Working hard to involve non-partners in firm affairs and winning their commitment to the firm’s success is a hallmark of the one-firm firm and is reinforced by a widely common practice of sharing firm profits more deeply within the organization than is common at other firms. (The ratio between the highest paid and the lowest … Read more
Turnover at one-firm firms is clearly more carefully managed than it is among competitors. Those one-firm firms that do enforce an up-or-out system (McKinsey and Andersen) work actively to place their alumni in good positions, preferably with favored clients. McKinsey’s regular alumni reunions, a vivid demonstration of its success in breeding loyalty to the firm, … Read more
The characteristics of the one-firm firm system are institutional loyalty and group effort. In contrast to many of their (often successful) competitors who emphasize individual entrepreneurialism, autonomous profit centers, internal competition, and/or highly decentralized, independent activities, one-firm firms place great emphasis on firm-wide coordination of decision making, group identity, cooperative teamwork, and institutional commitment. Hewitt … Read more
The aristocratic model is applicable where strong leadership is crucial to the success of the organization and where the requisite skills for leadership can be readily defined and identified. However, it runs into problems when the standards of skill, wisdom, and virtue are unclear. Who, after all, is to judge the judges, and on what … Read more
This is an overreaction. In the professions, superior performance is evident only over an extended period of time, and should be so appraised. A given year’s compensation decision should be seen as one of a series, not as a game to be won or lost each year, with no view to past or future. Rapid … Read more
There are two ways to justify a seniority-based system: First, the senior partners’ past efforts have contributed to the firm’s current profitability, and second, their greater experience makes them more valuable to the firm now. Both are testable propositions, however, and should not be assumed to be true. Some partners’ past contributions may long ago … Read more
Partner Self-Evaluation 1. PROFITABILITY Please comment on your contribution to firm profitability through wise engagement management control of billings, accounts receivable, work-in-process, and other financial matters. 2. QUALITY OF CLIENT RELATIONS AND SERVICE What special accomplishments have you achieved is providing outstanding service to clients, either through technical achievement or relationship management 3. COACHING AND … Read more
The process should begin with the firm sending to each palmer the quantitative information it keeps on partner performance (preferably including financial and nonfinancial scorecards, as described above) with a note saying Please prepare a self-evaluation of your accomplishments this year. As you prepare your review, please examine the enclosed quantitative formation on your activities. … Read more
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 … Read more
Usually, the team will be sent away from the first such meeting to revise its thinking, and return for a second presentation. In most cases, this process will result in a clear plan of action and a request for some form of investment. When the management has listened to (and challenged) the plans of each … Read more
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