In tackling the issue of staffing efficiency on engagements, no activity in the office surpasses in importance good management of the scheduling process. Once it has been decided how an engagement is to be staffed (who is assigned, and what portion of the engagement each is scheduled to do), the engagement’s leverage structure is in … Read more

While there clearly are a variety of personal factors at work (“I prefer to do it myself” or “I have more confidence it will be done correctly if I do it”), I have learned that a bigger explanation is provided by the measurement and reward systems of most firms (hence the name systemic under-delegation). First, … Read more

Imagine that a questionnaire was sent to each and every professional in your firm, top-to-bottom, asking the following single question: What percentage of your professional work time is spent doing things that a more junior person could do, if we got organized and trained the junior to handle it with quality? (Obviously, do not include … Read more

Productivity = Fees / Staff = Fees / hour * Hours / Staff = Value * Utilisation Excerpted from ‘Managing the Professional Service Firm’ by David Maister, page 33

Now consider a firm whose practice-mix was made up predominantly of clients who, rather than needing the profession’s most creative talent, wanted to find a firm that had accumulated experience in handling certain types of problems, and would not take an expensive “start with a blank sheet of paper” approach to the problem. The marketing … Read more

Imagine a professional practice group (or firm) that focuses its attention on serving the needs of clients with frontier problems. How would you run such a practice? True to the professions traditional self-image of being elite practitioners, the staffing requirements of this “expertise-based” practice would be such that the firm would need to seek out … Read more

In any professional service there are three key benefits that clients seek: expertise, experience, and efficiency. However, even within the same practice area, the relative priority that a given client places on these elements can vary dramatically. A client with a large, complex, high-risk, and unusual problem will appropriately seek out the most creative, talented, … Read more

There is no necessary relation between growth and profits. Why is this so? If a firm grows subject to two conditions whereby: (a) the mix of client projects (and hence fee levels) remains the same; and (b) the project staffing (or leverage) is such that the same proportion of senior or partner time is required … Read more

In most professions, one or more firms can be identified that have clearly chosen a high target rate of turnover. Partners (or shareholders) can routinely earn a surplus value from the juniors without having to “repay” them in the form of promotion. This high turnover rate also allows a significant degree of screening so that … Read more

A professional service firm’s leverage is also central to its economics. The “rewards of partnership” (the high levels of compensation attained by senior partners) come only in part from the high hourly (or daily) rates that the top professionals can charge for their own time. Profits also come, in large part, from the firm’s ability, … Read more