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The Firm of the Future: A Guide for Accountants, Lawyers, and Other Professional Services

ISBN: 978-0-471-26424-8
360 pages
April 2003
The Firm of the Future: A Guide for Accountants, Lawyers, and Other Professional Services (0471264245) cover image


Provides accountants in small and medium sized firms the tool to expand services beyond attest and compliance functions.
  • Shows how to transition to other professional services that clients value.
  • Provides a pro-forma business plan for mapping a three to five year plan for the transition to a successful practice.
  • Positions consulting as an extension to traditional services, not just an alternative.
  • Includes many real world examples of accountants who have made a successful transition to new services, discussing the challenges and the results achieved.
  • Focuses on quality of life issues and how to get there.
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Table of Contents




About the Authors.

How to Read This Book.

1 Introduction.

2 A Flawed Theory.

“Analyzing” the Predominant Practice Equation.

Summary and Conclusions.

3 A Paradigm Worthy of a Proud Profession.

Why Are Professionals Successful?

Cognitive Dissonance.

Why Are We in Business?

Study Success: It Leaves Clues.

What Business Are You In?

Where Do Profits Come From?

Summary and Conclusions.

4 Intellectual Capital: The Chief Source of Wealth.

The Physical Fallacy.

The Scarcest Resource of All.

The Three Types of IC.

Is All This Stuff Good?

Summary and Conclusions.

5 Human Capital: Your People Are Not Assets, They Are Volunteers.

Becoming a Lightning Rod for Talent.

Retaining Your Firm’s Human Capital.

The Importance of Continuing Professional Education.

Rewarding Your Firm’s Human Capital Investors.

When Human Capital Turns Negative.

Summary and Conclusions.

6 Structural Capital: If Only We Knew What We Know.

Leveraging IC and Creating the World’s Second Largest Currency.

Converting Tacit to Explicit Knowledge.

Knowledge Lessons from the U.S. Army.

Summary and Conclusions.

7 Social Capital: Man Is Not an Island.

Is There an Accounting for Tastes?

Leveraging the Social Capital in the Firm of the Future.

Reputation, Brands, Referral Sources, and Networks.

Suppliers and Vendors.

Shareholders and Other External Stakeholders.

Joint Venture Partners and Alliances.

Professional Associations and Formal Affiliations.

Firm Alumni.

Consider Creating a University.

Putting It All Together: The Concierge Service Model.

Summary and Conclusions.

8 You Are Your Customer List.

What Do Customers Really Buy?

The Value Proposition.

Moments of Truth.

What Is Beyond Total Quality Service?

Is Being a Trusted Advisor Enough?

From Zero Defects to Zero Defections.

Why Do We Lose Customers?

Customer Complaints.

The 100-Percent Money-Back Guarantee.

Bad Customers Drive Out Good Customers.

Adaptive Capacity.

Firing Customers.

The Forced Churn.

Thoughts on Requests for Proposals (RFPs).

Summary and Conclusions.

9 You Are What You Charge.

A Tale of Two Theories.

A Better Theory of Value.

Cost-Plus Pricing: Epitaph.

Deleterious Effects of Cost-Plus Pricing.

Lessons in the Subjective Theory of Value.

Professionals Subject to the Laws of Economics.

The Four Ps of Marketing.

Are Professionals Commodities?

The Five Cs of Value.

Fixed-Price Agreements and Change Orders.

Fixed-Price Agreements.

Explaining the FPA.

Change Orders.

Negotiating Skills.

The TIP Clause.

The Wrong Mistakes.

Value Pricing and Self-Esteem.

Value Pricing and Ethics.

American Bar Association’s Commission on Billable Hours Report.

Summary and Conclusions.

10 Measure What Counts: Effectiveness over Efficiency.

The Gospel of Efficiency.

Frederick Taylor Enters the Professions.

Economists Posit Theories.

Accounting Is Not a Theory.

It’s 12:41 A.M.: Do You Know Where Your Package—and CPA—Are?

KPIs for the Firm of the Future.

Selecting the Right KPIs for Your Firm.

KPI Summary.

Refuting the Efficiency Defense for Timesheets.

Refuting the Cost Accounting Defense for Timesheets.

Is There One Best Economic Denominator to Track?

Summary and Conclusions.

11 The Timeless Practice.

Paradigm Drives Vision.

Vision Drives Leadership.

Leadership Drives Internal Quality.

Internal Quality Drives Team Happiness.

Recasting the Roles.

Would You Want Your Son or Daughter to Work There?

Core Ideology = Core Values + Purpose.


What about Strategic Planning?

Summary and Conclusions.

12 Some Words on the Future.

Is the Audit an Edsel?

Financial Model Reform.

Substituting Government Failure for Market Failure.

Multidisciplinary Practices.

Summary and Conclusions.

13 Epilogue.

What Is Calling You?

Continuously Develop Your Intellectual Capital.


Leaving a Legacy.



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Author Information

PAUL DUNN continues to be at the forefront of management and marketing on a global basis. He formed The Results Corporation, a marketing organization, and from there Results Accountants’ Systems (RAS) which focused on accountants in public practice, and founded the "Accountants’ Boot Camp" Process. He is in high demand for his marketing and speaking skills, working with major corporations worldwide.

RON BAKER, CPA, is the founder of VeraSage Institute, a think tank dedicated to teaching Value Pricing to professionals around the world. He is a frequent speaker and a consultant to professional service firms on implementing Total Quality Service and Value Pricing. He is also author of the bestselling marketing book written specifically for the professions, The Professional’s Guide to Value Pricing, Fourth Edition.

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For the Back Cover:
"In The Firm of the Future, Ron Baker and Paul Dunn create an intellectual challenge for firm leaders. They are truly two of the best critical thinkers today. Together they provide the reader with a wealth of thought-provoking ideas. This is an intellectual masterpiece."
—August J. Aquila, Ph.D.
Managing Director, American Express Tax and Business Services and Co-Author of CPAs That Sell and CPA Firm Mergers That Work

"When I first received my copy of The Firm of the Future I was intimidated by its size and began reviewing the table of contents for the sections that seemed most interesting to me. But, as I am prone to do, I began at the first page. I soon found myself pouring through the book, chapter by chapter. Paul Dunn and Ron Baker have compiled a work that has incredible depth, wisdom, and insight. What I enjoyed most, however, was the conversational tone that makes this book hard to put down. I feel like I have had a personal conversation with wise counselors who understand my business."
—Michael C. Knowles, Partner, Frank, Rimerman + Co., LLP, Menlo Park, California

For the Front Matter of the Book:
Praise for The Firm of the Future
"This is an absolutely must read for any business (and that includes accounting practices) who want to be in business in the future - written in a highly readable style and laced with hundreds of practical 'how to' notes and comments this book is a prerequisite business manual for any practitioner of any professional service organization. This really is a stunning book - I've thoroughly enjoyed the philosophy as well as the practical how to and why and will further refine our approach to the business - loved the style and class of the book."
—Peter Byers, Chartered Accountant, New Zealand

"Excited is probably the most appropriate word for how I felt as I read the book. Excited at the learnings, excited at the possibilities that opened before me, excited at what it would be like to work in a practice with no timesheets, value pricing, passionate team members and clients more than delighted with the "concierge service" provided by every team member. Ron Baker and Paul Dunn have clearly described what the firm of the future MUST look like. They clearly debunk all the old theories and practices of managing and operating an accounting firm and clearly explains the methods and FEELINGS that must exist in The Firm of the Future."
—Harry Rosenburg, BKR Rosenberg+Partners, Melbourne, Australia

"For many years now, I have utilized and professed within my firm, my working theory, 'Our next new client has to have a thirst for our knowledge and the willingness and ability to pay for it.' The Firm of the Future embraces this theory and provides readers with the sound fundamentals to capitalize on their intellectual, social, and human capital."
—Robert A. Gaida, Vice Chairman, BDO Seidman, LLP

"Without doubt the single most important book ever written for professionals. It will force the entire profession to question, rethink, and rework everything it does. It's a book that will change your practice and your life—for the better, forever. Thanks to this book the professions will never be the same again."
—Steve Pipe, Founder and Chairman, The Added Value Network (U.K.)

"I have no doubt that the revelations that Paul and Ron draw run a parallel. Sometimes the answer is obvious, but only to those not already under water that if they stood on their toes they could lift their heads above water, and it needs someone from outside the pool to see it. You have done this, you have the answer, and like all brilliant business findings it is simple, it is available to all, and it is practical. It requires only a willingness to accept, to change and to grow - a willingness that some have and some will never have, as like troglodytes they cannot accept change."
—Dr Chris White, Doctor of Business Administration, PhD, MBA, B.Bus, ALGA, CA, FCPA, CFP JP, Partner KPMG, Cairns

"For many years Ron Baker and Paul Dunn have been wonderful drivers for change in how professional service firms can become more successful. As a result of their collective wisdom, they have now co-authored a powerful and insightful book that should require many firms to reconsider their strategy. The true benefit of adhering to their New Practice Equation will not only be a more profitable firm but one that will also have a distinct competitive advantage in the marketplace. An absolute required reading for business leaders and managers of professional firms."
—Robert J. Gallagher, CPA, President - R. J. Gallagher and Associates, Inc.

"Like everything that challenges conventional thinking, this book takes time to absorb. There were many parts that I just had to 'read-over' so that I could filter through the brilliant combination of evidentiary and emotional interplay that Paul and Ron do so well and reveal the truth for myself. The book reads like the early conversations I was privileged to be privy to, and will be touted through the ages as a seminal work on the new evolution of the profession."
—Jason Johnson, CEO, Kipara Consulting

"The Firm of the Future imparts the accumulated wisdom of two key people who are helping to shape the profession, in a readable, and memorable manner. And wisdom a plenty Paul and Ron have to impart. The profession has a vital role to play if our capitalist system is to continue its enormous record of success, and to prove to the doubters that is universally the best system man has invented for improving the well being of all people on earth, not just those in the wealthy developed nations. Paul and Ron chart the course by which the profession can regain its significance and, more importantly, help achieve the bigger goals, both for the benefit of its own members and the wider world. I heartily recommend The Firm of the Future as a 'must have' guide for anyone in practice."
—David Hartley, Director, ElanElan Ltd.

"Between the covers of this book are more good ideas than you typically find in a dozen business books. Take notes: you'll want to remember these ideas for a long time."
—David Maister, author and consultant

"Paul and Ron have brought together their business philosophies under one cover of a book that should be the practice manual in every professional office. It truly is the answer of having the business do the things the professional used to do in a more effective and profitable manner. Who wouldn't want to work in the firm of the future described here?"
—Nicholas Newton CA, CMA, Creative Director, Frouin Group

"Ron Baker and Paul Dunn have put together the modern almanac of best business practices. Their firm of the future focuses on its intellectual, networking, cultural, and customer-focused capital to build wealth. They demonstrate over and over how making meaning, not just money, is the key to a leader's success. The book is an excellent read for those who want to learn the best-of-the-best business practices proven in the past decade."
—Sheila Kessler, Ph.D., President of Competitive Edge and author, Measuring and Managing Customer Satisfaction

"The Firm of the Future brings a huge number of great ideas together in one place to provide a road map of what a professional service firm must do to position itself for the future. The book provides key success factors any firm can follow in creating a customer-driven firm."
—William Cobb, Cobb Consulting, Houston, Texas

"Finally! A book that catapults professional firms to a more sophisticated, more effective approach to management, leadership, and providing value. Any firm that follows the theory and practical advice advocated by Ron and Paul can retain happy and qualified team members, assure growing and loyal clients, reduce the stress of public practice, and reap the benefits of significant profitability."
—Martha Sawyer, president of Hudson Sawyer, publisher of Bowman's Accounting Report

"It's refreshing to see a book that focuses the accounting practice on who we truly are - and more importantly, who we should be. We didn't learn this trade to have our services discounted and be held to a minute-by-minute gauge of value. Ron and Paul keep your focus on the ball rather than the scoreboard and clearly define our role as 'Intellectual Capitalists,' not bean counters!"
—Mark J. Koziel, CPA, Director, Dopkins & Company, LLP

"Ron Baker and Paul Dunn have done it again. Living up to their reputation for challenging conventional wisdom, Baker and Dunn present a new paradigm for the professions to understand the dynamic forces at play in the professional practice of the 21st century. The Firm of the Future is a brilliant work that adds a new dimension to the old formula for success in a professional service firm. Baker and Dunn clearly lay out a new road map to help leaders understand the differences between leveraging people and leveraging knowledge; between billing for time and pricing for value; and between doing things right and doing the right things. This new paradigm for the firm of the future will help professionals more accurately plan and structure their firm in a way that acknowledges and capitalizes on today's marketplace, technological opportunities, customer expectations and human capital needs. Any practice leader who wants to ensure success for their organization should be compelled to read The Firm of the Future."
—Michael Platt, President & CEO, AccountingWEB

"Sometimes, this book takes your breath away with its ambition. Not content with burying a fundamental paradigm of the professions, it offers a new one that challenges all who think about, and care about, their profession to re-evaluate what they do—and why they do it. Brimming with ideas, Baker and Dunn constantly challenge accepted wisdom, but thankfully provide cogent alternatives for your choice. Quotes, illustrations and examples from all sorts of sources drive home points to ensure the book is a fantastic read and will have profound effects on your business—and the rest of your life. The future of the firm you inhabit will undoubtedly be shaped by The Firm of the Future. Ambition fulfilled."
— Paul O'Byrne, Partner, O'Byrne and Kennedy, Chartered Accountants, United Kingdom

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