Abstract
Professional services firms (PSFs) have traditionally relied on professional partnerships as an organizational principle. This system was developed more than a century ago, when women did not actively pursue careers in professional services. Professional partnerships are very resistant to change and have managed to preserve their main features for decades. Their formal and informal practices still have exclusionary effects on female professionals. However, professional services firms are increasingly facing a deregulated, competitive, and very dynamic environment and are pressured by the labor market and client firms to rethink their stance on gender diversity. This chapter presents an overview of the management practices in professional services firms and outlines the major changes in their environment. Recent trends in changing management practices in the professional services sector and their impact on female professionals are analyzed. Implications for theory building and future research on management practices in professional service firms are discussed.
TopTypology Of Professional Services Firms
In the 20th century service industries, including accounting, law, engineering, and some others became dominant around the world. Currently, knowledge-intensive services constitute the fastest growing segment of the world economy (Gross et al., 2013). Professional services firms employ significant numbers of professionals, who apply specialized knowledge to serve their clients (Lopes et al., 2015). Usually, background of professionals is characterized by high-level skill, acquired learning, and commitment to ethical standards and their clients. Professionals are often required to demonstrate their expertise by continuing education, certification, and membership in professional associations. They are held in high esteem, assert their status and autonomy, and capitalize on their expertise by charging high fees. High-skill labor processes common in professional service firms require specialist knowledge, personal judgement and responsibility, as well as relatively high levels of trust in the ability of the professional to adhere to the highest standards of professional ethics (Danford et al., 2013; Fasterling, 2009; Krausert, 2014). Interest in professional service firms is fueled by the notion that due to their emphasis on professional work they are different from other types of firms and require distinctive organizational principles and management practices (Von Nordenflycht, 2010).
Key Terms in this Chapter
Professional Services: Occupations in the tertiary sector of the economy requiring special training and often holding professional licenses.
Up-or-Out: System or policy of employment in which an employee is either promoted or discharged. Under this system associate lawyers who fail to achieve partner status within certain number of years of being hired are required to leave.
Professional Partnership: Business formed by two or more professionals who provide professional services to the public. In professional partnerships all owners manage and operate the business.
Work-Life Balance: Proper prioritizing between work and non-work activities.
Managerialism: Belief in or reliance on professional managers and the concepts and methods they use; Application of managerial and business techniques and methods to the running of other organizations, such as professional partnerships.
Lockstep Compensation: A system of remuneration in which employees’ salaries are based purely on their seniority within the firm.
Human resource management: The professional discipline and business function that oversees organization’s work force.
Billable Hours: A standard charging procedure for legal services, which involves billing clients by the hour. Lawyers are expected to make enough money from billable hours to cover their salaries and overhead, partners’ profit share and generate revenue for the firm.