As a professional with most of his career ahead of him, the natural question arises:
For me, it has always been more than an academic question. Personally, I view it as a question of remaining relevant. With the exception of a short detour, I have spent my career so far in one professional services firm or another. Starting off in audit with one of the Big 4, I ended up doing a short contract gig with a small firm, found my way to a mid-size firm until life went full circle sending me to another Big 4’s tax practice after a short stay in industry.
Despite the difference in culture, size, and industry, common among all the firms I worked for was the all important chargeable hour. For those of you who have spent time in a firm, you will agree that billable hours are everything to a professional services firm. But have you ever considered this from a client’s perspective? Is a professional’s time really what they are interested in paying for?
No, clients are paying for someone to do their compliance filings, research into whether or not their operations are line with the latest regulations. If not, maybe advice on how to be compliant; something I like to call compliance certainty. I would argue this is a product and not a service. The clients do not care how this compliance certainty was created or how long it took (they only care because it affects how much it will cost them). Their main concern is that if the regulators or tax authorities come in the next day, no one is going to jail or face a large assessment.
In Comes the Product…
TurboTax is a great example of how professional services has become a product. Before, you would bring all your slips and receipts to your accountant to prepare your income tax returns. With TurboTax, you simply answer questions and the program will compile your income tax returns. You trust the returns are prepared in accordance with all the relevant tax rules and filing requirements, in other words, TurboTax has provided you with compliance certainty.
Although using an accountant or TurboTax will both result in being compliant with your income tax filings, the process are very different. With TurboTax, you never have to meet anyone from the company, all the interactions are done through the website. Furthermore and most importantly, TurboTax has essentially automated the income tax preparation process, there is no human on the other end to prepare the returns.
TurboTax was built for the consumer market, but I believe it will only be a matter of time before established companies and startups will start applying the same concept to the corporate compliance market. With the commercialization of emerging technologies like cloud computing, machine learning, and the brave new world of blockchains, the tools to productized professional services are here.
The consequences for professionals like you and me are going to be staggering. We will need to learn whole new skills and develop a new mindset. Forget billable hours, think subscription fees. Forget servicing clients, think product management.
Think I am off? Check out Blue J Legal’s Tax Foresight. If this is first time you have heard of them, better read up and catch up. They are just the beginning.