Two of the biggest challenges I have with professional service firms are structure and compensation plans. Most, if not all, are partnerships and the billable hour structure in and of itself can be unwieldy, hamper innovation, create incredible competition, and stifle incentive. But surely the biggest challenge is compensation programs. Many (if not most) of these firms hold out the carrot of “equity partnerships” for those deserving, overworked few who can bring in business. But their compensation programs and lack of support for non-partner employees has exactly the opposite effect. There are certainly exceptions to this in some big firms, but if you’re not a member of one of those, you might want to keep reading.
I can’t count the number of young accountants and attorneys who’ve voiced the same concerns about their career trajectories: How can we bring in clients if we’re expected to bill an average of 37-38 hours a week on top of the other non-billable work that pops up? When are we supposed to engage in all these business development activities? Who’s supposed to pay for those networking events and professional association dues and meetings? How am I supposed to learn how to do it?
It’s up to the leaders of all firms to provide the necessary resources for their employees to be successful. Another responsibility of a leader is to identify high-potentials and nurture their development. They can’t just leave it to dumb luck. An employee who makes partner because he or she is a “rainmaker” isn’t necessarily smarter than anyone else. She may just be naturally a more gregarious extrovert who has no personal life. Or, he may be a naturally grumpy introvert who just happened to have a superb mentor who coached him in the subtleties of building relationships with powerful people.
But the reality is associates in a billable hour firm can count on doing around 200 marketing hours a year. Some firms will tell you to do this on top of your 1800 billable hours, meaning that you must put in 2000 hours of work time (non-administrative, i.e., organizing your office and cleaning up your inbox is neither billable time nor marketing time). Yikes!
So I say it’s time to shake things up in the billable hour culture. Firm leaders need to recognize that many of their expectations are unrealistic in the modern work environment. Competition is rampant and often brutal. Clients are both more cost-conscious and more demanding. Economic “growth” is limping along at a snail’s pace. And all of this contributes to a demoralized workforce that is just going through the motions waiting for payday – a dangerous place to be for firms that want to be successful.
What’s a smart leader to do? I suggest taking some tips from how other industries are “engaging” their employees to bring the highest value to the organization:
- Teach them. No one can know everything and no one can do everything well. If you want your associates to bring in business, get someone in to train them if you don’t have anyone in the firm who can.
- Coach them. One-time training doesn’t work. Without a plan for follow-up coaching, even the greatest skills and techniques learned in a workshop won’t stick. Again, if you don’t have anyone in the firm who can (or will) take on this responsibility, hire a professional.
- Reward and recognize them. All top organizations have good reward and recognition systems – and the simpler, the better. Without one, even your most motivated employee will lose heart – and wind up in a more supportive firm.
- Engage them. To keep your best associates, you must help them see the impact their job has on the overall organization and support them in their efforts. If you don’t do this, the ones who leave your firm won’t be the ones you want to leave – they’ll be the ones you want to keep.
How do you do these things? You can do them yourself although, if you’re honest, you know you probably won’t. Oftentimes the most effective, cost-efficient, and quickest way to start implementing change is to hire a consultant. There are scads of us out there and yes, we range on the continuum from “Awful” to “Awesome.” But many of us have had years of experience and can bring a fresh perspective and creativity to solving these challenges. What do you have to do? Remain open to trying something different because if you always do what you always did, you’ll always get what you always got.
And associates … if you’re reading this what can you do? Get a fake e-mail address and forward this anonymously to your firm’s leadership.