Now consider a firm whose practice-mix was made up predominantly of clients who, rather than needing the profession’s most creative talent, wanted to find a firm that had accumulated experience in handling certain types of problems, and would not take an expensive “start with a blank sheet of paper” approach to the problem. The marketing task of such a firm would be different. Rather than relying on individual talents, the firm would need to create more of an institutional reputation, based not only on the “raw” talent of key individuals but on the ability of the firm to bring to bear its collective knowledge derived from past engagements.

For such firms, practice development would involve identifying, documenting, and promoting their specialized knowledge, through brochures describing previous engagements, client newsletters, or special seminars on topics related to the firm’s particular area of experience. Experience based practice areas would tend to have a more clearly focused and stable mix of clients, with steady relationships becoming increasingly important.

In contrast to the “frontier practitioners,” the work content of the typical engagement would require less time spent on diagnosis and more on executing increasingly predictable (if still technically demanding) tasks. Accordingly, the ratio of junior to senior professional time would increase, with profits from increased leverage offsetting the generally lower billing rates. It is in this middle experience stage of practice area maturity that time-and-expenses billing practices would be (and are) most relevant and common in all professions.

The firm’s hiring needs would expand to include a major role for less skilled professionals and more paraprofessionals, since the increased structuring of familiar engagement types would allow the firm to employ an increasing degree of systems and procedures and hence require less mature talent. Training approaches would become increasingly formal with greater use of out-of-hours classroom sessions and practice manuals.

Since individuals who had worked in the firm for any period of time and absorbed the knowledge and skills of the firm would remain productive and marketable team members even if they did not have the abilities to progress to the top rank, there would be less need for the firm to enforce an up-or-out system, and it could make use of a system of “permanent associates,” While the need for senior talent would remain high, the group could accommodate a broader array of talents since it would have the ability to empower an individual by supplementing his or her talents with the experience base of the firm. Hiring could not only be more broad based (the group would not have to restrict its attention purely to the upper reaches of the grade-point average), but could accommodate increasing numbers of lateral experienced hires. Training would need to become a little more formal and structured in order to capture and disseminate internally the firm’s experience base.

Because of a greater requirement for team approaches in delivering services, the need to disseminate internally and organize the firm collective experience and knowledge, professionals in the firm would become more interdependent and there would be a greater need for formally recognized departments and areas of specialization. The managerial task of focusing the collective efforts of the firm’s principals around carefully chosen areas of experience would become increasingly important, and firm management, a more clearly delineated position, more formally recognized.

While growth might still be controlled, there would be increasing pressure to provide career opportunities to the proportionately larger number of junior professionals who had accumulated valuable experience that the firm could ill afford to lose. Since the value added that the firm brings to its clients would be less embedded in individual people and more in the firm’s collective experience, a greater sense of equity ownership would prevail, and new partners or shareholders might be required to buy their future participation in firm profits by contributing to partnership capital or, in some instances, purchasing shares.

Excerpted from ‘Managing the Professional Service Firm’ by David Maister, pages 24-26