Big guns join the professionals

As services firms become the envy of their clients, so they attract the brightest talent. Roger Trapp reports

THERE is little doubt that professional services firms - essentially collections of lawyers, accountants, management consultants and advertising people - will become one of the key business forces of the next millennium.

Already, the largest of these organisations are proving hugely influential as well as immensely wealthy. One only has to look, for instance, at the prominence in high places of some former employees of the management consultancy McKinsey. Among their number are Howard Davies, chairman of the Financial Services Authority; Adair Turner, head of the Confederation of British Industry; and William Hague, leader of the Conservative Party.

When it comes to the deals that oil the wheels of capitalism, it is hard to find one where Goldman Sachs, the highly successful investment bank, is not involved in some way. Meanwhile, Andersen Consulting has come out from under the shadow of the staggeringly fast-growing accounting firm Arthur Andersen to become the first port of call for many organisations - both public and private - looking for a complex information technology project to be put in place.

Lately, some of these organisations have indicated that they are looking to grow even faster by demonstrating an interest in selling off at least a part of their equity.

Many people believe such a move is behind Andersen Consulting's complex attempt to split itself from the mother ship, while Goldmans was on the verge of such a deal when the international financial crisis blew up. Only last month, the UK chiefs of the accountancy and management consultancy firm KPMG said they were considering floating a portion of their fast- growing consulting business.

But while such developments indicate that the biggest names in professional services have moved a long way from being small groups of people working behind discreet brass plaques, there is a sense in which they continue to behave as if this were still the case.

This is partly because of the partnership structure that makes significant numbers of employees owners of the business, even though day-to-day management decisions are devolved to small groups. But it is also because such people tend not to fit naturally into the corporate ethos.

Combine all this with the clear evidence that the best of these firms are growing much faster than the industrial companies they advise, and it is little wonder that some of those clients are seeking to emulate some of the attributes of the professional services firms - notably by giving individuals greater responsibility and by working in teams.

But they have little chance of catching up, simply because the firms have something they - to a large degree - do not: brain power.

As Mark Scott, a former executive with the media group WPP and author of a book on the currently hip subject of shareholder value, points out: "The dominant flow of people talent is from clients to service suppliers as professional firms hire away smart client individuals to institutionalise their relationships."

He adds - in The Intellect Industry (John Wiley & Sons, pounds 19.99) - that larger organisations which have tried to carry out such functions as advertising or corporate finance for themselves have tended to fail because "they can't do the single most important thing right: attract and retain the highest-calibre professionals".

If you doubt the extent to which this is true, go and talk to firms such as KPMG, Deloitte & Touche and Andersen Consulting about how they are increasingly looking for people with experience of particular industries as they turn their firms into collections of true experts rather than gifted generalists.

Once that sort of thing happens, it is a relatively straightforward jump to what one insider calls "the creation of a new kind of firm".

Pointing out that consultancy is ceasing to be an accurate description of what some of the largest organisations do, he adds that firms like his have become "facilitators helping large-scale organisations achieve goals that they haven't been able to achieve by themselves".

Mr Scott seems convinced that this is an unstoppable trend. He predicts that the biggest firms will become much more visible than they currently are.

And one of the ways in which this will be brought about is by the firms breaking out of their specialist sectors - such as accounting or law - into a broader provision of services.

That has certainly happened in his old sector of marketing services, where advertising agencies have bought PR consultancies and other specialist operations. But it is not so obviously true of such traditional professions as law and accountancy, where Arthur Andersen, for example, has had great difficulty recruiting a significant law firm to its stable.

Be that as it may, consolidation in the professional services firms will doubtless continue, and those that emerge at the top of the heap will continue to attract the best and the brightest.

This is simply because they offer the opportunity to do interesting and well-paid work in a sector that is seeing the sort of growth most others can only dream about.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk