Law Gazette reports that firms ranked between 11th and 50th by size are losing market share to the top 10, and that revenue growth among this group is not translating into matching profit growth. The piece describes this group as the professional services sector’s "squeezed middle".
Ben Hammond, EAC Network Solutions: For firms of 20 to 150 users in accountancy, law, financial advice and similar sectors, this is worth pausing on. Revenue going up while profit stays flat usually means something is scaling badly behind the scenes, often the cost of running the business rather than the cost of winning the work. IT is frequently part of that problem without anyone noticing, because systems and support contracts are added as a firm grows rather than reviewed as a whole. Before assuming more revenue requires proportionally more spend on people, software or infrastructure, it is worth asking whether routine administrative and back-office tasks could be automated so that growth does not automatically mean growing costs at the same rate. Firms that treat their technology budget as a lever for efficiency, rather than just a bill that rises with headcount, are better placed to let revenue growth actually reach the bottom line. That distinction, between spending more because you are growing and spending smarter so growth pays for itself, is likely to matter more as competition from larger firms increases.
Source: Law Gazette
