Business Services Industry Trends

Professional Service Firms Often Lag Economy

On both the downside and upside, the revenue of the professional service industry lags the performance of the rest of the economy. Before the last recession, professional services grew at almost twice the pace of the rest of the economy, 7 percent versus 4 percent annually. But right after the recession, demand grew just 1 percent per year.

Employment Trends

Some segments of the professional services industry are more vulnerable than others to economic circumstances. During the last recession, jobs were down 11 percent in advertising, 14 percent in computer services, 7 percent in accounting, and 4 percent in engineering.

Professional Firms Heavy Users of Technology

Because of the close coordination required between firms and their customers and among members of a firm's own staff, professional firms have made large investments in communication and portable computer technology. Larger firms also rely on computer technology to track projects, expenses, and billings.

More Value-Oriented Billing

The basic source of revenue for professional firms remains hourly billing, but some also bill according to the value of the services they provide. Value-oriented billing is easiest to apply for services where the value is explicit, such as tax savings, damage awards, ad placements, or the size of an acquisition or merger. More value billing can be expected as professional service firms become “advisers” rather than just hourly workers.