products and services that differentiate a firm from its competitors and improve its margins.

Practice groups can also make it easier for firms to:

Improve client-service orientation and enhance performance due to pooling of knowledge and resources and continuity through sale and delivery.

Better leverage junior professionals through improved mentoring, training, development, and retention.

Organizing a firm by practice does have its drawbacks. It is common to find that partners who function as practice group heads possess deep functional or industry expertise but may lack requisite management or sales skills needed to grow or expand the business. This is exacerbated by the way most firms focus on developing employees hard industry or functional skills while neglecting training in management and selling skills. Another drawback is that enter-prisewide goals can be superceded by practice priorities.

To overcome these drawbacks, firms need should ensure that the organization supports and rewards development of management skills in addition to industry or functional expertise. This requires the senior delivery team for each practice to have strong business development competency. In addition, senior delivery team members must play multiple roles along the service/function and customer matrix. Regular cross-practice meetings putting together both junior and senior staff can also help facilitate communication, idea sharing and common business development tactics.

Functional Model

Firms that use the functional model have, in essence, created separate organizations focused on (1) delivery, business development, and sales and (2) service development and marketing. Traditionally, marketing resources are aligned with delivery while business development is aligned with customers. Small firms or those specializing in supporting cross-departmental or industry-independent functions such as operations or information technology might have a tendency to be more functionally focused.

An important benefit of the functional model is that a staff specializing in sales and business development can be very efficient in identifying and quantifying new business opportunities. In addition, a single point of contact with the customer allows for maximum control of customer activity.

At the same time, a generalist sales staff has less depth of expertise in its customers business needs and, it follows, brings less specific insight to the table and is less able to provide the widest range of differentiated, custom solutions.

For firms operating under a functional model, it is important to build in a structure that encourages delivery team involvement throughout the sales and business development process, particularly in scoping. This is where the importance of transparency and knowledge sharing comes in. Unless sales and business development teams work with and share information with delivery teams, potential clients will not be able to understand the full possibilities and benefits of working with the firm. In addition, without clear channels of communication between the sales and business development team and the delivery team, it is impossible to present a united face to the client or to ensure smooth handoff of new clients to those who will deliver services.

Hybrid Practice Model

As the name indicates, hybrid practice models integrate practice and functional models to take advantage of the strengths of both types. They are divided into practices, but unlike strictly practice-based models, they include specialized business development and service development resources dedicated to each practice. Limited support functions are provided as a shared service. The hybrid model provides several benefits. With a staff dedicated to sales and business development, there is less chance of having troughs between engagements the practice models sometimes face. Because sales staff is dedicated to each practice, the staff members are more closely linked to the delivery team, therefore overcoming one of the drawbacks of the strictly functional model. With sales and business development staff linked so closely to the delivery team, the firm can gain increased credibility with customers and an increased ability to offer differentiated services. It can also offer better pricing and performance management.

This is not to say that the hybrid model is without challenges. One drawback of this model is that it comes with a higher cost structure due to staff redundancies and duplication of efforts across practices. Firms employing this model can also run into problems if their practices do not align well with customers and customer segments. The firm must, as with other models, see that the organization structure is frequently audited against the marketplace to be certain that it is of relevance to customers and is effective at developing new business and sharing knowledge internally. It is also a model that is most applicable to larger professional services firms-the matrix structure of the hybrid model may not make sense for smaller firms with a limited number of service lines, industry expertise areas and geographies.

Geographic Model

Some firms choose to use a geographic model. In this model, the firm is organized by region or country around vertical industry segments covering all

functions. This can enable better focus on local and/or regional customer needs and market requirements. In addition, it supports better business development opportunities by facilitating stronger local relationships. It also allows for greater staff cohesion and promotes the development of office cultures. Staff lifestyles are improved because travel is minimized. Finally, cutting down on travel reduces overall costs to the firm.

As with all models, this one has some very real drawbacks. With a geographic model, if a firm is not careful it can wind up with what is essentially a portfolio of companies based on geography with a silo mentality organization that does not leverage the scale, knowledge, and expertise of the enterprise. Further, a strictly geographic organization can have difficulty in adequately serving the complex needs of multinational clients or successfully competing against more integrated rivals.

Firms can mitigate this challenge by developing and implementing firmwide knowledge management and information sharing mechanisms across office and geographic boarders. It is important to clearly articulate enterprisewide core values and to develop processes, including common training and professional staff development, that apply equally to all regions and offices. It can also be very effective to overlay a practice model on top of a geographic one so that the firm looks at not only the profitability of geographic regions but also the revenues of specific practices. This creates an incentive for people to share knowledge and expertise across regions, as well as to support sales and business development efforts on a firmwide rather than strictly geographic basis.

Role of Support Staff

No matter how good professional staff is, no firm can operate without a strong support staff to assist various engagement teams and practice groups. Support staff also perform necessary corporate functions such as finance, human resources, information technology, systems, and facilities management. Although support staff are not client-facing in the precise sense of the term, they are a vital part of the process that delivers value to clients. Chapter 20 discusses the role of administrative professionals as well.

Specific roles and titles may vary from firm to firm and from industry to industry, but all firms have some form of senior support staff that perform the role of firm administrators. These staff members run the day-to-day operations of the firm, in tandem and accordance with the wishes and preferences of the partners or managers. One of their key roles is to manage the remaining support staff. They play an important role in helping manage and mitigate the perception of second-class citizen status that many support staff feel.