Abstract: For professional service firm, the quality or value by the service is affected by the professionals' rank which is decided by the skill levels of service provider. Professionals with higher rank (skill levels of service) can efficiently diagnose the customers' potential problem types and the services required treating these problems. Upon the better diagnosing by higher rank of professionals, the customers would acquire higher value of rewards from the service and the professional service firm would extract higher revenue from the service. Ignoring the service cost, it's optimal for the firm to hire highest rank of professional. However, professionals with higher rank call for higher cost of professional service, which mainly include paying higher salary to the professional. Tradeoffs such as this are most prevalent in professional service system. In this paper, the problem of balancing the incurred revenue against service cost is studied. To that end a professional services system is established where a firm as service provider hiring a professional provides service to homogenous, self-interested customers. The professional service firm's objective is to maximize the profit margin by selecting optimal rank of professional. Furthermore, the influence of income characteristics of the professional market is also considered. Results demonstrate that the optimal decision for the professional's rank is depend on the differentiation of the professional's ability and the income characteristics of the professional market.

Key words: professional services, professionals’ ranks, strategy customers, queuing