Managing The Professional Service Firm
are (in order of impact on profit health): 1. Raise prices (fee levels) 2. Lower variable (delivery) costs 3. Fix underperformers 4. Increase volume 5. Lower overhead costs
David H. Maister • Managing The Professional Service Firm
leverage is also central to its economics.
David H. Maister • Managing The Professional Service Firm
In a partnership, the ultimate measure of profitability is (or should be) profit per partner, which is driven by three main factors, margin, productivity, and leverage.
David H. Maister • Managing The Professional Service Firm
Such meetings are often held after a good dinner in a private room at a fine restaurant. After dinner, the firm presents its plans for developing its practice in the specified area, including the development of new services, enhancement of existing services, and other strategic changes it is considering. The clients are then invited to critique the
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User group structure
At the expertise end, it is appropriate (and not uncommon) to find profit-sharing and bonus pool systems for junior professionals, while in experience-based practices greater use is made of straight salary, with increases deriving from seniority and the accumulation of increasing amounts of experience.
David H. Maister • Managing The Professional Service Firm
Each group is given the freedom and autonomy to plan its own activities—the plan is theirs. They are not being asked to execute the ideas of others (with which they may or may not agree).
David H. Maister • Managing The Professional Service Firm
Training would need to become a little more formal and structured in order to capture and disseminate…
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David H. Maister • Managing The Professional Service Firm
GreyHair:
Consider what will happen if a firm brings in a mix of client work such that its “proper” staffing requirements would be for a slightly higher mix of juniors, and a lesser mix of seniors than it has (i.e., the work is…
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David H. Maister • Managing The Professional Service Firm
A major, and common, form of listening to clients is a more or less formal program of visits to key clients by senior partners of the firm (or, if the firm is not a partnership, then by office or practice managers or “executive committee” members). Frequently these “visits” are conducted not in the client’s offices, but over dinner.