Professional services are occupations in the tertiary sector of the economy requiring special training in the arts or sciences. Some professional services require holding professional licenses such as architects, auditors, engineers, doctors and lawyers. Other professional services involve providing specialist business support to businesses of all sizes and in all sectors; this can include tax advice, supporting a company with accounting, IT services or providing management advice.
Many industry groupings have been used for academic research when looking at professional services firms, making a clear definition hard to attain. Some work has been directed at better defining professional service firms (PSF). In particular, Von Nordenflycht generated a taxonomy of professional service firms, defining four types:
- Classic PSFs (e.g. law and accounting firms) - characterised by a high knowledge intensity, a professionalised workforce, and low capital intensity
- Professional campuses (e.g. hospitals) - characterised by a high knowledge intensity, a professionalised workforce, and high capital intensity
- Neo-PSFs (e.g. management consultants) - characterised by a high knowledge intensity and a low capital intensity
- Technology developers (e.g. R&D firms, biotechs) - characterised by a high knowledge intensity and a high capital intensity
Frameworks such as this aid the ability of managers and academics to better understand how such firms manage themselves and how to judge benchmark practices.
There is no definitive list of occupations in professional services, but commonly held examples include the following:
Professional services can be provided by sole proprietors, partnerships or corporations. A person providing the service can often be described as a consultant. In law, barristers normally organise themselves into chambers. Businesses in other industries, such as banks and retailers, can employ individuals or teams to offer professional services for their customers.
The marketing and selection of professional-service providers may depend on factors such as skill, knowledge, experience, reputation, capacity, ethics, and creativity. Large corporations may have a formal procurement process for engaging professional services. Prices for services, even within the same field, may vary greatly. Professional-service providers may offer fixed rates for specific work, charge in relation to the number or seniority of people engaged, or charge in relation to the success or profit generated by the project.
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- Von Nordenflycht, A, "What is a professional service firm? Toward a theory and taxonomy of knowledge-intensive firms", Academy of Management Review, Vol. 35, No. 1. (2010), pp. 155-174
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- Indicators of regulatory conditions in the professional services Organisation for Economic Co-operation and Development
- Better Regulation of Professional Services European Union
- Key Facts about UK Financial and Related Professional Services The City UK
- Professional Service Firms University of Cambridge