What Is a Professional Service Firm? Toward a Theory and Taxonomy of Knowledge-Intensive Firms

Abstract

I develop a theory of the distinctive characteristics of professional service firms and their organizational implications. I identify three distinctive characteristics—knowledge intensity, low capital intensity, and a professionalized workforce—with which I propose a taxonomy of four types of knowledge-intensive firms whose varying degrees of professional service intensity generate different organizational outcomes. The analysis highlights the danger of conflating the implications of professionalization with those of knowledge intensity and calls for comparative research across a wider range of professional services.