New blueprint: Professional services firms are taking the lead in guiding clients through a new business landscape Although companies should seek advice on their business even in times of calm, a sudden crisis will undoubtedly spark a parallel spike in demand for professional services like accountants, consultancies and lawyers as companies scramble to understand the ramifications of any new landscape, in particular when prolonged market uncertainty is likely. Such was the case in the past year as the COVID-19 pandemic, almost overnight, dramatically altered the course of the business and industrial environment, globally, and across the United States, including South Jersey. The rise of the pandemic thrust the professional services into the spotlight like never before. Technology implementation and digitalization, e-commerce capacity development, business diversification, vertical integration, complementary acquisitions, financial aid applications — these were but a few of the tools available for companies to navigate their recovery. But to get the most out of any of them, businesses needed help. By way of illustration, most of the Top 40 legal firms in New Jersey saw revenue growth in 2020 despite an economy in lockdown or in limited activity throughout the year. Another example: In 2019, only 23% of family38
| Invest: South Jersey 2021 | PROFESSIONAL SERVICES
owned businesses had formal succession plans in place. COVID-19 changed that state of affairs and by the end of 2020, the proportion had increased to 34%, according to the PwC 2021 U.S. Family Business Survey. But while more family businesses were heeding the warning of the pandemic to be ready when the next downturn comes, 64% said they did not have a plan in place, suggesting that lessons from the pandemic are still being learned. Added to COVID-19, the new Biden administration’s legislative aspirations also put advisory services on call to provide support to their clients, particularly with regard to potential changes in the capital gains tax and the 1031 Exchange tax benefit. Landscape With a prime location that puts it in close proximity and with easy access to both Philadelphia and New York City, South Jersey and the state of New Jersey itself havedeveloped a strong footprint for banking, securities and commodities firms, and insurance, legal and accounting firms. Industry heavyweights Prudential and Chubb both call the Garden State home, along with another 15,435 establishments employing 222,000 financial service ( )
