Question

Discuss the pressures facing professional service providers. Compare the issues raised with employed professionals with those raised in private practice. For example, how independent can a lawyer in private practice be if 30 percent of his or her work comes from one client or if one client is a major source of income for partners within the firm?

Answer 1

Professional service providers face pressure in their work in the form of a dilemma that is primarily a tradeoff between taking care of the interests of the client and laws and regulations that govern the business. The dilemma is created because if proper laws and regulations are followed, then it hurt the client and business can be lost. It makes professional service provider to be under intense pressure. For example, the Arthur Anderson auditors of Enron did not deliver their due diligence and bowed to the pressure of a big client as Enron that led to the concealing of wrong doings of Enron. It led to the fall of  Arthur Anderson. The pressure faced by professional service providers can also be understood in terms of creating value for the customers and generating revenue for the business. It also brings a tradeoff and commonly observed when a financial advisor does wealth management of its HNI customers. Then the focus is sometimes given to the revenue creation for the company under the pressure of management of service providing company.

Here, the second tradeoff of revenue V/S value for client is the issue for employed professional and first tradeoff between law and due diligence and interest of the cleint is for the private practice. Employed professionals work under the pressure to meet the target that is defined by the management, but management can set ethical practices and its guidelines before professionals deal with the clients. But, in private practice, it is completely down to the service provider to set a limit while making a balance between what is legitimate, what can be done and what is the illegitimate demand of the client. Private practice professionals can adapt Deontological approach by setting a morally right intentions and or go for a utilitarian approach to take action that can benefit the majority of the society. On this basis, private practice professionals can take action to explain and convince the client to follow right ways. It is also applied to specific scenarios such as more than 30% of the businesses come from one client. If a limit is crossed, then it is not the client, but also the service provider will meet the fate as it was with the Enron and Arthur Anderson. So, it is about representing the facts, possible action and early warning to the clients to follow right, legitimate and the judicious path of action.