Innovation in professional services firms (PSFs) - investigating the development of technology and knowledge accumulation by professional service providers

The traditional business model of the PSF is the based on the esoteric knowledge held by individual professionals. Such knowledge is applied to the concerns of clients so as to give them solutions to the issues such clients face (Lowendahl, 2005). At the individual level, professionals accrue their knowledge through a relatively conventional route of higher education, followed by apprenticeship and learning on the job working alongside senior professionals. Hence professionals accrue foundational knowledge in an education setting and add further knowledge through practice, and in the latter capacity through the medium of watching, listening, reviewing and doing. Within the PSF those who prove themselves are ultimately rewarded with the status and recognition of partnership, as well as monetary rewards that go with it.

However, following re-regulation designed to open up the market, and an increasing demanding and cost driven client base, PSFs are faced with pressures to do more for less (Smets et al., 2017). To avoid simply reducing margins, and hence profit levels, PSFs have looked to the application of information technology and associated applications within the firm to deliver services more efficiently and effectively. But the scope for innovation in the PSF goes further, including offering new legal solutions to existing problems, new modes of service delivery and pricing, and the application of data as an extended form of knowledge. Within the legal field, and as an exemplar of professions and the PSF, awards are now given on an annual basis by the Financial Times to the most innovative lawyers. Categories listed include (Financial Times, 2018):
• Data, knowledge and intelligence
• Use of technology
• New products and services
• New or improved business and delivery models
• Developing talent

Notwithstanding these developments there is a dearth of research on how PSFs engage with the innovation agenda and put in place the conditions necessary for innovations to develop into practice. Research is needed into how PSFs provide the means by which the innovation agenda interfaces with the traditional means of knowledge accumulation and application of the professionals who deliver services. Are professionals being replaced by technology, or are they creating and using technology to expand the means by which their knowledge is put to work? Questions such as this are not only relevant to PSFs today, but arguably to their future survival.

Applicants interested in this research project should submit a more detailed research proposal that expands on the broad outline given above.