by domenick j. esposito<\/i>
\n8 steps to great<\/i><\/a><\/p>\n
is rightsizing partners and managers that difficult? the simple answer is no!<\/p>\n
more on strategic planning: <\/b>10 roles of an executive committee<\/a> | how partners fail<\/a> | is it time to manage your receivables like a real business?<\/a> | mine vs. yours vs. ours<\/a> | 22 things leaders must do<\/a> | 21 questions to help unlock accelerated growth<\/a> | m&a candidates: valuations and vetting<\/a>
\nexclusively for pro members. <\/span><\/strong>log in here<\/a> or 2022世界杯足球排名 today<\/a>.<\/span><\/p><\/blockquote>\n
\u201csuccess is nothing more than a few simple disciplines, practiced every day.\u201d<\/p>\n
\u2013 jim rohn<\/p><\/blockquote>\n
firms doing at least $20 million in annual revenues are hitting these benchmarks today:<\/p>\n
\n
- fees per equity partner: $2,100,000<\/li>\n
- earnings per equity partner: $635,000<\/li>\n
- staff to equity partner ratio: 8<\/li>\n
- average equity partner billable hours: 1,100<\/li>\n
- average manager billable hours: 1,600<\/li>\n<\/ul>\n
the numbers are different for smaller firms. for firms doing under $10 million, annual fees per equity partner are about $1,300,000, earnings per equity partner are just under $400,000, staff to equity ratios are about 5, and average equity partner and manager billable hours are 1,200 and 1,800, respectively.<\/p>\n
<\/a>so, if your firm isn\u2019t consistently hitting the numbers in your appropriate \u201cbracket,\u201d does that mean you aren\u2019t rightsized?<\/p>\n
\n
- generational issues, including the baby boomer bubble (many partners between 55 and 65 years of age), xers and millennials (who don\u2019t aspire to partnership and prefer multiple employment moves throughout their careers).<\/li>\n
- a lack of sufficient talent and consistent, effective recruiting and staff development processes. many firms don\u2019t have a process to see quality recruits and generally let senior journeymen (professionals who are doing an adequate, but not an exceptional job, and have little, if any, prospects for advancement) stay on the payroll too long.<\/li>\n
- promoting non-partner-track people or marginal staff to higher positions because \u201cwe\u2019re preserving staff continuity\u201d and \u201cit\u2019s best for the client.\u201d this typically occurs because it is the path of least resistance or if the firm lacks aggressive up-and-comers.<\/li>\n
- performance management and compensation plans for partners and managers that focus too heavily on chargeable time and billing runs. partners gravitate to manager work and managers gravitate to senior work.<\/li>\n
- \u201cit\u2019s just easier to do it myself and besides i\u2019m a lot more efficient at it.\u201d how many times have we heard these words from partners and managers?<\/li>\n<\/ul>\n
ouch! so, what do you do if you have an upside down partner\/staff pyramid?<\/p>\n
first of all, you need some time to work out of this terrible spiral. you didn\u2019t get there overnight, and you won\u2019t fix it overnight, either. my advice is to begin the \u201cfix\u201d by prioritizing and dealing with the following issues:<\/p>\n
\n
- if you don\u2019t have a staff recruiting and development plan for your firm, create one. it should include the commitment to always be hiring, whether you need people at the moment or not. this allows you to continuously bring in new blood. but they must meet the firm\u2019s expectations for performance, growth and advancement over a reasonable period of time. if they don\u2019t, they will have to leave the firm. manage the turnover and the cream will rise to the top.<\/li>\n
- tell your people the truth. you have managers who are never going to be partners. you have non-equity partners who are never going to become equity partners. you have equity partners who have retired but still come to the office to collect a paycheck. tell them it is probably time to move on. more than likely, they already know it, but inertia may have set in and they lack the motivation and energy to look for a new position or to truly retire. if you have attempted to counsel unproductive partners and managers over the years but nothing significant has improved, it is time to outplace those professionals.<\/li>\n
- make sure that your best and brightest take note that you are taking action with regard to the inverted pyramid. there are people in your firm today who are looking up at the layer(s) of people above them thinking, \u201cthere is no way that i can ever make it through or around them in an acceptable time frame.\u201d you can tell your \u201call stars\u201d that they are special and that you will promote them until you are blue in the face. but talk is cheap and if they can\u2019t see the path, they will leave.<\/li>\n
- demographics in firms today indicate that fewer people than ever want to be equity partners. that\u2019s because many are looking for a better work\/life balance.<\/li>\n<\/ul>\n
treat your \u201crising stars\u201d differently; pay them differently. don\u2019t get sucked into making everyone at a particular level look the same. they are not.<\/p><\/blockquote>\n
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- don\u2019t clog up your ladder with a large percentage of career people while you watch the \u201crising stars\u201d leave. perhaps this can be viewed as an up-or-out policy. so be it! you have a business to run.<\/li>\n
- every once in a while, initiate a \u201cpush-down\u201d of work at each level in your firm. people cling to the familiar and comfortable. it also justifies their existence. so, shake it up and ask everyone to push down 200 or so hours. you\u2019ll free up your high-level people who are capable of creating new work, get more of the work done at the right level and give the younger staff some challenging work.<\/li>\n
- if you have a partner performance management and compensation plan that is heavily weighted toward billable time and a billing run, change it to a plan that is directly linked to your firm\u2019s strategy.<\/li>\n
- promote a work environment that embraces non-traditional staff and partners. technology and remote connectivity have created opportunities to find great people. use these non-traditional methods to identify and employ such people.<\/li>\n
- grow! it will be very difficult to change the upside down partner\/staff pyramid without a solid growth strategy of 6 percent (organic) to 8 percent (with mergers\/acquisitions) for your firm.<\/li>\n<\/ul>\n
in conclusion<\/strong><\/p>\n
the undesirable but fairly common outcomes of an upside down pyramid are summarized below:<\/p>\n
\n
- you have too few younger staff. you have a tough time keeping the ones you have busy.<\/li>\n
- truly talented staff, your \u201call stars,\u201d leave because they don\u2019t see any opportunity to advance in your firm.<\/li>\n
- managers and staff do the same work with the same clients year after year.<\/li>\n
- you have a costly labor load and you have a difficult time collecting an acceptable billing rate for work that they have outgrown.<\/li>\n
- partners are full with compliance work and are not cultivating the high-value consulting work. even worse, they aren\u2019t in the marketplace developing new originations.<\/li>\n
- and, worst of all, you don\u2019t have the talent at the right levels to succeed as future partners who will help perpetuate the firm.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"