You are here
'Uberisation' of professional services brings challenges and opportunities
DESPITE being relatively shielded from disruptive forces, law and accounting firms would do well to plan ahead for leaner times by being more flexible, collaborative and specialised, say members of a recent high-powered panel of experts. The challenge is to be more efficient as margins erode with the "Uberisation" of professional services, and when technology offers cheaper alternatives for corporate customers and consumers in future, they point out. The cautionary tale comes from a discussion panel on May 26, as part of the Canon Think Big Leadership Series jointly organised by The Business Times and Canon.
"I have no doubt that lawyers will continue to be relevant during our lifetimes and those of our children, and that many lawyers will continue to organise themselves in firms," said Professor Tan Cheng Han, Senior Counsel and Chairman of the Centre for Law and Business at the National University of Singapore.
"At the same time, we must acknowledge the strong forces that are likely to reshape and challenge present notions of legal practice and by extension the way many law firms operate today," he added.
With globalisation, Prof Tan said more law firms would partner with overseas counterparts. At the same time, revenues will likely come under pressure from both corporations and individuals, especially the well-off who have bargaining power, he noted.
Technology is yet another big reason for disruption, agreed all the panellists at the event. And this is set to change the way both law and accountancy firms function in the years ahead. For example, in the United States, websites such as Legalzoom are offering to draft customised wills and other legal documents for individuals at a fraction of the price a law firm asks for.
Typically, these disruptive online services would aim for the low-end of the spectrum to gain customers' trust and traction in the industry before they aim for other more lucrative businesses, said Ms Eliza Tan, Managing Director of LegisComm, a marketing consultancy for professional services firms.
Besides law firms, accounting practices also face the crunch as more small companies are exempt from auditing with a new regime last year, she added. "Many are expanding their consultancy services, as audit revenue shrinks."
All three speakers at the event point to opportunities for professional services firms that embrace the change, rather than deny it and postpone any effort to tackle the issue. Delay further and they might find themselves being "disrupted".
Lawyers and accountants could find a way to collaborate, said Ms Tan. With the combined expertise, they could offer a wider range of services to customers and be the go-to problem solvers for their clients, she added.
"Accountants and lawyers often work in silos and they were not much for collaboration in the past," she noted. "But now some law firms and accounting firms know they can work together and offer better services."
Competition could be the driver of this change. As professional services firms face a potential "Uberisation" or deregulation in their industries, they could find themselves in a more difficult position than before.
Prof Tan said if there was an "Uberised" model for legal services, then the bulk of what some lawyers do - transactional legal agreements and documents - could be offered by new competitors in the market.
"It is not difficult to foresee in the future that computer programmes will be so sophisticated that when provided with a set of facts it can produce a sound opinion or at least the most relevant precedents. In an 'uberised' model, law firms can again potentially be bypassed," he noted. The answer to the challenges posed is in being prepared and providing better value than what a basic "Uberised" model can offer, say the panellists. Professional services firms have to be deeper subject matter experts and better problem solvers. Mr Charles Loh, a Partner at PwC Consulting (Singapore), said one improvement he had seen at his firm was the sharing of knowledge among the different practices. Traditionally, the sector has been used to people working in silos, but if they can better share their expertise, then they can serve clients better, he added.
For example, despite not being short on talent and thought leadership at his firm, his company turned to technology to let people faster find the information they need to win a deal or solve a problem, he noted.
Indeed, problem solving is seen as the next important skill to acquire, as disruptions to the market force professional services firms to adapt and be more cost-efficient. "Lawyers need to be trusted advisers to their clients whether (they are) an MNC, an SME, or the small business person or individual," said Prof Tan.
"For example, an issue that has arisen may be symptomatic of a more fundamental problem that the lawyer can help to solve. Being a trusted adviser also involves helping the client to anticipate and therefore avoid problems in the future. 'Preventive lawyering' may be a growth area," he added.
"While much of this work as a trusted adviser will take place in the context of sophisticated clients with novel or unique issues or structures, firms can be trusted advisers to small businesses or individuals who because of a lack of sophistication may encounter legal problems," he argued.
He noted: "Or a firm can develop a suite or bundle of potential services that are useful to small businesses at a reasonable fee. To do this, they will have to spend a good deal more time investing in client relationships and knowing the client."
Ultimately, things could come down to making the best use of one's skill sets and data on hand to make the right decisions. Besides being compliant with local regulations, how can professional services firms take advantage of the uncertainty instead of worrying about it?
In an industry where information flow is rapid and unstructured, the challenge is making the best use of the data on hand, said Mr Vincent Low, Director and General Manager for Business Imaging Solutions at Canon Singapore.
Automation is also a smart way to save cost and increase productivity in a sector that sees a voluminous use of documentation. Mr Low mentioned that Canon's suite of business solutions covering print and document capture processes is able to support the entire document lifecycle and aid legal and accounting firms in their push for greater automation.
For more related articles, please read:
This page is brought to you by: