Valuing differences: How accountants and lawyers can work together

The Solicitors Regulation Authority has awarded more than 200 licences since it was first granted the right to regulate alternative business structures (ABSs) in the UK two years ago. Most applications up till now have come from law firms seeking external investment. But, that pattern started to change on 1 April 2013 when Price Bailey Legal Services received
a licence to join up with an accountancy firm in a multidisciplinary practice (MDP).

This development signalled further innovation in the structure of professional services firms, and the diversity of their offerings to clients. For all the talk of external investors, the accountants with their business-like attitude and their natural understanding
of what both clients and professionals want, are likely to be
a major force in reshaping the legal market.

The announcement surrounding PwC Legal’s ABS licence
in January 2014, therefore, did not come as a big surprise to the market. It had been known for some time that the big accounting firms were also weighing up the opportunities that the Legal Services Act offered them. What was notable, however, was the way that Shirley Brookes, PwC Legal’s senior partner, described the move: “It supports our ambitions to further invest in people and skills, and underpins the focus of both firms on delivering value and quality to clients through strong relationships.”

Creating value for clients is the obvious driver, and quite rightly so, but it appears the firm sees just as much value in the opportunities to invest in its people. PwC Legal will no longer
be required to work as a separate firm within the PwC network –
and that opens up the potential for interesting new career paths and blended skill sets. But, how easy will this be to pull off given the fundamental differences between accountants and lawyers
in the way that they practise?

Back to the future?

In some ways, the creation of MDPs is nothing new. Back in the 1990s, four of the then ‘big five’ accounting firms set up associated law firms. But, despite considerable investment
and fanfare in the market, the outcomes were not a great success. Ultimately, the MDP concept fell foul of the USA’s Sarbanes-Oxley Act of 2002, which made the cross-selling of services to audit clients difficult.

The experiment also proved just how challenging it was to bring professionals together from different disciplines and create a common brand and culture. So, what will be different this time, and how can firms ensure that two plus two really does make five for both their clients and their people?

A question of culture

Despite their common roots as traditional professions, lawyers and accountants often perceive more differences than common ground in their approach to professional practice. Lawyers consider client confidentiality as key
to their modus operandi and can be disparaging about accountants not putting their clients above all other interests. Accountants, on the other hand, see themselves as much more focused on serving the public interest and taking an objective approach.

Accountants tend to be team-orientated, process-led problem solvers, with excellent project management skills. They start their business education early, alongside their technical training, and aspire to be seen as business advisors rather than technocrats. Lawyers, on the other hand, value their autonomy; they are fiercely independent and excellent at forensic technical analysis and advocacy. Accountants instinctively focus on the numbers and business issues; lawyers instinctively focus on the principles and technical arguments.

In reality, however, the professions have much in common with each other. They value technical excellence, hard work and client service. They set the highest standards for ethics and integrity, and they are committed to continuous professional development.

By combining forces in a truly integrated professional services firm, the opportunity arises for professionals from different disciplines to challenge each other and to learn new techniques and skills from each other. What it requires is integrated career planning and training curricula, supported by mutual respect and
an openness to change.

Business acumen

All professionals require a technical training foundation that gives them the knowledge, skills and experience to qualify in their chosen profession. For many, the prospect of crossover in the broader training undertaken by other professions would be seen as too difficult or lacking in value.

However, increasingly within single profession entities, firms are having to grapple with ways of integrating the professional development of lawyers or accountants from different countries, where the training provided and individual expectations may vary enormously. An approach based on deep local technical training and broad commercial education is starting to emerge, and it is one that MDPs can learn from.

To maximise the real value of an MDP, there needs to be
a structure that facilitates the completion of the technical training required by each profession, while also offering opportunities for individuals to gain an understanding of concepts from other professions that will hold them in good stead as their
career progresses.

With seniority, it becomes important to share a wide commercial understanding of a client’s issues and how they might be solved. The best lawyers have always been able to read a balance sheet and discuss financial considerations, just as the best accountants have always had a clear understanding of risk and legal consequences. In an MDP, it will be possible to provide integrated training in business and leadership skills with opportunities for cross-training, using experts from within the firm to share knowledge and enhance the overall skills capability of the firm. For the professionals themselves, it also provides a more varied and interesting learning curriculum –
a true business education.

 

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Key steps for people-led MDP integration

1. Common recruitment branding across disciplines

2. Universal induction for all professionals

3. Technical training supported by shared business skills learning curricula

4. Common performance management and feedback processes

5. Cross-discipline mentoring

6. Openly-advertised opportunities for secondments across all practices

7. Cross-fertilisation of leadership appointments

8. Nurturing a culture of mutual respect and knowledge sharing

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Talent pooling

The prospect of working with a firm in which talent can be sourced from a wide variety of professional disciplines, with
a common set of standards and methodologies, is an attractive prospect for clients. The concept of a one-stop shop may have been seen by some as unworkable in the past, but increasingly,
in a world of complex business issues, there is real value to
be added from teams that can take a broad commercial perspective while offering deep technical advice and insights
in a coordinated offering.

For individual professionals, it offers the prospect of team working and collaboration with a wide range of colleagues. It also diminishes the frustration of dealing with professionals from other firms with different interests and priorities.

In a world where career progression within firms is limited
by diminishing opportunities to become a partner, and by a narrow set of alternative positions, being part of a broader firm will attract young professionals as the opportunities to diversify their careers into new areas of expertise start to emerge.

Lawyers will have the opportunity to work more closely with clients, to develop advisory roles and to work on matters within a broader context. New opportunities in risk, compliance, knowledge exchange, research and managerial or leadership roles will be opened to lawyers in ways that a law firm on
its own would find difficult to provide. Accountants will have
the chance to practice across boundaries, to work with lawyers in teams and to gain new insights into risk, contracts and corporate governance.

Introducing cross-discipline mentoring schemes where the skills and insights of one profession can be shared and adopted by another, and through which intra-professional myths can be challenged, is another way of adding value to the professional capabilities of a MDP.

Personal development

The accounting profession has long been open to feedback,
with many firms operating sophisticated systems with high levels of participation. Such schemes encourage a sense of self awareness and provide resources to individuals to help them take responsibility for their development and enhance
their performance.

In other professions, there has been greater resistance
to techniques such as 360-degree feedback and peer review. Lawyers are notoriously unwilling to expose their areas for development in this way, and shy away from both giving and receiving constructive feedback beyond marking up a document.

By combining professionals within one organisation, it should be possible for the most sceptical to explore the benefits of feedback from those with experience of giving and receiving it. Cross-functional feedback processes would also enable individuals to gain insights into how they come across, and what their perceived strengths and weaknesses are, from a colleague with a different perspective.

The advantages of creating a more open culture, where feedback and self-development are the norm, are obvious.
They extend not just to personal development and internal culture, but also to higher levels of client service.

By becoming more self aware through feedback and participating in common performance appraisal systems, lawyers and accountants will also be able to take greater control of their own careers by actively seeking out assignments and principals from which, and from whom, they can learn. Developing a transparent internal market of career opportunities is a key way
of supporting this.

Competitive advantage

Many argue that the existing accounting firms and newly emerging MDPs will never provide real competition to traditional law firms, especially the larger ones with strong reputations for top quality work. That may well be the case given the narrow range of practice areas the new entrants to the legal sector are likely to provide.

What needs to be considered, however, is the competition for talent, particularly as the world economy recovers. MDPs will have the chance to build strong employer brands based on enhanced opportunities, investment in skills and more varied career paths. Young professionals will have the opportunity to join an MDP as they start out on their careers and take advantage of a broader business education programme. Others will have the opportunity later on in their careers to move to an MDP to take up new roles outside the constraints of the firm they trained with.

Enriching the professions

The increasing commoditisation of professional services and use of technology has long risked the dilution of the true value and standing of the traditional professions. The trend is also leading to fewer opportunities for challenging work or personal development for professionals in their chosen field.

If successfully managed, the emergence of MDPs could challenge and ultimately change that inexorable trend. They provide the opportunity to cherish and make a virtue out of what the legal and accountancy professions have in common, to share their professional differences as a means to broaden skill sets, to widen commercial horizons and to develop new and more varied career paths.

Jill King is a consultant and the former global HR director at Linklaters (www.jkinsights.co.uk)