{"id":79007,"date":"2020-08-30t12:00:06","date_gmt":"2020-08-30t16:00:06","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=79007"},"modified":"2021-02-04t09:26:59","modified_gmt":"2021-02-04t14:26:59","slug":"cpa-firms-make-more-money-when-partners-do-less-billable-work","status":"publish","type":"post","link":"\/\/www.g005e.com\/2020\/08\/30\/cpa-firms-make-more-money-when-partners-do-less-billable-work\/","title":{"rendered":"why billing less may mean earning more"},"content":{"rendered":"<p><strong><a href=\"https:\/\/cpatwpe.s3.amazonaws.com\/cpatrendlines\/wp-content\/uploads\/2015\/05\/youngerwomanoldermancharts_dollarphotoclub_42144217.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-41125\" src=\"https:\/\/cpatwpe.s3.amazonaws.com\/cpatrendlines\/wp-content\/uploads\/2015\/05\/youngerwomanoldermancharts_dollarphotoclub_42144217-590x393.jpg\" alt=\"businesspeople discussing charts\" width=\"424\" height=\"283\" \/><\/a>here&#8217;s the proof.<br \/>\n<\/strong><\/p>\n<p><i>by marc rosenberg<\/i><\/p>\n<p><strong>question from a client: \u201c<\/strong>as the firm\u2019s mp, i\u2019m trying to encourage our partners to delegate as many billable hours as possible to the staff instead of doing it themselves. what is the benchmarking metric for how much of partners\u2019 billing responsibility should be performed by themselves?\u201d<\/p>\n<blockquote><p><b>more: <\/b><a href=\"\/\/www.g005e.com\/2020\/08\/23\/what-smaller-firms-must-do-to-become-firms-of-the-future\/\">what smaller firms must do to become firms of the future<\/a> | <a href=\"\/\/www.g005e.com\/2020\/08\/04\/the-antithesis-of-the-managing-partner-management-by-committee\/\">when managing partners can\u2019t<\/a> | <a href=\"\/\/www.g005e.com\/2020\/07\/12\/covid-19-adversity-and-innovation\/\">covid-19, adversity and innovation<\/a> | <a href=\"\/\/www.g005e.com\/2020\/04\/26\/is-mandatory-retirement-a-best-practice\/\">is mandatory retirement a best practice?<\/a> | <a href=\"\/\/www.g005e.com\/2019\/12\/29\/merging-in-sellers-what-you-need-to-know\/\">merging in sellers: what you need to know<\/a> | <a href=\"\/\/www.g005e.com\/2019\/09\/22\/take-yodas-advice-on-strategic-planning\/\">take yoda\u2019s advice on strategic planning<\/a><br \/>\n<strong><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-full wp-image-49700\" src=\"http:\/\/4f2bur4nuye2cgakm2rm61qk.wpengine.netdna-cdn.com\/wp-content\/uploads\/2016\/08\/yellow_key_clip_art-e1375897299811-36p-hi-1-e1470686574894.jpg\" alt=\"goprocpa.com\" width=\"39\" height=\"16\" \/><span style=\"color: #b79c00;\">exclusively for pro members. <\/span><\/strong><span style=\"color: #b79c00;\"><a style=\"color: #b79c00;\" href=\"\/\/www.g005e.com\/wp-login.php?redirect_to=\/\/www.g005e.com\/2020\/08\/30\/cpa-firms-make-more-money-when-partners-do-less-billable-work\/\">log in here<\/a> or <a class=\"external\" style=\"color: #b79c00;\" href=\"http:\/\/goprocpa.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">2022世界杯足球排名 today<\/a>.<\/span><\/p><\/blockquote>\n<p><strong>rosenberg response: <\/strong>there is a natural tendency for partners to perform high levels of billable hours, perhaps in the 1,200 to 1,500 range annually.<br \/>\n<!--more--><br \/>\nseveral reasons for this: (1) partners can do the work faster, more accurately and at a higher realization rate, (2) partners\u2019 work often doesn\u2019t need to be reviewed, (3) when partners do the work instead of staff, it\u2019s charged at a partner billing rate instead of much lower staff rates, (4) it\u2019s easier to meet time deadlines and (5) partners\u2019 compensation may be higher if their billable hours are higher.<\/p>\n<p>three huge problems arise when partners do too much staff-level work.<\/p>\n<ul>\n<li>first, the firm makes more money when partners do <strong>less<\/strong> billable work. therefore partners who do more billable work are tanking profitability.<\/li>\n<li>second, the more time partners spend on delegable work, the less time they have for business development, firm management and developing new services and niches.<\/li>\n<li>third, and perhaps most important, when partners do staff-level work, they shirk one of their most important duties \u2013 the training and mentoring of staff, thereby helping them learn and grow.<\/li>\n<\/ul>\n<p>this can make the difference between a firm having great staff with upward potential and a mediocre staff with little leadership skills or interest. when partners hog the work, they spend less time developing staff, which hinders staff growth.<\/p>\n<p>to prove the first assertion \u2013 that firms make <strong>more<\/strong> money when partners are <strong>less<\/strong> billable \u2013 we went into the rosenberg map survey data library and did some analysis. we computed the following statistic for three different firm size ranges: percentage of typical partners\u2019 client base that was performed by themselves. the numerator of the fraction is partner billable hours times standard billing rate times realization percentage. the denominator is a typical partners\u2019 client base. here\u2019s what we found \u2013 pay attention to the effect on our key profitability metric of income per partner:<a href=\"https:\/\/rosenbergassoc.com\/wp-content\/uploads\/2020\/08\/table.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-5970 size-full\" src=\"https:\/\/rosenbergassoc.com\/wp-content\/uploads\/2020\/08\/table.png\" alt=\"\" width=\"801\" height=\"229\" \/><\/a><\/p>\n<p>from a financial standpoint, as measured by income per partner, firms\u2019 profits are higher when partners are less billable.<\/p>\n<p>but i will make the more important observation that even more valuable than higher earnings, firms\u2019 partners should err on the side of being less billable so that you have time to develop technical, client relationship, servicing and leadership skills in your staff. the more partners turn themselves into delegators, trainers and mentors of the staff, and do less \u201cdoing,\u201d the stronger will be their team, making the firm infinitely more successful.<\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong>here&#8217;s the proof.<\/strong><br \/>\n<em>by marc rosenberg<\/em><br \/>\n<em><a href=\"\/\/www.g005e.com\/product-category\/marc-rosenberg\/?orderby=title-desc\">the rosenberg practice management library<\/a><\/em><\/p>\n","protected":false},"author":1339,"featured_media":52068,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","footnotes":""},"categories":[1363,3120,3002,2266],"tags":[],"class_list":["post-79007","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-pro-member-exclusive","category-special","category-partner"],"acf":[],"yoast_head":"<!-- this site is optimized with the yoast seo plugin v24.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ 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