Professional services companies provide high-skill services to customers (who are typically referred to as “clients”) for a fee. There are many types of professional services companies with areas of expertise ranging from accounting to legal to marketing. Professional services firms in the United States generate an estimated $2 trillion in revenue annually and account for roughly 10 million jobs.

A defining characteristic of professional services firms is customization - the work they deliver is often tailor-made for each client. Firms hire and train skilled workers who then leverage their expertise to provide these customized services and deliverables. It is this ability to deliver high-quality, individualized services that creates, and sustains, tremendous economic opportunity for professional services firms.

Clients typically engage a professional services company because they lack the expertise or capacity to deliver a service internally within a desired timeframe. When a company hires a law firm, for example, it’s usually because the company doesn’t have in-house counsel. It would be too risky for company leaders to draft their own legal contracts, so they eliminate that risk by hiring a capable law firm.

In other cases, a company may have the expertise within its ranks to handle a project internally, but lack the available personnel to complete the work within the needed timeframe. Many large companies have an army of marketers and software developers, but still leverage outside professional services firms in these same categories to complete key projects sooner.

In a nutshell, companies hire professional services firms to attain high-quality, customized services and deliverables, with low risk and in a reasonable period of time. To achieve these goals, companies are willing to pay a premium. As you engage with your current and prospective clients, it is important to keep their core needs in mind. Remember: high quality, low risk, quick turnaround.

The Difference Between Consulting and Professional Services

The terms “Professional Services” and “Consulting” are often used interchangeably, but they are not the same thing. Consulting is a type of professional service. Professional services is the macro category that includes a wide range of services industries, including various types of consulting.

Consulting services usually involve an advisory component. Consulting firms provide clients with strategic guidance in an area where the firm has deep domain expertise. Management consultancies, for example, often provide strategic counsel to the client’s leadership team in an effort to improve the client’s business performance.

Many types of professional services do not include this advisory component. For example, a software product company may have a services division that installs the company’s product. Those personnel aren’t providing consultation to their customers; they are engaging in tactical implementation activity. So, while all consulting firms can be considered professional services companies, the reverse is not true.

This raises the question – why are these terms used interchangeably when consulting is actually a type of professional service? There are a couple of reasons. First, many professional services companies include some amount of consultation as a part of the service delivery. Second, “consulting” is a shorter term than “professional services” (three syllables instead of seven) and brevity usually wins.