Future of Professional Practice- Network Vs Cooperation Vs Collaboration

The world is changing and if one is not aware of what the future may bring and what major changes are taking place in the future. Professionals in practice can agree that the speed of change is amazing. Yesterday we were understanding the “millennials”. Today, we are understanding the “Gen Z”. Technology and automation are increasingly replacing routine jobs and even the basic information level services. If Chat GPT or Co-pilot is able to give near to our advice then one is in serious trouble.

If one knows where to search, where to get the solution, one may get much better advice for general issues/ problems at the click of the app/phone. The quality and accuracy are far higher with automation and therefore one would prefer that mode. The scale of costs would also reduce for such jobs. We need to embrace the latest in artificial intelligence to provide better output. ?

Individuals or smaller firms may find it difficult to grow unless only they are experts or providing niche services like advisory or litigation. Even in that case one needs to plan as more people, more reach, more geographies would need may aspects to be considered. The saying that one needs to put resources (capable/ trained) in place considering the future. Firms which recruit when work comes would be found short in delivery timelines as well as quality. Plans today need detailed operation plan, (how the work would be done- resources needed), technology upgradation plan, visibility plan, financial plan along with the business plan.

Why Individual Practitioners need to examine alternative arrangement?

1 Clients more than ever are looking for 1 stop solution. The need to provide a wider basket of end-to-end services resulting in value is the general trend. If the entire function itself can be outsourced, then even better.

2. Expand & grow faster: One can grow organically year on year with expansion in numbers/ locations. This also helps to serve client in Multiple Locations.

3. De-risk from compliance: Various value additive services such as Forensic / environmental/ HR audits/ IS audits/ GST health check, advisory in several areas as needed by MSMEs, representation services in adjudication/appeals can also be provided. This would reduce major part of billing which is depending repetitive or routine compliances as they are likely to be automated/ done by clients themselves.

4. Deal with falling margins: The profession has seen this for some time now for attest, compliance functions as they do not add value to the client. These services are becoming unremunerative leading to allocation of less time and resources and consequently increasing risk.

When value added services which save the client money, time or resources or headaches are offered then a professional pays the client and not vice versa. In such a case, the client would willingly pay a higher fee as well for such services. Helps to deal with falling margins.

5. Synergise specialised knowledge: Involving the collaborator firm members in upskilling/sharing knowledge, especially where joint execution done say in area of taxation & common regulation.

Possible Alternatives for Growth in Future.

1.??? Continue the small proprietary practice if the area of practice is highly personalised, needing very high expertise with a much smaller team. ?The area also should be such that changes are not that much expected. Example could be pure advisory for smaller MSME who cannot afford to go to multiple experts/ advisors. Virtual CFO services. Such a professional may still have to network with professionals in other areas of business consultancy where competencies maybe lacking

?

2.??? Merge with or take over another firm in the same area of practice or another area, in a different geographical location. This could bring in economies of scale, better branding and reach, wisdom/ knowledge share. The challenge could be the resultant sharing of earnings which may require a one time sacrifice of either of the firms done for a smaller portion of the bigger pie tomorrow.

3.??? Co-operate with other professionals/ service providers in provides broader basket of solutions or quicker delivery or services in other geographies by sharing the tasks. This could be by having a network of professionals having an agreed simple fee share understanding for mutual benefit. In India formal networks have not worked well. However, several informal networks are running quite well for decades who ensure fair dealing and think in the longer term.

4.??? Collaboration could be the next stage (or chosen option) which is a more involved, more sharing, more integrated, way of coming up with a joint solution and more considered, innovative outcome.

Consider some of the advantages of collaboration possible:

1.??? Shared workload and competencies for multidisciplinary solutions,

2.??? Diverse perspective and ides considered for better decision making,

3.??? Exposure to strengths, right attitudes and new skills of others.

4.??? Increased trust and reduced conflicts,

5.??? Increased commitment overall due to stronger team spirit,.

6.??? Improved communication with higher accountability.

7.??? Increased innovation,

8.??? Reducing costs,

9.??? Improving quality,

10. Improved motivation and energy,

Contrast this to a healthy competitive outlook which can take us individually or our team to outperform others. In the fast-changing world, even if we are competent, knowledge acquired over the years may now be available at a click of the button. The value of memory, mental computing, coding skills are slowly reducing in value.

Today unhealthy competitiveness should not even be considered due to its adverse impact on us personally and demotivation of the team. Stress, depression, sacrificing long term growth, poor relationships, burnout could be the possible consequences.

5.??? International Affiliation: Once one reaches some stage of say 100-300 employees, or 10 firms in the network, one can also look at international affiliations after careful research of cost vs benefit which also be a way to take one to the next level of professional services.??

Some Other Relevant Aspects:

Difference between collaboration and network

Networking involves making connections with other people in your field, sharing ideas and information, and building a network of professional connects that can be useful in serving client through your work.

Collaboration is about working together with others to achieve a common goal. This can be done in many ways, such as through teamwork, joint projects, or simply sharing resources and information.

Collaboration can be especially helpful when you are working on a complex project or when you need support from others to achieve your goals.

Steps in collaboration

1. Clear that we are mentally at ease to collaborate: Give & take, sharing knowledge in culture; ok with smaller share of bigger pie
2. Flexibility in name change/ omission: The collaboration may lead to such changes which should be agreed by both parties involved.
3. Identify cultural fit – list non negotiables- ethics, quality, exclusivity..
4. An initial meet with all – joint meet of partners & qualified is suggested to introduce the people involved, since their comfort would ease the collaboration into being effective to serve clients to best possible extent.
5. Fair & clear sharing in working methods- safeguarding present revenue of both.
6. Tweaking of HR policies to be similar (best practices adoption)
7. Process for high quality across both entities.
8. Start Cooperating MOU for 1st year.
9. Monitor whether agreed non-negotiables violated on 6 monthly basis the agreed non negotiables which must/ could be quality service delivery at the optimum time and reasonable cost.

Is the Collaboration leading to a win- win -win relationship?

Advantages to Client

1.?????? Client does not have to approach one more professional.

2.?????? Better quality with some accountability/ responsibility.

3.?????? More complete advice- no conflicting advice.

Advantages for Collaborator

1. Adopt best practices to make a better name in professional practice
2. To be able to serve present clients much better.
3. Able to rapidly gain professional strength and knowledge
4. Be able to leverage own and acquired expertise to offer better and more services to present and future clients.
5. To be able to serve any size of client in India (even those in multiple locations) due to quality professionals available in multiple locations.
6. To eventually be eligible to be an associate [ associates are part of the knowledge share and have a possibility to become a branch of H&A if they are interested – which is optional on both sides]
7. To empower all the staff to reach their potential as contributing professionals. (which you are already doing)
8. To be thought leaders among professionals in the Country.

Advantages for You

All advantages to collaborator as well as under.

1. To be able to provide larger number of client’s bigger basket of services of uniform high-quality services across India efficiently.
2. Build a large trusted professional network in niche/ related areas across India.
3. Making a positive difference to the profession, country and world.
4. Increasing the work automatically.

?It may be noted that even in networking some of the above advantages could be possible without a very close relationship and impact of others service level impacting one.

Sample contents of MOU

1. With larger firm – maybe non-exclusive; smaller firm- exclusive.
2. ?Avoiding conflict with clients if in same area. Example: CA firm already serving a client in GST compliance, then GST litigation can be handled by the collaborator.
3. Clarity on scope / fees sharing, billing entity. Can be clear what would be the nature of services handled in the collaboration, only consulting + litigation [excludes GST reviews] or scope covers only GST reviews for the clients of the co-collaborator. Fee sharing 25/50/75% depending on extent of time efforts involvement of the co-collaborator.

4.??? Knowledge & tools [clarity on IP to avoid disputes] (SOP/ Check List) sharing to ensure quality & NDA for client confidentiality.

I sincerely hope that this note on my learning in my growth in profession over the last 22 years (since 2002’s decision to convert into a partnership) has taught me. Professionals are free to mail me their doubts or queries at [email protected] or [email protected].