The finding
David Maister’s research on professional service firm economics identifies three variables — utilisation, leverage (the ratio of junior to senior staff) and realisation — as the core drivers of a firm’s economics, and argues they are structurally in tension with one another. Leverage cannot rise indefinitely without degrading either quality or senior utilisation, because expert judgement, unlike routine execution, does not delegate cleanly. A junior associate can be given more files; a junior associate cannot be given more judgement.
This is directly relevant to Swiss professional services firms — legal, accounting, consulting, private banking-adjacent advisory — expanding from a single office into a second location, whether within Zurich’s canton, into another Swiss canton, or into a neighbouring market. The expansion decision is often framed around demand: is there enough client work to justify a second office? Maister’s finding suggests the more binding question is different: is there enough senior capacity to justify it, given that leverage is already structurally constrained before the second office opens.
Why it happens
Laura Empson’s research on power and governance in partner-led professional service firms adds the governance dimension. In firms where decision-making authority sits with senior practitioners rather than a separate management layer, there is a structural reluctance to make investments — including the investment of sending a senior partner to establish and run a second office — whose short-term cost falls disproportionately on the decision-makers themselves. A partner asked to relocate, split their time, or hand off existing client relationships to build a new office is being asked to absorb a personal cost for a firm-level benefit, in a governance structure where that partner also has a vote on whether the expansion happens at all.
Ronald Coase’s argument about the rising cost of internal coordination with dispersion completes the picture. A second office is not simply “more of the same” business conducted in a different postcode. It is a dispersion event: client relationships, quality standards, pricing conventions and informal knowledge that travelled easily inside one office now have to travel between two, deliberately, because they no longer travel by default. For a professional services firm — where the product is, in large part, judgement — that is a genuine coordination cost, not an administrative one.
These three findings interact in a way that is worth being explicit about, because each on its own understates the difficulty. Maister’s leverage constraint means a second office cannot simply replicate the first office’s staffing ratio without either importing senior capacity from the first office (straining it) or promoting junior staff faster than their judgement has matured (degrading quality). Empson’s governance finding means the senior person best positioned to solve that problem — an experienced partner willing to anchor the new office — is also the person with the least personal incentive to volunteer, under a governance structure where they retain a vote on whether the expansion happens. Coase’s dispersion argument means that even once a senior figure is in place, the informal knowledge transfer that used to happen through daily proximity in a single office has to be deliberately rebuilt across two locations, which is slower and less complete than firms typically expect going in.
What it looks like in practice
The pattern that emerges from these three findings together is that successful multi-office growth in Swiss professional services tends to be senior-capacity-led rather than demand-led. Firms that expand because a specific, credible senior figure is available and willing to anchor the new office report a different growth trajectory than firms that expand primarily because client demand in a new location looks strong. The latter pattern more often produces a second office that struggles with exactly the leverage tension Maister describes: junior staff without enough senior oversight nearby, and senior partners split thin enough that neither office gets the judgement-intensive attention the work requires.
Multi-office growth in a country with strong cantonal identity and, in some cases, a different working language across offices, compounds the coordination cost further. A Zurich-based firm opening in Geneva is not simply opening a second location; it is often operating in a different working language and a distinct professional and regulatory culture, which raises the coordination cost Coase’s argument predicts, on top of the leverage and governance tensions Maister and Empson describe.
A common misreading of slow or cautious multi-office expansion in Swiss professional services is that it reflects conservatism or a lack of ambition. The research suggests a more specific explanation: the constraint is real, structural, and located in senior capacity and partner-governance dynamics rather than in appetite for growth.
The consequences of proceeding without resolving these constraints tend to surface unevenly across the two offices rather than uniformly. The original office often experiences a subtle but real decline in senior availability, as the firm’s most experienced people split their attention, even where nobody has formally reduced the original office’s staffing. The new office, meanwhile, frequently experiences the leverage tension most acutely in its first eighteen to twenty-four months, before it has built enough of its own client base and precedent to reduce its dependence on knowledge travelling from the original location. Firms that treat the expansion as complete once the second office has opened, rather than as an ongoing coordination investment over this window, are the ones most likely to see the quality and governance strain Maister’s and Empson’s research would predict.
Where this shows up
Written for organisations in Zurich. See the Zurich market page for related reading, or browse the other hubs on the Markets page.
Related advisory: asset management consulting.
Questions worth considering
- Is the case for a second office built on client demand, senior capacity, or both — and has the difference been made explicit?
- Where does partner governance create a structural reluctance to make an investment whose near-term cost falls on the decision-makers themselves?
- What is actually travelling between offices by default today, and what will need to travel deliberately once there are two?
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