One of the unfortunate quirks of professional firm accounting is that most of the critical strategic activities (such as training, allowing selected individuals reduced chargeability in order to develop new specialties, developing new project methodologies to achieve efficiencies, engaging in new service development) do not show up as “investments” in the firm’s accounts. Rather, they show up as reduced billability, that is, lower net income. As the saying goes, “One person’s investment is another person’s loss.” Accordingly, individual partners, subject to the ongoing financial control systems of the firm, tend to postpone or avoid investment activities for fear of being judged as missing their income targets.

Excerpted from ‘Managing the Professional Service Firm’ by David Maister, page 234