Thoughts on ways to improve the management of professional services firms

Tuesday, October 24, 2006

Corporatisation in Professional Services - Stocktake of Posts as at 24 October 06

I had been going to write a story on Integrated Legal Holdings Ltd, the first IPO involving a legal practices in this country and perhaps one of the first in the world. Certainly I have not seen the issue discussed on any of the international sites I review. However, before doing so I thought that I should provide a stocktake of posts linked in some way to corporatisation since I will be drawing from this material in discussion.

Previous posts are:
  • In only my second post (4 July) I looked briefly at the difference between self-employed professionals and business builders. The first group, the majority by number, focus on return from cash flow. The second focus on building a business looking for a return from the combination of cash flow and business sale. This leads to significant behavioural differences.
  • In the following post (also 4 July) Selling your practice: the self employed professional case I suggested that even self-employed professionals should take sale possibilities into account.
  • On 8 July I looked at the need for role clarification within partnerships in order to improve management and governance. This included the separation of returns on capital from payments for work. Once this was done, I suggested, the definition of roles and the remuneration to be attached to those roles could then be dealt with using conventional job analysis and remuneration principles.
  • On 11 July I introduced the topic of mergers, acquisitions and the abolition of goodwill. I began by looking at the resistances and practical difficulties that would need to be overcome if returns from equity and capital were to be separated. I then suggested that separation of returns from equity and capital was linked to another issue, the increasing trend towards mergers and acquisitions within professional services, a trend associated with changes including demographic change placing pressures on both smaller and mid size practices to get bigger or get out. I then looked at the implications flowing from moves by some firms to abolish goodwill, suggesting that this created its own problems.
  • On 14 July I looked at the question of consolidation among accounting firms and especially the way that the WHK Group was using tuck-in acquisitions.
  • Then on 31 August in corporatisation in the Australian legal sector I foreshadowed a major series of posts looking at the Australian corporatisation experience across sectors. However, I then explained in on 6 September in corporatisation in the Australian professions - reasons for delay that I had met some practical problems including just how much to explain about the Australian system and that I had therefore put the matter on hold until I worked out the best way of handling it.

Previous Stocktakes


Noric Dilanchian said...

With such an impressive background stocktake, I look forward to your forthcoming piece on corporatisation in professional services!

Jim Belshaw said...

Thanks, Noric. Comment much appreciated.