2012 - what lies ahead for professional firms.

We threw away our crystal ball long ago when we learned that experience and judgment were far more important in planning for the future than wistful thinking. So you ask – what do we see in 2012 for professional firms?

Competition, competition, competition. No it is not a trend. A trend is something one choses to embrace or not – as in whether beige is still ‘in’. It is a tsunami which will change the landscape for your firm forever. Whether that change in the landscape is beneficial or not is up to firm executives who must be emboldened to address the issues and demonstrate the leadership the future demands.

It started a few years ago with small mergers and the occasional rebranding.  It gained force and impact as power started to shift away from firms to clients. It gained momentum as new technology and communications moved away from the fringe to centre stage. And it announced its reality during 2011 as firms merged at a growing rate, firms disappeared and clients finally called the shots on everything from rates to staffing and reporting.

What does it mean for your firm?

First, know what you stand for and make sure your identity communicates that to your target audiences. The marketplace is crowded with me-too professional firms. For the most part nothing differentiates any firm from another. If you can’t tell a stranger what you stand for, and that something should be a differentiator, in one simple sentence you have work to do. If your brand is not recognizable as a differentiator, you have work to do.

Second, examine your marketing communications methods. If you think having a website is all you need, you have work to do. If you do not have a social media policy and practices in place, you have work to do. If you rely on the same few ads in the same professional publications to make your voice heard – you have work to do.

Third, review your client service approach to make sure you have a formal mechanism to stay in touch with clients, get their feedback and input and make the right changes to your service approach and offering. Firms who are complacent about talking to their clients usually know in their hearts they are not delivering the goods. Ignoring clients often leads to declining revenue.

Finally, embrace business development as a critical responsibility for every professional. Revenue growth comes from relationship building and it is the responsibility of every professional to contribute to that goal. Each professional should have a personal business plan with specific revenue generation goals.

2012 will be exciting for professional firms one way or another.  For those who see how the landscape has changed we will see rebranding, better communications using the right social media, client focus and a spread in responsibility amongst all professionals for revenue generation. Those firms will secure their client relationships, cross sell more services and grow revenue.

Alas, for firms who sit on the fence believing all these challenges are not severe we will see declining revenue, defections of key players and at its worse, the demise of the firm.