Professional services firms facing 'polycrisis of confidence'

"A major study of C-suite attitudes among professional services firms has revealed a complicated landscape of increasing AI use, growth fears, worries about cash flow and concerns over staff motivation. According to the Managing Partners Forum Winter 2025 Quarterly, shared exclusively with City AM, all firms surveyed have integrated Gen AI into their daily operations, but only 68 per cent believe investing in AI will help the firm grow market share, down from 96 per cent in July."

"The report, which is provided to the UK government, mainly focuses on chief executive officers and C-suite members at mid-sized law firms (44 per cent), accountancy (12 per cent) and consultancy firms (10 per cent). For the senior leaders of these firms, the most important issue is finance and cash flow (64 per cent) and marketing and new business generation (56 per cent)."

"The report, which is being issued to the government on Wednesday, revealed a "polycrisis" of confidence among mid-sized firm leaders, defined by a heavy tax burden and a perceived lack of strategy for the sector. Leaders warned that recent dividend and business tax hikes are "reducing the incentive to grow," forcing some small business owners to quit entirely. The senior executives also shared concerns that employees are "increasingly demotivated by the sheer scale of tax taken from their pay" adding that "this needs reduc"

All firms surveyed have integrated Gen AI into daily operations, yet only 68% believe AI investment will grow market share, down from 96% in July. C-suite respondents are concentrated in mid-sized law firms (44%), accountancy (12%) and consultancy (10%). Top priorities are finance and cash flow (64%) and marketing/new business generation (56%), while importance placed on people and employer role fell from 56% to 41%. Employee turnover concern slid to 14% from 23%, far lower than over 70% in 2022. Mid-size companies expect 89% expansion versus 7% contraction. Leaders cite heavy tax burdens, a perceived lack of sector strategy, tax hikes reducing growth incentives, and rising employee demotivation over tax take.

Read at City AM