today\u2019s modern firm \u2013 and there are more of them than we think, and fewer of them than we\u2019d like to think \u2013 is still evolving. change is the result of an evolutionary process \u2013 and evolution in a dynamic world is imperative and ongoing.<\/p>\n

today\u2019s modern firm is sufficiently different from the last century to be almost unrecognizable to the old-timers. it tends to be more client-oriented. it\u2019s informal in internal and external relationships, and appropriately formal when the accounting or legal practices demand it. new concepts of governance are beginning to emerge \u2013 even to the point of considering the publicly held professional firm. both accounting and law firms increasingly speak of a concept called value \u2013 what is the value to the clients of the knowledge and skills we provide? \u2013 this puts greater pressure on client service’s traditional and somewhat archaic hourly valuation. in many firms, hourly pricing is being replaced with more substantive value pricing, based on the value of the matter to the client.<\/p>\n

while accounting firms’ structure and business models differ in several significant and obvious ways from those of law firms, the contemporary environment for both professions have much in common. for example, both professions face a changing relationship with clients. for both, the era of the somewhat docile client is vanishing, thus affecting the ways in which each profession must function in the marketplace. at the same time, both professions are experiencing the commoditization of traditional accounting and legal practices, which, in today\u2019s electronic environment, readily facilitates outsourcing to highly qualified accountants and lawyers in such countries as india, the philippines and even china.<\/p>\n

to have dreamed of outsourcing accounting or legal processes to a foreign country would have been a source of great hilarity only a decade or so ago. such can be the quirks of evolution.<\/p>\n

august aquila, a leading international consultant on accounting firm management (and my co-author of client at the core<\/em>), says, \u201dthe traditional black box model of the all-knowing professional is now an anachronism. where once clients didn\u2019t have access to the accounting process, accountants now function in collaboration with their clients. this has fostered, in many client matters, increasingly changing the client-professional relationship to one of consulting. this relationship continues to emerge as more aspects of the accounting process are commoditized and outsourced. it\u2019s here, too, that technology serves as an important factor in accounting practice, as such practices as tax returns and bookkeeping are regularly sent to call centers in other countries, where they\u2019re processed by well-trained technicians.\u201d this new kind of client is well known to the legal profession as well. says pamela waldow, \u201cthe language of many current rfps now includes very specific questions, not just about a firm\u2019s legal expertise, but also about how legal services will be delivered, budgeted, monitored and managed. in-house counsel are making clear what they want to pay and how they want services delivered. increasingly, they also have begun to insist that their outside law firms provide additional no-cost perks.\u201d<\/p>\n

new processes, such as defining, analyzing and using data of all kinds \u2013 knowledge management \u2013 are becoming an integral part of law and accounting firm management, and are themselves evolving. understanding and using data and information \u2013 both internally for firm management and externally as an aid to the crucial science and art of defining a market and reaching it \u2013 is expanding. and now, we have dedicated knowledge management specialists, some of whom are accountants or lawyers, and some of whom are data specialists, and many of whom are both professionals and data specialists.<\/p>\n

the new norm is the firm that moves into the digital age \u2013 that uses technology with increasing sophistication in all aspects of its business. increasingly, firm practices are shaped by technology. processes are automated, the mobile office is becoming commonplace, concepts of productivity are increasingly considered. flex time and the internet allow people to work at home, which helps keep talent and can improve productivity.<\/p>\n

and marketing. and competition. practice development? no longer merely at the country club or golf course, but as a professional practice that\u2019s integral to the professional firm\u2019s practice.<\/p>\n

bates v. state bar of arizona<\/em><\/strong> and professional services marketing 1.0 <\/strong><\/p>\n

there seems to be a general impression that the changes in accounting and law practices that created the modern firm resulted from the blast of technology that began to enter the professions in the early 1980s. not so. the current cycle of evolution resulting in the thread of change we now see actually began in 1977, with the u.s. supreme court decision in bates v. state <\/em>bar of arizona<\/em>. the decision, which primarily addressed the subject of law firm advertising, effectively upended generations of prohibitions against all forms of promotion.<\/p>\n

that landmark supreme court decision struck down the american bar association\u2019s canons of ethics \u2013 and by extension, the code of professional conduct of the american institute of cpas \u2013 that for generations had inhibited frank marketing, or any form of commercialization, by professional firms. it profoundly altered the future of the accounting and legal professions and started the evolutionary course that has led to the modern firm.<\/p>\n

the ethical rules of the professions were ostensibly designed to preserve both the real and perceived probity and integrity of the professions. they obviated, as well, any deviations from the traditions of the practices, most of which fostered a virtual class war \u2013 a barrier between the all-knowing professional and the client. and while bates specifically addressed lawyer advertising, ultimately the professionals realized that two things had happened \u2013 the decision applied to the accounting profession as well as to the legal profession, and the new concept of competition bred the first opportunities and efforts at marketing. competition continues to be the driving force of evolution that defines the modern accounting and law firm, as it does for commercial enterprises.<\/p>\n

technology, of course, ultimately enhanced the evolutionary process, and continues to do so, but competition<\/strong>, not technology, drives the evolutionary process that portends continued change in the professions.<\/p>\n

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