Professional services index launched

Last week, the Managing Partners Forum (www.mpfglobal.com) – in conjunction with Noble investment bank – launched its professional services index signalling the maturity and importance of the publically listed part of the professional services market and addressing its relative non profile amongst investors and analysts. 70 firms are listed in London in this segment and the MPF Professional Services Index is designed to help investors, firms and funds to track the performance of listed professional firms - a fast growing and highly profitable asset class.

The index addresses the fact that there is no official industry classification benchmark (ICB) and so professional services is not tracked as a sector and there are no investment funds specialising in the sector – yet it accounts for 16% - 20% of the UK economy. The premise is, of course, that increasingly professional firms will decide to list on public markets and will therefore need to encourage investors to appreciate their profitability, growth and resilience. A timely move particularly in view of the changes in the legal sector as part of the Legal Services Act that will allow such external investment within just a few years and as the world in general falls out of love with the broader banking and financial services sectors.

There are 35 companies in the sector – as they excluded financial services companies and those with a market capitalisation of below £20m or above £1bn - and the top 15 are shown below. As well as offering a methodology for valuing professional firms, the MPF also offers a definition of a professional firm:

• 80% of an organisation's core business activities must require a specialised knowledge of a subject, field or science, and satisfy at least four of the following six criteria:

• Involves higher level education and usually a formal qualification.
• Regulated by a professional body, licensing authority or similar.
• Has an ethical code of practice.
• Do not derive significant financial benefit from service or product providers that are recommended.
• Services can be infrequent, technical or unique.
• Selection is usually based on a mix of skill, knowledge, reputation, ethics and creativity.

The first report shows that the new index outperformed FTSE AIM UK 100 but was more volatile than the FTSE 350 Support Services index and the FTSE 350 (excluding investment companies) indices.

1. Aegis Group plc (Media)
2. WS Atkins (Support services)
3. Savills plc (Real estate)
4. RPS Group plc (Support services)
5. BPP Holdings plc (Support services)
6. WSP Group plc (Support services)
7. NCC group plc (Software and services)
8. Begbies Traynor Group plc (Support services – Insolvency and accounting)
9. RWS Holdings (Support services – Intellectual Property)
10. Management Consulting Group plc (Support Services)
11. Clarkson plc (Transportation)
12. DTZ Holdings plc (Real estate)
13. Huntsworth plc (Media)
14. Tenon Group plc (Financial general - accounting)
15. Charles Taylor Consulting plc (Financial General)

Other familiar professional services firms included are: Murgitroyd (Patent and trade mark attorneys), Penna (human resources) and Vantis (accounting).

London Estate Agent of the Year?

While Hollywood has the Oscars, here in London we must make do with the Estas. The Londonpaper has launched the "London Estate Agent of the Year" awards and the winner will be announced next month.

There are 12 nominees, and on the shortlist are:

Crompton Estates in Deptford
Faron Sutaria in Notting Hill Gate
John D Wood in Fulham
Knight Frank (four branches in South West London)

Also named are:

Living Residential in West Hampstead
Martin & Co in Kensington & Chelsea
Richard James in Mill Hill
Young London in Camberwell

Wonder what they had to do to qualify? Surely, in the current property market, surviving would be cause for celebration.

Professional service firms doomed to become pirates and gladiators?

There was an interesting article in The Times last week (17th March). Sir Michael Snyder (Senior partner at accountants Kingston Smith and a former policy Chairman of the City of London Corporation) made the following observations regarding the Professional Services Global Competitiveness Group report:

• The professional services industry employs more people than any other in the UK
• It is also the largest sector by output, contributing 8% of GDP and providing a trade surplus of £2.46billion in 2007
• The UK will see a 12% drop in 18 to 21 year olds between 2010 and 2020 affecting recruitment by professional service firms
• By 2020 the professional services industry will be global and border free

The report advocates a solution to the complex and critical issue of “joint and several liability” affecting UK partnerships and called for changes to the taxation system for reinvested profits of partnerships and to eliminate double taxation.

But the article focused on the views of Laura Empsom – a banker/strategy consultant/academic who is a professor in the management of professional service firms at Cass Business School. She fears that professional service firms may be following the same path as bankers.

She argues that the collective ownership, professional ethics and long term loyalty have taken a hit as firms have cut loose partners and staff in response to the recession and this will impact motivation and retention in the future. Then firms may be tempted to address this by paying more. This, she argues, makes everyone much more individualistic – focusing on personal financial gain rather than the good of the firm. (Funny, but I thought that they were already pretty individualistic!)

She uses a matrix plotting individual commitment against management control and argues that professional service firms aspire to the top right hand box of “Band of Brothers, Henry V” style of management with high commitment and high control. And argues that if commitment is lost they end up at the bottom of the grid with the pirates and gladiators. Gladiators – as long as they are a brilliant fighter – are controlled by management but become celebrities, make shed loads of money but had a rather short life span. Wondered why so many partners I deal with are calling themselves Maximus!

Property marketing - That's the way to do it!

When writing my book (Growing your property practice - due out in May) I researched a lot of property partnerships and companies to see how the best were dealing with marketing and promotion (amongst other things).

And reading my London newspaper last week drew my attention to another example. In the distant past I had been a judge for the PAMADA (Property Advertising Marketing adn Design Awards) sponsored by Estates Gazette and the Company of Chartered Surveyors. And I remembered that Kinleigh Folkard & Hayward had won a number of awards.

And there was a big bold advert from them with the heading "No one's more at home with London property" with the simple message "When you're looking to buy, sell, let or rent, no one's better placed to help". I had a look at the web site and sure enough the strong branding (burgundy colour, drawing of a woman at home, swirly pattern) was there to make the connection with the advert (integrated marketing!) and a nice strapline "Completely London".

The web site is clean and professional. It is well structured, with sections for residential, commercial, investors and developers. There are buttons to request a survey or a valuation. There's also an easy to read 11 page survey with comments on the London market and some key areas. There are options to keep up to date with developments either by email or RSS feed. The traffic rankings show that the site generates a good amount of traffic and that there has been a sharp increase recently - possibly as a result of this campaign.

Many people cut back their marketing and advertising budgets when the markets are tough. The smart people recognise that your marketing bucks make a much bigger bang when the competitors have all tightened their belts. The campaign signifies either confidence that the London market is picking up or that the firm knows that its marketing strategy is on the right track. Either way, it's good to see.

50 offices and 600 staff isn't exactly a small firm - but it's not as big as some. Which just goes to show that the best marketing isn't always from the biggest firms. Nice one!

Task, tool and message?

As I draw to the conclusion of this term's various lecturing commitments for the CIM marketing communication diploma classes that I teach, my students are preparing their assignments.

One of the key concepts that underpins most of what is taught in this course is the relationship between task, tool and message. The beauty of the best concepts is that they both simplify and illuminate:

Task - What is it that you are trying to achieve?
The first and most important task is to define what it is that you are trying to achieve. And to produce some SMART objectives? Are you trying to create awareness? Improve awareness? Change perceptions? Make an impact? Drive traffic to your web site? Generate leads? Get people to attend an event? Initiate a dialogue? Convert interest to business? Get more from an existing client relationship? No doubt your campaign comprises a number of different tasks and these need to be set out first.

Tool - What is the best tool to tackle this task?
It may be that you must break down the task into a number of component parts and then look at the best tool for each. It may be that you can forget all about advertising and PR and focus on a concentrated sales campaign.

Message - What is it that you must communicate?
Too often the message is unclear, confused, bland or too complicated. The core message needs to address the client's needs, in their terms, and show what value will be delivered. The message must also be sufficiently distinct from what your competitors or the alternatives might offer.

Consultancy fee rates

I read with interest an article in the press in the week - it related to the £7bn that the Government spends each year on consultants and external advisers (excluding those on IT projects which is estimated at a further £4.5bn pa).

It showed the typical rates charged:

£1,750 Managing consultant
£1,445 Principal consultant
£1,225 Senior consultant
£1,000 Consultant
£700 Junior consultant

It also suggested that 70% of consultant projects do not deliver any results! Luckily the Government has a Consultancy Value Programme in place to try to improve the situation. That's all right then.

Whilst wondering how I can position myself as a managing, principal or even senior consultant it occurred to me that many lawyers have charge out rates of £500 an hour - which equates to £4,000 a day. Maybe I will consider retraining after all...

Lawyers find campaign management most valuable tool

For one of my law firm clients I return each year to deliver two modules of their Management Development Programme – one is on strategic marketing (and the link with the business plan) and the other is on tactical marketing and selling – for the latest batch of “management trainees” who are usually partners, associates and senior support managers.

As part of the feedback and evaluation process, I always ask each individual what frameworks, ideas and concepts they found most useful. As you would expect, the responses vary each time depending on the particular challenges they face from a market perspective and from their own backgrounds.

However, I was surprised this week that several of the same group indicated that the most valuable thing they learned about was campaign management. How you blend together the different tools – research, market analysis, knowledge development, target list building, awareness raising activities (including PR and direct/digital marketing), contact marketing (seminars, networking) and integrate them through to selling (meetings, presentations, proposals and conversion) and referrer or client relationship management.

And most of them had produced sound plans showing what they intended to do in marketing and sales terms over the next few months. It is usually really hard to get lawyers enthusiastic enough to write marketing plans.

Sometimes we marketers take for granted the most simple and fundamental ideas...