In five years, will professional services firms look a bit more like software companies?

On first glance, this might seem implausible. For a very long time, firms have been organised around fee earning partners who crafted reputations based upon expertise and trusted relationships, not technology. Yet it is a platform business model – comparable to Amazon, or even your smartphone – that will define the successful firms of the future.

Last week, my colleague Lee Bryant and I hosted a breakfast event on the future of the firm in professional services. Joining us in the discussion were senior members of the transformation team at RPC, UK Law Firm of the Year in 2014 and 2015, as well as executives at premier law and accounting firms.

Our session explored the disruptions affecting the professions, from technology (e.g. new online competitors, AI) to clients (e.g. the rise of empowered General Counsel and finance functions within corporates) to societal changes (e.g. the influx of millenials in the workforce).

These disruptions pose significant challenges to the way firms organise their work. And specifically, they chip away at the social structure that has long served the professions, which assumes the continuation of a slow conveyor belt from qualification to partnership for specialised professionals, with all other value creation activities delegated to ancillary support functions. Some of these support functions, such as technology, analytics, consulting and even design thinking are fast becoming a core part of the value proposition clients expect.

In addition, the pace of change is increasing thanks to the emergence of new startups and non-traditional competitors. Clients want results and value, not just to buy a standard type of matter or engagement just because that is the way they have worked int he past. As a result, firms need to flex and respond to ever-changing stimuli, and to be able to deliver value across a wider area than straightforward legal or accounting advice. This requires organisational structures and practices that are more agile – in terms of structure, management, and team shapes – and also more connected. It also means that what were previously seen as support functions are becoming potentially a source of differentiation and competitive advantage.

Connected products need connected organisations

The nature of the firm has to be consistent with the changing nature of products and services. Conway’s law says that every organisation is pre-destined to produce products and services that reflect its internal communication structure. So if you are hierarchical or internally divided into functional silos, your services will reflect that. In contrast, technology-enabled products and AI require a more lateral orientation and a connected view of how to deliver value to clients.

Enter the platform business model. We encounter platforms in our lives every day. Think of your phone, or, more specifically, its operating system. Your iOS or Android platform supports your apps with location, security, and access services. In the same way, we believe that firms will embed their policies, procedures, rules and workflows into internal platforms to support client-facing teams and innovation.

How Platform Firms work in practice

During our panel discussion, RPC’s Andrew Woolfson, Director of Knowledge Management & Capability, and Clint Evans, Director of Brand & Talent talked about how RPC is putting the platform model into practice.

One of the most important take-aways was that platforms create a self-service environment that increases the automomy of client-facing teams and distributes accountability. As Woolfson described, “We try to develop accountability by building micro-enterprises within the firm. We invest at this level. It is about decentralising accountability and investment, which, in turn, empowers more people across the business.”

Andrew and Clint also offered pragmatic advice on how to drive change within an organisation, based upon their own learnings: “You cannot stand up and wave a flag. You have to start in stealth mode. Each step must ADD VALUE. This is how you build buy-in. Also, do not try and change everyone. We pick entrepreneurial partners. We work with them and support their initiatives.”

For more insights from the breakfast, see our remarks and an excerpt from the panel:

 

0:10 – Introduction and the pyramid structure of firms today, from Christine Overby, CEO Shift*Base.

5:20 – Keynote from Lee Bryant, Co-founder, Post*Shift.

5:54 – Overview of changes and disruptions in the professional services field.

7:05 – Do we need professionals anymore? (Yes)

7:39 – Societal factors and VUCA conditions demand adaptability.

9.54 – How do we get ready for digital transformation?

12:33 – Customer journeys and how they will change.

13:23 – How Business models and value propositions can change.

15:23 – The Firm as a platform.

18:21 – What makes a platform business possible?

19:19 – How Amazon does it.

21:22 – Hierarchy: Its problems and the possible alternatives.

24:05 – How the coordination function will work in the platform without hierarchy

27:34 – Maintaining and embedding  rules and compliance in the platform.

28:10 – Moving to a Human Sensor Network.

29:05 – How the platform paves the way to building AI, machine learning, and other data services.

30:16 – Hybrid roles and the Talent pipeline

32:13 – Q&A Session starts.

32:32 – Introduction of Andrew Woolfson, RPC’s Director of Knowledge & Capability, and the change journey within RPC.

35:21 – Introduction of Clint Evans, RPC’s Director of Brand & Talent, and breaking down silos within RPC.

37:29 – How do you go about creating a mix between brand management and employee engagement?

38:55 – Why is now the right time to enact a fundamental transformation?

40:53 – How do you ensure change is concrete?