Future-proofing your firm to become the go-to firm in your market

Mid-size accounting and law firms face many threats to their existence - new market entrants; the big firms encroaching on their territory; technology; and in some countries, multidisciplinary practices. So what do clients really want and how can mid-size firms remain relevant to ensure a better tomorrow? Professional services consultant, speaker and author Heather Townsend explains.

A fast-changing market for professional services

Heather Townsend, a keynote speaker at the recent 2018 EMEA Regional Conference, explained that the business environment for mid-size accounting and law firms is becoming ever more competitive, with big firms moving into the mid-market and small business marketplaces: “You only have to look at examples such as Deloitte Propel and PwC’s My Finance Partner,” commented Heather.

Another threat, according to Heather, comes from multidisciplinary practices. Already prevalent in countries such as Germany and Italy, accounting firms are now moving into specific areas of legal practice in the UK:

“Innovative firms are thinking beyond traditional boundaries and looking to build their practices around what clients need and to create one stop shops.”

Technology is also proving to be a huge catalyst for change. Heather referred to a 2015 research paper from Oxford University and Deloitte which ranked jobs by the likelihood of their being replaced by a robot. Certain roles are under threat, particularly bookkeepers and legal secretaries, and Heather pointed out that the disappearance of these more junior roles within firms could mean that finding people with the required post qualification experience to fill more senior posts will become much more difficult. In Heather’s view, firms need to "adapt or exit the professions."

How can firms remain relevant?

“Clients are telling us they want insight and advisory services,” was Heather’s message to the accountants and lawyers in the room. Reports such as Sage’s The Practice of Now and BDO’s in-house counsel law survey show that clients want their advisers to take a true business partner approach and want a ‘whole solution’ from their accountant or lawyer. Heather also demonstrated that clients want their advisers to adopt digital tools for collaboration and to be open and transparent.

Go narrow

To future-proof themselves, mid-size firms need to go more narrow and specialise. A key mistake firms make, according to Heather, is that they often only have a conversation with the client about the matter at hand rather than taking time to get in deeper and understand the needs of the client: “Sometimes, firms go into sales mode rather than trying to get people to want to buy from them. You cannot sell insight.”

Heather advised firms to get beyond the typical platitudes such as their ability to help clients to save tax or protect their businesses – in her view, the only way to do this is to go more niche and to really get under the skin of the client’s business by offering knowledge and ideas:

“Specialists have the answers clients need and can provide them when they need them. And they can charge higher fees.”

Understand your buyer

Firms also need to have greater understanding of the journey their clients go through in selecting or deselecting a lawyer or accountant. Changes to buyer behaviour mean that buyers will have often already defined the outcomes they want and will only tend to talk to suppliers when they are in the final buying stage. Heather urged firms to therefore ensure that when clients come knocking, their websites and marketing create the right impression as the buyer will be considering whether to get in touch.

How can your firm stand out?

A key problem identified by Heather is that many law and accounting firms don’t look that different from each other or don’t appear to be specialist. Heather argued that a firm will not make itself future-proof if it tries to be all things to all people and takes the view that it needs to maximise the size of its market to be profitable.

Alliott Group’s professional members were advised that they need to have a niche: “If you want to stand out and be remembered, you need to be the pink car rather than the silver car,” commented Heather.

Opportunities to specialise include around sectors, demographics (such as sole traders or freelancers) or around a technical specialism e.g. R&D tax credits.

Focus on ideal clients as part of a future-proofing strategy

Firms need to evolve from selling to “helping clients to buy” by researching and uncovering the emotional drivers for their needs. One strategy is to make the firm highly desirable by promoting the availability of specialist knowledge. Rather than worry about the firm becoming less desirable to some clients as a result, in Heather’s view, this strategic move will help the firm to shift focus to the "ideal client" with whom the firm loves to work.

As part of a future-proofing exercise, Heather advised firms to analyse their client bases to see which clients and niches generate the real profits and where they should therefore focus: “Firms may find that the 80/20 rule applies and that the profit lies in 20% of the client base.”

Apply the three tests: passion, fit and credibility

Heather suggested firms should apply three tests when choosing which niches to focus on: firstly, are they passionate about their clients’ business in the niche? Secondly, is there a fit in terms of the firm’s positioning in a specific area of expertise and what the market is prepared to pay for it? Finally, where does your credibility lie and which clients arrive pre-sold to your firm? 

Ultimately, orienting around niches is about making a choice to win work in an easier way – referring to research done by Hinge, Heather added that taking this approach will involve lower marketing costs, higher conversion rates, better fees and firm growth.

Routes to market– going beyond referrals

The Edelman Trust Barometer, shows, according to Heather, that 83% of business to business new work starts with a referral. Given that referrals take time as they are based on relationships, conference attendees were urged to explore other marketing strategies such as becoming hyperlocal in focus and building expertise around key local industries. Heather also emphasised that firms need to have a great digital strategy that creates a distinctive visual appeal and that deploys ‘pull marketing’ tactics such as content marketing and search engine marketing. Firms were also encouraged to invest in creating social proof on specific websites which offer ratings of professionals.

In conclusion, Heather stressed the need for mid-size firms to be ready for the future by being adaptable, taking staff with them and by being highly focused on claiming their place in the market.

About Heather Townsend

Heather Townsend specialises in helping accountants, lawyers and consultants to market and sell themselves. Over the last 12 months, Heather has supported her clients to build their profile, differentiate themselves, grow their reputation, and in the process add over £1 million in fees to their client portfolio, and often make partner in the process.