“As the financial crisis on Wall Street unfolds with intense media coverage, we are losing sight of another crisis: more than a million families across the United States will face foreclosure in the next six months as the last of the subprime mortgages contracted in 2006 and early 2007 reset. Accelerating job losses and low wages aggravate the lives of tens of millions of families. In the rush to focus on Wall Street, these are the families whose lives must not be forgotten.”

The above is from the September 29, 2008 Center for Study of Working Class Life report, “Economic Stimulus and Economically Distressed Workers” (www.stonybrook.edu/workingclass/resources/distress_full.pdf) by Michael Zweig, Junyi Zhu, and Daniel Wolman.

During this severe and continuing economic crisis, I wonder how many accounting firms are basically practicing business as usual, and if so, why?

We get hundred of pieces of correspondences from firms every week and come in contact with others via e-mail, conversation, observation, and third-party interaction. Although there are a number of firms doing an admirable job, I am surprised that so few firms seriously acknowledge the continuing economic crisis. Many are still sending out canned firm newsletters that seem to be talking as if these were boom economic times.

What is the leadership of these firms focusing on and what message does that send to staff and clients? Maybe these firm leaders are developing battle plans, hoping the economic crisis won’t be as bad as predicted, believe that if they focus on keeping their firms profitable the crisis won’t severely impact the firm and its clients, that a new President will help, or maybe they are simply in denial.

They are making a terrible mistake and also fail to recognize a new business model is emerging. We write about this new model in the November issue of Practical Accountant.

Let me suggest to those accounting firms who aren’t yet proactive: consider the advice from a report, “The Economic Crisis - Threat or Opportunity for Professional Services Firms?” from Muzeview, an independent competitive intelligence and research company focusing on the professional services industry (www.muzeview.com). 

It is a nine-step process designed to help professional services firms minimize the downside, and capitalize on opportunities to help clients during this economic crisis. It is based on marketing communications and thought-leadership outputs of 120 leading law, accounting, and consulting firms from September 1 to October 10, 2008.

The Nine-Step Process:
1. Talk to Your Clients, Understand Their Needs
2. Gather Market and Competitive Intelligence
3. Mine Your Firm’s Collective Insights and Expertise
4. Evaluate and Focus Your Client, Practice Area and Talent Portfolios
5. Share Market Knowledge with Clients
6. Communicate and Share Firm Insights and Expertise with Current and Potential Clients
7. Develop Future Scenarios
8. Invest for the Future
9. Remain Alert and Nimble to Respond to New Threats and Opportunities
 

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