The Firm of the Future: A Guide for Accountants, Lawyers, and Other Professional Services / Edition 1

The Firm of the Future: A Guide for Accountants, Lawyers, and Other Professional Services / Edition 1

by Paul Dunn, Ronald J. Baker
     
 

The professional service accounting firm is being threatened by a variety of factors: new technology, intense competition, consolidation, an inability to incorporate new services into a business strategy, and the erosion of public trust, just to name a few. At the same time, most experts agree that morale in the financial services industry is at an all-time low

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Overview

The professional service accounting firm is being threatened by a variety of factors: new technology, intense competition, consolidation, an inability to incorporate new services into a business strategy, and the erosion of public trust, just to name a few. At the same time, most experts agree that morale in the financial services industry is at an all-time low–an astonishing number of professionals respond in surveys that, if they had to choose their career over again, they would choose another line of work. What happened? How have the once distinguished and proud professions become so beleaguered, and is there any relief for those professionals who refuse to worship the capricious god of the almighty billable hour?

There is relief. And promise. And hope. In The Firm of the Future: A Guide for Accountants, Lawyers, and Other Professional Services, visionaries Paul Dunn and Ron Baker confront the tired, conventional wisdom that continues to fail its adherents, and present bold, proven strategies for restoring vitality and dynamism to the professional service firm. A cornerstone of Dunn and Baker’s program is conducting successful transitions to new services that customers value, treating functions such as consulting as extensions, not alternatives, to traditional services. This, however, is only part of a framework aimed at liberating professionals from mechanically pursuing billable hours ad infinitum. Dunn and Baker provide proven strategies for pricing in accordance with value and develop leading Key Performance Indicators that measure success the same way customers do. The authors articulate a new theory of the professional service firm that focuses on the real factors of leverage for the firm of the future, and which tosses the antiquated theory of leveraging people and hours onto the ash heap of history. Topics covered include:

  • Intellectual, human, structural, and social capital
  • Converting tacit know-how to explicit knowledge
  • Total Quality Service
  • Value Pricing
  • Strategic planning
  • Financial model reform

Readers will learn how knowledge has slowly but steadily evolved to become the most precious factor in creating wealth, and how firms can leverage this intellectual capital to their benefit. The authors include many real-world examples of firms that successfully transformed their operations from the traditional model into a variety of old and new services that customers value. Take up the mantle. The Firm of the Future dares its readers to not only assume responsibility for improving their own careers, but also for restoring their profession to its former glory.

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Product Details

ISBN-13:
9780471264248
Publisher:
Wiley
Publication date:
04/18/2003
Edition description:
New Edition
Pages:
360
Sales rank:
685,755
Product dimensions:
10.00(w) x 7.00(h) x 0.81(d)

Table of Contents

Foreword.

Preface.

Acknowledgments.

About the Authors.

How to Read This Book.

1 Introduction.

2 A Flawed Theory.

“Analyzing” the Predominant Practice Equation.

Summary and Conclusions.

3 A Paradigm Worthy of a Prouvéd Profession.

Why Are Professionals Successful?

Cognitive Dissonance.

Why Are We in Business?

Study Success: It Leaves Clues.

What Business Are You In?

Where Do Profits Come From?

Summary and Conclusions.

4 Intellectual Capital: The Chief Source of Wealth.

The Physical Fallacy.

The Scarcest Resource of All.

The Three Types of IC.

Is All This Stuff Good?

Summary and Conclusions.

5 Human Capital: Your People Are Not Assets, They Are Volunteers.

Becoming a Lightning Rod for Talent.

Retaining Your Firm’s Human Capital.

The Importance of Continuing Professional Education.

Rewarding Your Firm’s Human Capital Investors.

When Human Capital Turns Negative.

Summary and Conclusions.

6 Structural Capital: If Only We Knew What We Know.

Leveraging IC and Creating the World’s Second Largest Currency.

Converting Tacit to Explicit Knowledge.

Knowledge Lessons from the U.S. Army.

Summary and Conclusions.

7 Social Capital: Man Is Not an Island.

Is There an Accounting for Tastes?

Leveraging the Social Capital in the Firm of the Future.

Reputation, Brands, Referral Sources, and Networks.

Suppliers and Vendors.

Shareholders and Other External Stakeholders.

Joint Venture Partners and Alliances.

Professional Associations and Formal Affiliations.

Firm Alumni.

Consider Creating a University.

Putting It All Together: The Concierge Service Model.

Summary and Conclusions.

8 You Are Your Customer List.

What Do Customers Really Buy?

The Value Proposition.

Moments of Truth.

What Is Beyond Total Quality Service?

Is Being a Trusted Advisor Enough?

From Zero Defects to Zero Defections.

Why Do We Lose Customers?

Customer Complaints.

The 100-Percent Money-Back Guarantee.

Bad Customers Drive Out Good Customers.

Adaptive Capacity.

Firing Customers.

The Forced Churn.

Thoughts on Requests for Proposals (RFPs).

Summary and Conclusions.

9 You Are What You Charge.

A Tale of Two Theories.

A Better Theory of Value.

Cost-Plus Pricing: Epitaph.

Deleterious Effects of Cost-Plus Pricing.

Lessons in the Subjective Theory of Value.

Professionals Subject to the Laws of Economics.

The Four Ps of Marketing.

Are Professionals Commodities?

The Five Cs of Value.

Fixed-Price Agreements and Change Orders.

Fixed-Price Agreements.

Explaining the FPA.

Change Orders.

Negotiating Skills.

The TIP Clause.

The Wrong Mistakes.

Value Pricing and Self-Esteem.

Value Pricing and Ethics.

American Bar Association’s Commission on Billable Hours Report.

Summary and Conclusions.

10 Measure What Counts: Effectiveness over Efficiency.

The Gospel of Efficiency.

Frederick Taylor Enters the Professions.

Economists Posit Theories.

Accounting Is Not a Theory.

It’s 12:41 A.M.: Do You Know Where Your Package—and CPA—Are?

KPIs for the Firm of the Future.

Selecting the Right KPIs for Your Firm.

KPI Summary.

Refuting the Efficiency Defense for Timesheets.

Refuting the Cost Accounting Defense for Timesheets.

Is There One Best Economic Denominator to Track?

Summary and Conclusions.

11 The Timeless Practice.

Paradigm Drives Vision.

Vision Drives Leadership.

Leadership Drives Internal Quality.

Internal Quality Drives Team Happiness.

Recasting the Roles.

Would You Want Your Son or Daughter to Work There?

Core Ideology = Core Values + Purpose.

Leadership.

What about Strategic Planning?

Summary and Conclusions.

12 Some Words on the Future.

Is the Audit an Edsel?

Financial Model Reform.

Substituting Government Failure for Market Failure.

Multidisciplinary Practices.

Summary and Conclusions.

13 Epilogue.

What Is Calling You?

Continuously Develop Your Intellectual Capital.

Adventure.

Leaving a Legacy.

References.

Index.

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