Governing the professional service firm

Professional service firms – lawyers, accountants and the like – are a special kind of beast, but one with interesting parallels in other occupations. Moves to make these firms – traditionally partnerships – into something more like a joint-stock company have changed the ethos of firms to some extent. But they are still of a different character to normal companies. Professional service firms can draw less on hierarchical structures to create control. The allegiances of the professionals themselves are to clients, other professionals and to the profession itself. In the days now largely departed of unlimited liability for professions, adhering to standards was of profound importance, making these firms impediments to change even as they were the upholders of standards. Laura Empson at Cass Business School in London has written a brief note that describes the model of the tensions a professional service firm faces. It helps to understand how the governance of such organisations must be different. But it's useful beyond the professions. What she describes is a model of a knowledge-based business, too, where the means of production is firmly in the hands (and brains) of the workers. As other businesses become more knowledge-based those tensions will arise there as well. While the professionalism of the professions may be under threat from taking on more corporate-like approaches to their business, corporations may need to foster more a profession-like ethos to ensure quality.

Source document: The discussion note, A summary of "Beyond the firm: a new way of looking at professional service firms" by Laura Empson, is a three-page pdf file.