Imagine a professional practice group (or firm) that focuses its attention on serving the needs of clients with frontier problems. How would you run such a practice?

True to the professions traditional self-image of being elite practitioners, the staffing requirements of this “expertise-based” practice would be such that the firm would need to seek out and attract only the top percentile graduates from the best schools, in order to generate top-notch apprentices who could meet the quality needs of the frontier practice. Training would best be accomplished through an informal apprenticeship system and, since standards would be high, a rigorous up-or-out promotion system would ensure that the firm retained only the best and the brightest.

While some large-scale engagements might require large numbers of junior professionals to draft documents, perform analyses, or conduct client interviews, most expertise engagements would tend to require a high percentage of senior professional time, due to the high diagnostic component in the work. Accordingly, we would expect the expertise practice area to be relatively unleveraged, with low fixed costs and high margins. The firm would make its profits through high billing rates or some form of value billing, justifiable and sustainable because of the criticality, complexity, and risk in the client engagement.

Optimal marketing of an expertise practice matches closely the forms of practice development traditionally in the professions. Since for this type of critical engagement the client would be seeking the best available talent, prominence and reputation would be the keys to winning clients. The best practice development techniques would be writing articles or books, giving speeches or being quoted in the appropriate media, thus establishing credentials as an “expert.” Practice development would tend to revolve more around building the reputation of individuals rather than the firm, as in the common client comment “I hire lawyers, not law firms.” Reputation within the profession would play an important role in practice development.

Since few clients would have regular ongoing needs for top-flight critical expertise, the client mix of professionals practicing in this area would tend to be diverse, and constantly shifting. With relatively low leverage and an up-or-out system, the internal pressure for growth would be less than in other practice area types and (appropriately) growth would not be a major goal for the firm.

As in all aspects of firm management, the best form of governance in an expertise-based practice area would fit the traditional professional mold: a collegial partnership of peers headed (if at all) by a leader who symbolizes the firm’s commitment to high standards. Decision making would be by consensus, and management (to the extent that it existed) would largely be accomplished by inspiration. The autonomy of the individual partner would be among the most supreme virtues in the firm, with little use made of formal internal structures. No individual or group of individuals could be said to “own” the firm. Rights to participation in the firm’s future profits would be “given away” by senior professionals in order to retain top talent.

Excerpted from ‘Managing the Professional Service Firm’ by David Maister, pages 23-24