News and Views - October 2011
Richard Warner, ASA, AVA
rawarner@greatlakesval.com

This article was forwarded to me and I thought that given the challenges we all face in building our practices that it might be more relevant reading than the News and Views that typically appears during the first week of the month.  There are some good messages here.  Hope you enjoy the article.

Relationships Key to Firms Surviving Today's Changing Marketplace

The emerging relationship between professional and client, and between the marketers and the professionals, is further complicated by the changing nature of the professions themselves, in which several phenomena are redefining the nature of the professions.

In planning for both a firm and its marketing program, there are three factors that should be understood.

• The nature of the professional firm, static for so many generations, is undergoing radical change. This process is influenced by a vast array of factors, many of which are new, some of which are unforeseeable.
• Where once professionals were isolated from marketers and marketing, they are now becoming active participants in the process, and many of them—lawyers and accountants—are becoming astute marketers.
• The driving force of this evolutionary process is the need to compete, imaginatively and innovatively. It’s enhanced and accelerated by technology, which is in a constant state of innovation and flux.

These factors, then, add up to the reality that if accountants and lawyers are to compete successfully in today’s marketplace—if they are to function successfully in the changing arena of professional services—there must be a shift in emphasis from the tenets of the old marketing to the realities of the new. They must accept the significance of relationships as an element of marketing that makes marketing professional services different from marketing products.

How does this translate into practice? What must be done to the strategic 3.0 plan to assure the professional firm's survival in the coming decades?

It starts not with a radical redesign of the traditional firm—that will come of itself—but with assessment that springs from the old and goes to the new. It will not be imposed—it will emerge. For example:

• All marketing, old and new, begins with the market itself. It begins to dawn on today’s professional that the heart of the practice is not the lawyer or accountant, but the client. Gone is the day of the lawyer or accountant who tells but doesn’t listen. Today and tomorrow, a professional is not an existential entity—he or she is only as he or she does.
• This is further exacerbated by recognizing that a view of the marketplace may begin with history but must end in the future. Not where the market has been in the demand and need for services, but where it is going to be tomorrow. There are new rhythms in the marketplace, and the professional must be prepared to hear them and then dance to them.
• The professional—the lawyer or the accountant—must reassess his or her own ability to shift the focus of thinking from the past to the future. There must be a willingness to free oneself from the shackles of the past. While the body of law, or the principles of accounting, remain the bulwarks of the segments of society they govern, they are, first of all, not entirely inflexible, nor are their uses and devices immune from innovative use. It is this very flexibility that is making possible the figurative osmosis on both sides of the membrane that separates law and accounting. The answer, then, is not to fight it, but to find ways to use it.

The sticking factor here is the need that both commerce and society continue to have for the objectivity, the independence, the probity of the professional. But change need not put these factors in jeopardy. Rather, the professions can readily find ways to innovate without losing these important virtues.
What must also be re-examined is the structure of the professional firm. No longer is the traditional hierarchical structure of the professional firm adequate to the needs of the contemporary marketplace. The range of management skills needed to run the contemporary firm have outgrown traditional structures. The partnership structure tends not to make the best uses of management skills, and it impedes the pace at which management decisions must be made. The practice group structure, with certain safeguards built in, seems a likely structural path for the near term, but may not be adequate in the long term, as economic changes compound.

• The professional firm must now be recognized for what it is—a structure to deal with the market it serves. It must recognize that it no longer exists for itself, but as an instrument to get and sustain clients. Lawyering or accounting is merely the services provided to fill the channels opened by the devices of marketing. A full and comfortable room in the house must be opened for the professional marketer. At the same time, the professional marketer must know more than traditional marketing if he or she is to adequately serve the professional. The marketer must understand the lawyer or the accountant, and in ways that surpass the traditional understanding of product. In other words, what had been an “us-and-them” relationship becomes a marketer/professional partnership.
• It is astonishing that every lawyer and every accountant knows that livelihood and career growth depend upon the ability to deliver and keep clients. And yet, as we approach the millennium, there is virtually no law school or accounting school that recognizes that there are skills the professional must know to survive. Sink or swim is no longer a viable preparation for any professional. The elitism of professionals festers at professionals’ schools, and it must be routed out if the professional is to thrive in the coming decades. As of this writing, Fordham Law School is giving courses, taught by Silvia Hodges, on law firm management and marketing. There are now others. This could be the beginning of a valuable trend.
• Continuing professional education is no longer a service to the professions alone—it is an obligation to those served by professionals. Nor should it be limited to only the skills of the profession. There is too much to be known about commerce and industry and the needs of clients in a dynamic economy. There are too many skills that professionals need to know that they don’t know.
• The management skills needed to run a professional firm are a different set of skills than those that are needed to merely sit at the head of a firm. A professional firm is a business. A professional firm that competes is a marketing entity. There are new problems in motivation, in hierarchical structuring, in strategic planning, in human resources management, in client relationships, and in relationships to a new market. The demands of this new kind of management bring the skills of management to a new realm of artfulness—one for which the traditional lawyer or accountant is rarely trained.
• The ultimate lesson to be learned is that the catalytic element of tomorrow’s professional services marketing is that the relationship that begins with the market—the client—now includes the professional. As one moves and changes, so too must the other.

The tools of marketing are, of themselves, immutable. Except perhaps for the use of the Internet, nothing much has changed in generations. We still have networking, public relations, speeches and seminars, and articles. We still understand the need for fathoming the markets we serve, and the strategy for using the tools to reach that market. But the difficult lesson to learn is that the value of the tools is not in themselves but in how innovatively, persuasively, imaginatively they are used.
It is only when we understand the changing relationships between the professional and the client, and the need to nurture one's ability to function in that relationship with flexibility and agility, that the professions will be able to adapt and survive the coming generations.

This article, excerpted from Professional Services Marketing 3.0 by Bruce W. Marcus (Bay Street Group, Spring, 2011), is reprinted here with permission.  Bruce W.  Marcus is a Connecticut-based consultant in marketing and strategic planning for professional firms, the  editor of THE MARCUS LETTER ON PROFESSIONAL SERVICES MARKETING, (www.marcusletter.com) and  the co-author of CLIENT AT THE CORE (John Wiley & Sons, 2004ã 2011 Bruce W. Marcus. All rights reserved.