?  Are your competitors going global? Are you going global too?