Are Professional Service Fees Heading for Collapse?

Dave Pollard looks into the future in his thought provoking post about the Wal-Mart Dilemma, File Sharing and Lousy Service.  He has some sobering things to say about professional services providers:

Providing good service is expensive, and large corporations are trying everything they can to force customers to a 'self-service' (i.e. no service) model. Those in industries where they can't just tell the consumer "Throw it out and buy a new one" are in especially deep trouble. Examples: the news media, professional services (legal, medical, financial etc.) are all under fire for their skyrocketing prices for less and less service time and value.

Dave predicts:

The price 'bubble' for services will collapse, just as it has for products and just as it will for stocks and real estate. This will also be bloody. Public corporations in service industries will be crucified by shareholders as those incumbent service providers who break ranks drive service industry ROIs down to more reasonable levels. Large-firm 'professionals' who would faint at the unheard-of idea of salary cuts will see cuts in double-digits, which, on top of the incredible hours they already work, will probably lead to massive strikes by people you would never expect to see striking. Companies which make shoddy products and which try to shove off all service to outsourcers or offshorers, like the big computer hardware and software makers, construction companies and lawn tractor makers (according to Consumers' Union, these industries' products have the highest failure, repair and complaint rates, and none provides quality service) will face a consumer revolt, and demands for government regulation to improve or offer free replacement for defective products and work -- which these industries will fiercely lobby against.

To call Dave’s viewpoint a bit left of center is an understatement. Nevertheless, Dave makes some compelling arguments.  Take a look at the full post, if only for Dave’s explanation of the ‘Wal-Mart Dilemma’ — one of the best I’ve read.