Practice and Sector Focused Strategies In Professional Service Firms

In our article “The Unique Challenges of Developing Strategic Plans for Professional Partnerships” we looked at how the structure of partnerships can cause problems with developing a strategic plan for the firm as a whole.  The main reason for this is that partners can adopt a what we call the ‘bunker’ mentality where they jealously guard their autonomy to use their own time (billable or non-billable) as they see fit, and will tend to resist giving authority to anyone on such things as how they will staff their own jobs or what practice development activities they will conduct.

Consequently, is it difficult to persuade partners to act collectively and make joint decisions (with mutual responsibility to each other) on strategic issues such as practice development, operational activities, knowledge management, etc.

In these circumstances, unless the partners are willing to accept that the way that they are working in not in the best interests of the firm as a whole, traditional strategic development tools will not work on a firm-wide basis.  Consequently, if the firm still wants to develop a strategy that will help it succeed we need to look for other ways to create workable strategies for these types of professional service partnerships.

Loosely organised individuals, accountable only for their own performance, are less likely to succeed in this area than would a well-managed team engaging in collective activities with collective responsibilities.

Our experience of working in this situation has lead us to believe that the best way to create a strategy that will work is to accept that partners will continue to work in their bunkers and use that to the advantage of the firm as far as is practical.  There are two strategies that can be employed here which can be applied independently or in conjunction with each other.

1.    The Practice Area Strategy

Here we create a separate strategy for individual practice groups within the firm.  By focusing of the practice group we enable the individual partners to develop their own strategy for the future of their area of expertise. Normally, however, a practice group will have more than one partner specialising in the particular area of expertise.  One would hope that these partners, who have a common purpose, would be more likely to be willing to work together to set objectives and create and, more importantly, implement a strategy for attaining them.

2.    The Sector Focused Strategy

In some firms the partners are unable to work even at the practice group level.  In these circumstances it is possible to reduce the size of the group (i.e. the number of partners involved) by taking a sector focused approach to strategy development.  Here we create a strategy for each group who work in a particular sector – which is a more specialised area of work that is normally contained within a particular practice group.  For example, in the legal profession there may be a team within the corporate team that have particular skills, clients and reputation in the Intellectual Property sector or within the Franchising sector.

If the firm has a strong skill set, client base and reputation in certain market segments then a sector focused approach to strategy development may be appropriate.  With this type of strategy we focus on building the strength of the firm in those sectors, setting sector-specific objectives, strategies and plans.

Market sectors are more likely to be services by a single partner with a support team so the inter-personal and professional barriers are less of an issue.  However, it is possible that a sector may be services by more than one practice area, in which case cross-practice cooperation and communication would be required for this approach to succeed.

Creating the strategic plans

In both the practice area and the sectorial approaches, the essential first step to creating the strategy is that the members of the group must decide whether they are prepared to make the shift from a loosely affiliated group of independent practitioners to acting as a team with a common purpose. They must make an informed, conscious decision to give up a few degrees of autonomy in exchange for the benefits that are to be gained (see below).

It should be noted that there is no requirement that each and every practice or sector group in the firm selects the same set of objectives or strategy.  Indeed since different groups may be at different stages of development and will have different priorities, it is likely that each group will have different objectives and different ideas on how to attain them.  It is, however, important that each group’s objectives are clear both to the group but also to the firm.  By aligning the objectives and strategies of each group we can effectively create a strategy for the firm as a whole.

No matter which type of strategic option is chosen, each group should elect a leader who will be responsible for ensuring that activities are coordinated and agreed activities are carried out in order to attain the objectives set out in the group strategy.

There are many benefits to having of a well managed, coordinated teams,  including:

1) More effective practice development efforts through pooling and coordination of individual efforts

2) Better utilisation and development of junior professionals through collective decisions on staffing of client work, allocation of resources and mentoring

3) Collective development of tools, templates, databases and other practice aids to benefit everyone

4) More rapid and effective dissemination of expertise and skills among the group

5) Better client service through greater ability to put the right people on the right job

6) Better market image through development of a collective reputation, not just the sum of individual reputations

7) Comfort of “belonging” to a small group rather than being “lost” as one member of a very large group of professionals

8) Improved profitability from focusing as a group on ways to enhance billing rates and leverage

9) Critical mass of time and resources created to develop innovative service offerings, which no individual could afford to do alone


A ‘loan wolf’ strategy of allowing every partner to operate as an independent business is unlikely to produce the results for the firm as whole that they would be working together.

If the structure of the firm and/or the personalities of the partners of such that working together as a collective unit is not feasible then a practice area group or sectorial approach to strategy development are potentially viable alternatives as the require buys-in from smaller groups and allow the partners to retain more autonomy than they would in the large firm structure.

In addition, there are distinct advantages to be had from these approaches to strategy development which include improved client service and reputation, improvements to efficiency, increased profits, more skilled staff and better morale through creating a set of common goals that everyone is committed to achieving.

No team can succeed without a leader so not only must the goals of the practice group be written down and agreed upon, a suitable leader should be appointed who everyone respects and trusts to coordinate the activities required to enable the group to achieve its objectives.

Finally, linking the objectives of the different groups together will help find commonalities in goals as well as in activities that will be more effectively carried out across the firm as they will benefit all of the groups.  Over time the groups will see the benefits of working as a team and this will naturally change perspectives and opinion of the key people in  the firm which will translate into a firm-wide strategic plan and shared vision for the future.


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Related Categories:

Partnerships & Professional Services

Additional Resources:

Corporate Structure, Creating Strategic Plans for Partnerships, Creating Strategy Model, Professional Services Sector, Types of Strategy