From survival to revival: the reinvention of professional firms
As they rapidly evolve to meet the challenge of COVID-19, so Australia’s accountants, lawyers and financial service experts have been there to support their clients’ survival.
The professional services sector is often overlooked when it comes to recognising those guiding Australia through the challenges of COVID-19. Yet behind the many businesses that have rapidly pivoted to respond to our new reality are teams of accountants, lawyers and financial advisers.
And none of it comes easy. Many professional advisers are still putting in extremely long days to ensure their clients are in the best position to weather the current crisis – even as they adjust their own business models to ensure they too can sustain the months of societal turmoil and recession ahead.
Advisers in business… and in life
Australia’s more than 2.2 million small and medium-sized businesses have had to adjust quickly in the current climate. A large number have taken their offering online, while many have had to rethink the goods or services they offer altogether, reinventing themselves to meet the new reality.
Not all businesses have managed the rapid reinvention though, and even the most successful pivot comes at a financial cost. This has made professional advice invaluable when it comes to navigating the Federal Government’s support loans and JobKeeper provisions and the various State Government grants and assistance.
Meanwhile, accountants and lawyers have been helping businesses understand their rights and obligations around leasing premises and other operational decisions.
“What we’re seeing, particularly with our accounting and legal services firms, [is that] they’ve truly become the adviser to most of the population,” says NAB Professional Services Banking Executive, Sara Psarrakos.
And it doesn’t stop at business advice. Psarrakos adds that people are also turning to those they see as experts in their field to help them navigate what COVID’s upheavals mean to life more broadly.
Evolving to the ‘new normal’
Throughout this, professional advisers have had to review their own situations, ensuring the necessary supports are in place to underpin their continued relevance and wellbeing in the short and long term.
For accountants, that’s largely been a matter of upping their advisory role. But it’s also meant significant operational changes – moving away from paper where possible and sidelining many other outdated manual practices.
Some law firms have had to go still further, stepping outside their traditional areas of practice to better meet clients’ new needs. For instance, while litigation and conveyancing have seen a marked decline, family law has been on the rise, encouraging firms to look for opportunities here. Similarly, some firms are preparing for a resurgence in insolvency cases in coming months.
Doing more with less
For financial advisers, the way is not so clear. “At this stage, their income has not been affected, by and large because they work on an annual fee,” Psarrakos explains. “The true impact will [only be felt once] the support loans and JobKeeper fall off.”
That hasn’t meant business as usual though. “Many [of our professional services] clients have undertaken a line-by-line review of their cost base to strip much ‘nice-to-have’ expenses out,” Psarrakos says. This includes variable costs such as bonuses and commission, as well as utility bills, office cleaning and maintenance.
Of course, these latter expenses can be cut further if you choose not to renew your commercial lease – a strategy adopted by several professional services firms that have realised staff work just as well from home.
Psarrakos considers such changes to be permanent in many instances. “I believe that when the economy does recover, a lot of things will never go ‘back to normal’.”
Safeguarding the talent
One place that doesn’t apply is staff numbers. While wages and salaries may have taken a hit across the professional services sector, firms are still going out of their way to retain their top talent – what Psarrakos describes as the sector’s biggest asset.
“The retention of good staff is something that has been front of mind, irrespective of which industry silo you’re in. Because history dictates that we will get through the [current crisis] and they don’t want to lose their best employees to a competitor on the other side of all this.”
Vital support is rewarded
Similarly, the professional services industry is shielding its customers from any efforts to shore up balance sheets. NAB has seen many of its professional services clients stretching out their debt collection times by 30 to 60 days to help businesses struggling with cashflow. “Their accountants and lawyers play such an important role in the overall health of the economy that they have been more accommodating,” Psarrakos explains.
Certainly, this role is vital to the continued viability of Australian business – something that is implicitly acknowledged by the businesses themselves. While they are taking a little more time in paying their invoices, “people are actually prioritising the payments to their accountants or lawyers, because they need to continue to rely on their advice”, Psarrakos says.
Hopefully that advice, and the professional services sector that underpins it, will continue to buoy the economy in the months to come.