The list covers how to frame the committee’s mandate (“full reign”) to how its decisions should be treated (“No appeals. No approval needed.”).

(Copyright 2010-2012 Rosenberg. Adapted with permission.)

August Aquila

by August Aquila
Author of “Leadership At Its Strongest”
and “How to Engage Partners in the Firm’s Future“

Research shows that managing partners and marketing directors are still facing some major challenges when it comes to getting their firms to implement change. Why?

Here are four key issues firm leaders today face.

1. Getting partners to buy in.
2. Creating a firm vision that gets all partners on the same page.
3. Helping develop a culture of accountability.
4. Being asked to accomplish too many goals.

When the managing partner and the chief marketing officer work together they have a better chance of being successful in these areas. You may ask what do these four factors have to do with the marketing director? And I would answer – everything.

Overcoming these four issues will make the firm more competitive, efficient and profitable. Here’s how the best managing partners work with their marketing directors:

1. Getting Partner Buy-In

Getting partners to buy in really falls to leadership. Your marketing director should be your key ally and one of the key leaders in your firm. It does not benefit the marketing director or the managing partner if there is no partner buy in. If the managing partner or marketing director does not get buy-in for their plans, then they just won’t happen. Hence, marketing directors and managing partners need to support each other in this area.

Probably the best way to get buy-in is to listen to what the partners want to accomplish as a group and as individuals. Then, find those partners that really want to work with you. Getting a few early successes will help bring the other partners around. While the marketing director or managing partner may be very interested in what they are trying to do, they need to remember WIIFM. Partners are thinking all the time about “What’s in it for Me.”

If you do a good job at listening, you will understand the trade-off that the partner is making when you ask him/her to participate in your new management initiative. Also, if there is not any correlation between what you want the partner to do and how they get compensated, you will have difficulty in getting their buy-in.

When partners are happy (read complacent) with the status quo, it’s going to be very difficult to get them to change. “Hey, things are going well, why should I?” they will say, or, “Why should we do it that way, we have always done it this way.” Remember, you don’t need to get all of them to change, just one or two to get started

2. Getting On The Same Page

While it is not necessarily the sole responsibility of the managing partner and marketing director to help create a vision for the firm, they should be an integral part of the process. I would venture to say that most firms do not have a mission and vision that motivates partners and staff. And only a very few have core values that really drive behavior in the firm.

It’s hard for firms to create meaningful goals if their mission and vision are not clearly articulated. Mission tells the world why the firm is in business and vision (an internal document) paints an image of what the future looks like for the firm. Core values identify the behaviors that will guide everyone’s day-to-day actions.

You can’t create goals (strategic or marketing) until you have a mission, vision and core values that motivate your team members. The managing partner and marketing director should facilitate the process either by themselves or with the help of an outside advisor. Once the vision is set, you can start setting goals (financial, client, employee, marketing and system) that will move you toward your vision.

3. Developing Accountability

Accountability, according to the Merriam-Webster dictionary, is “the obligation or responsibility to accept responsibility or to account for one’s actions. The obligation is your promise to do something. Hence, accountability is all about the individual and what they do or don’t do. According to the book The OZ Principle you can see accountability in your firm. People who are accountable – see the issue, own it, solve it and do it. Those without accountability ignore issues, point fingers, cover their tails, and wait and see.

In order to have accountability in an organization it is critical to set goals and expectations for partners (and others in the firm). Without clearly articulated and written goals you will never have a culture of accountability.

4. Too Many Goals

Most managing partners and marketing directors are spread too thin. They are asked to accomplish too many goals. The result is that they do so with mediocrity and not with excellence. It has been shown that once you try to accomplish more than three important goals, your chance of doing them with excellence diminishes. Both the managing partner and the marketing director must know their priorities and fight the urge to do more. Instead, they should accomplish the most important things and do them well.

While none of these issues is easy to implement in a firm, that does not mean that a firm can continue to ignore any of them. Each requires a commitment to change, to operate differently. The benefits to the firm are numerous. Partners will begin to work together rather than to do what they think is best for them as individuals. The firm will have clarity of direction and make decisions that move it toward its vision. As accountability increases, productivity, efficiency and profitability also increase. Achieving fewer goals gets partners focused on what is important to do and ultimately they become more productive and happier.

These changes won’t happen overnight, but if you are serious about becoming a better firm, then start working on them now.

Sandi Smith Leyva

Start with a clean spreadsheet.

By Sandi Smith, CPA
Accountant’s Accelerator

There are dozens (and maybe hundreds) of ways your practice can leak money. Here are three ideas that are fairly simple to implement and may be some great goals for you to consider.

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1. Lost customer opportunities.

In just about every business I’ve worked with, there are opportunities within your current customer base that have not been harvested. When you offer multiple services or products, it may even be that some of your clients do not know everything you do.

Here’s one of dozens of quick “aha” exercises that is bound to uncover some revenue opportunities for most of you.

1. Open a clean spreadsheet to get started.
2. In the rows, list each current customer you have.
3. Along the columns, list your current service lines.
4. In each cell, drop in the revenue you received from that customer.

The blank cells should reveal some opportunities for new revenue.

2. Marketing on the fly.

In many service businesses, it’s feast or famine when it comes to clients. That’s because when you have work, you’re too busy to market, and when you don’t have work, you may be reacting to the next marketing idea that falls in your inbox. The result is a money leak that has you paying way too much for marketing that often does not return your investment.

The answer is twofold. One is to get enough marketing training so that you know what marketing investments are going to return the most value for your business. The second is to create a year-round plan to smooth out your marketing efforts.

3. Multi-tasking.

It’s so interesting how multi-tasking makes our brains feel like we’re accomplishing more. But scientific studies show how inefficient multi-tasking really is and that we’re accomplishing quite a bit less when we multi-task.

The quintessential example is driving while talking on a cell phone, which is actually so life-threatening that we have laws against it in many states. In life or death work settings such as hospitals and airplanes, multi-tasking can also have fatal effects. In the typical workplace where lives are not at stake, then multi-tasking is simply a waste of time, money, and energy.

Taking steps to move from multi-tasking to developing superior time management practices in your business workflow will allow you to plug this common money leak. It’s a habit we need to consciously work on breaking.

August Aquila

The new practice management discipline.

by August Aquila
Author of Leadership At Its Strongest

No profits, no mission, as one of my partners is fond of saying.

While leadership, balanced life, outstanding client service and efficient processes are critical for success, they mean nothing if the firm is not sufficiently profitable to make investments for the future and compensate performers. I want to focus on ten ways to make your practice more profitable.

These ten areas form the basis of a practice operational review.

1. Enhance revenue. There are several ways to boost the firm’s revenues. Obviously raising rates is the easiest. Rates should be adjusted for inflation at least yearly and whenever someone is promoted. Another way to increase revenue is to provide more valuable work to clients. This requires that you and your people develop new skills and perhaps move into new or different niches. For example, firms that have gotten into litigation services or business valuations have been able to augment revenues because they can charge more for these services. Finally, start doing more true value billing – i.e., throw away your timesheets and bill on what the value is to the client.

2. Control engagement cost. An important element in your profitability is engagement management – having the right people on the job, giving everyone budgets, having efficient systems to move the work through and monitoring the entire process. Writedowns usually point out how well you are managing an engagement. There is nothing wrong with a planned writedown; it’s the unplanned ones that suck the profitability out of a firm.

3. Deal with unprofitable clients and services. You must know which clients and services are profitable. The last thing you want is to go after more unprofitable work. There is an old joke in the retail industry that goes like this. Salesperson: “Sir, I believe we are losing $1 on each shirt that we sell.” Manager: “Well then, we will just have to make it up in volume.” Take each one of your clients (or client families) and determine the gross profit margin. For each client that has a gross margin of less than 65%-70%, ask yourself the following questions:

How can we raise the margins on this client? (Higher fees or reduced cost)

Is there another person in the firm who can service this client more efficiently?

Is there another reason to keep this client?

4. Address underperforming partners and staff. Underperformers take time and energy away from more important activities in the firm. That’s why it’s critical to have a proper performance management and evaluation program in place. Don’t accept nonconformance or mediocrity.

5. Examine your marketing efforts and marketing ROI. Is your marketing targeting the right clients? Too many firms think that anyone who breathes is a potential client. No matter what size firm you have, it’s important to know what your ideal client or clients look like. If you have a tax practice that works with high net worth individuals, then someone with an adjusted gross income of $75,000 probably is not a target for your firm. And don’t use the excuse that young professionals can learn on these clients. It’s better that they learn from you. Do you think that blue chip investment banking companies take small clients just to have their people develop skills?

6. Improve utilization. Productivity or utilization is still a key to firm profitability. One way to increase productivity is by assigning weekly goals to everyone in the firm. Utilization has a lot to do with firm management. Higher utilization usually means that the firm is doing a better job of managing its personnel.

7. Reduce overhead expenses. Expenses always have a way of creeping up. Every two years or so, re-examine your overall expense structure. What are you getting in return for each expense? Rather than just adding an inflationary amount to your expenses, do next year’s budgeting using a zero base approach.

8. Invest in technology. While technology is a major expense item in most firms, it can also be a number one driver of profitability. The more you can move toward a digital office the more efficient your processes become and the more you will save on each engagement.

9. Focus. We have found that firms that focus on fewer goals each year are more profitable than those that have many goals. The reason is simple. Fewer goals mean that you can achieve more of them with excellence. Achieving goals – client service, profitability, systems, etc. – with excellence drives profitability.

10. Keep Score. Finally, those firms that are more profitable are those that keep score and let everyone in the firm know how they are doing. Here’s what to track – revenue and profits, number of new clients, number of employees who have developed new competencies and number of implemented client service plans.

Become disciplined about running your firm. It’s usually the basic things that you need to do, day in and day out, to put more on the bottom line. Remember no profits, no mission.

15-item checklist on effective staff management.

Ed Mendlowitz, CPA, ABV, PFS
Author of “Implementing Fee Increases”

Question: My staff doesn’t listen to me.  To be able to manage and control my business I need them to prepare a monthly schedule of what they plan on doing that month.  I further need to know each morning if they did what they were supposed to do the previous day, and whether there was anything not done, or anything extra that wasn’t planned on.  My problem is that they don’t give me the schedule and then don’t call or email me to tell me what they did. I really need to know this stuff and can’t figure out how to get them to do it.  What can you suggest?

Response: I had two phone calls, each lasting almost an hour, with the practitioner who called me. But I could spend a couple of days on this.

Here are 15 action items to consider.

“My staff doesn’t listen to me.”  This is the starting point.  You need to recognize who is the boss.  A tip is to ask yourself this question and see how you feel about the reality of it.

In general the staff people are the “bosses.”  This is so in the sense that they do what they want, and not what they ought.  In some cases it is amazing that much gets done in these firms.  Unchecked staff left to their own decisions will do what is easiest, less complicated, most comfortable or as non-confrontable as possible.  On the other hand, the boss needs the most important project done first, followed by the second, and then third and so forth.

In professional practices, staff need to be managed.  Not micromanaged in the areas of their professional expertise and ability, but in many cases, micromanaged in how they choose to spend their time.  Their professionalism will dictate how they will handle a situation, how much time to commit to it, when to seek assistance, when to call it quits, and when to decide if enough has been done or if they’ve reached the point of rapidly diminishing returns.  Professional judgment, creativity and expertise need freedom.  However, which clients are worked on, and when, and for how long, needs strong control. That is the firm’s inventory and needs careful management. In most cases what is to be done should be predetermined, planned and should work off a budget decided on by the client and partner.  Because of the high level of certain staff, much freedom is extended for self-management or direction, but it still needs accountability.  Thus, the monthly schedules and daily status updates.

It is not usually an isolated instance when staff don’t respond and comply with the scheduling and accountability procedures.  There are most likely other things they won’t be doing: things such as the proper completing of audit and other work process checklists, circumventing supervision procedures, not keeping up to date such as the timely going through journals they subscribe to, shortcutting work that needs to be done for clients and inattention to CPE programs.

Noncomplying staff are either the fault of their managers or a lack of something in themselves, or both.  If there are isolated instances within a firm, then I would blame the staff people.  However, if it is widespread, then I would have to blame the managers or partners.

I recommend getting rid of staff who thwart the management controls the firm needs.  No control means no growth and lower profits, and the inevitable leaving of those people at some point and usually at a time of their choosing, which can be at a bad time for you.  This is hard, but your focus needs to be what is best for you in the long run.  Retaining such people is a bad decision.

I suggest that one reason staff don’t follow through on administrative things they need to do is their awareness that the partner does not look at it, or question anything or follow through on what they need to do with the information provided.  Repeated ignoring of the submissions results in noncompliance.  Think about your role, or lack of role, in this process.  If it is important, then you should be on top of it regularly, if not daily.

I know, you say you are too busy to look at it daily.  What about weekly?  Or do you give it a cursory glance monthly or when a problem arises?  If it is important, then make it important!  Make it your job to control your “inventory.”

Oh, you don’t want to spend the hour or so a day? Then hire someone to do it.  Maybe add it to the duties of your secretary or an administrative person.  Work out what needs to be done. Following is a proposed listing of how this could be done:

Each staff person prepares a suggested monthly schedule three days before the beginning of the month.

A partner or senior manager reviews the entire schedule with each staff person discussing what will be done, why, budget requirements, deadlines, carryovers of work not done and what wasn’t scheduled and why.

At the end of each day the staff person will send a brief email or fax affirming scheduled work that was done, listing anything that wasn’t done, anything extra they did, any carryover work and when it will be done, impending deadlines and anything they want to call to their supervisor’s or partner’s attention.

Each morning by 10 a.m., the admin person will review the daily reports and compare it against the work that was scheduled, will make sure unperformed services are scheduled, and find out why additional work was done and whether it should be billed.  A brief summary should be prepared and discussed with a partner – that morning.

The partner should review the results with the admin person each morning, either in person or by phone, to determine the adherence to the schedules and to make necessary decisions.  If a staff person needs to be spoken with, they should be contacted at that time.  It is important and necessary for the staff to see the followthrough and resolve of the partners.

People who don’t comply need to be spoken to and continued noncompliance should lead to dismissal.

Sophisticated CPA firms are adding the position of firm administrator at an increasing rate. But there is still little consistency in what that entails. Some firm administrators have the authority and responsibility of a chief financial officer or chief operating officer. Others may be little more than personal assistants to the managing partner.

After years of study at hundreds of CPA firms, practice management consultant Marc Rosenberg has formulated a 16-item checklist by which to gauge an FA’s role within a firm. In “CPA Firm Management and Governance,” where his findings are spelled out, he plots the 16 criteria along a three-point scale of authority, showing how an FA’s duties evolve from the lowest level of authority to the highest level.

Some things are predictable. It’s clear that one key measure of an FA’s role is the relationship to the managing partner (MP). At the lowest level, he or she is an aide de camp. At the highest, she operates as a COO alongside the MP as CEO.

But other things are less predictable, and this is where Rosenberg’s study breaks new ground. Rosenberg, for instance, has been able to chart the evolution of the FA role using more subtle criteria, such as their activities in mergers, partner meetings, budgeting and strategic planning.

Here is his analysis, plotted on a grid:

The Evolution of the Firm Administrator

                            (Copyright 2010-2012 Rosenberg. Adapted with permission.)

Rosenberg

The position of firm administrator or COO is quickly gaining in importance, and just as quickly evolving.

According to Marc Rosenberg, author of “CPA Firm Management and Governance: The Managing Partner’s Guide to Running a CPA Firm Like a Business,” there are at least ten duties that are both critically important to the firm and that define the job of the COO.

They are:

1. Internal accounting, financial and operational reporting. Includes budgeting and cash management.
2. Monitor overall profitability. Analyzes financial and operating reports, identifies areas holding profits back, monitors productivity of firm personnel, monitors realization and challenging write-offs, collections and cost control.
3. Staff and human resources. Point person for firm recruiting, performance evaluation, salary administration, training, CPE documentation, new employee orientation and benefit administration.
4. Partner activities. Works closely with the managing partner and the board. Attends all partner meetings and retreats, plans agendas for partner meetings and monitors implementation of strategic plan goals and action steps.
5. Manages most of the firm’s systems. Example: time and billing.
6. Manages or oversees the firm’s technology.
7. Manages administrative issues – space planning, high-level landlord issues, policies and procedures and supervision of the admin staff.
8. Property/casualty, benefit and malpractice insurance.
9. Marketing support. Only if there is no marketing director.
10. Mergers. Manages administrative and physical aspects of merging in smaller firms.

Most administrators are responsible for most of these duties, but few are responsible for all of them. Each of these duties may be managed, supervised, coordinated or performed directly, depending on the size of the firm and what the firm needs from the position.

While some firms have explored the idea of client service groups, and leading thinkers like Patrick McKenna have been training firms in the concept for several years, few firms have developed the art and science of the team as successfully as the Washington-based law firm, Akin Gump Strauss Hauer and Feld.

More for mid-size and large CPA firms: What We’ve Learned Since Accounting Marketing Was Legalized • Do Accounting Firms Really Want an ‘Image’? • What Accounting Firms Need to Learn from Personal Financial Planning Specialists • The Delicate Art of Positioning Your Firm in the Mind of the Prospect • Even a Random Disaster Can Be Controlled with Risk Management •

This report includes:

• The lessons from an interview with creator and manager of the program.
• Three necessary elements for success.
• Ten accountable responsibilities for a client service team.
• Seven actions common to successful teams.
• Five questions every team should ask clients.
• Effect on fees.
• Departure from traditional practice.

Under the aegis of its brilliant and energetic client service advisor, Iris J. Jones, and with the full support of its chairman, Bruce McLean, Akin Gump has so finely tuned the team concept that as of this writing, it now serves clients with more than 65 highly skilled, powerfully effective teams.

A lawyer with a strong practice background, Jones was brought in to Akin Gump in 2003 to establish the team concept. What she has done most brilliantly is inculcate the concept within the highest echelons of Akin Gump’s management, and then develop a system to build the teams effectively on almost a production line basis, without losing the individual identity and value of each team (or its members) in working with the distinctive needs and opportunities of each individual client. A truly remarkable feat.

She is repeating the feat now at Chadbourne & Parke, where she heads the firm’s marketing operation.

That Jones is so successful is no surprise, considering her background. With a J.D. from The Thurgood Marshall School of Law, Texas Southern University, she has served as an assistant attorney general of Texas, and as director of the city of Austin’s legal department, supervising 50 in-house attorneys. She has been in private practice in two prominent Austin law firms, and has served as an instructor and trainer in many aspects of legal practice. To this background, which affords her a full understanding of the law firm and the client relationship intricacies, she brings an extraordinary organizational skill. If, as has often been said, managing lawyers is like herding cats, she has mastered the art of herding cats.

The team concept begins, she says, with helping a firm’s senior managers understand the concept and values of a comprehensive client satisfaction program. This goes beyond simply supplying legal service on demand. It requires a willingness to understand and penetrate the client’s business and business and legal needs. It requires that present and future team members understand the need to cooperate on a very high level without giving up individual status or initiative. With management backing, some 70% of the firm’s partners attended courses run by the William J. Flannery training firm of Austin, Texas, which emphasizes working in teams. The courses are not just motivational cheer leading, but rather intensive training in the skills of cooperation and collaboration. Presentations about the client service teams were presented at partner retreats, which further built enthusiasm for the program.

A second necessary element is a good client relationship management or knowledge management system that tracks information about clients, appropriate aspects of law, firm activity in behalf of the client, and measures firm performance. It serves, as well, to track team activities and performance.

A third necessary element is a good strategic plan for the firm, which will ultimately shape the strategic plan for each team in serving the team’s client. The strategic plan is inherent in the success of a client service team structure. “The traditional approach to strategic planning involved long and protracted processes, requiring a series of meeting with individuals possessing varied self-interests, personal agendas, and a lack of focus or direction,” says Jones. The results of such planning approaches, she says, were plans that participants didn’t support, nor from which they got clear direction. The result was that plans supposed to cover the following three to five years became obsolete well before that.

The traditional idea that high quality and high value services are enough to be successful in a competitive global market is a myth, Jones suggests. A sound and realistic strategic plan, she says, is a foundation for superior performance, she says, and high quality alone is not enough. “Exceptional performance and client service of the highest quality are essential elements in expanding relationships with current clients and are the critical ingredients in capturing new and loyal business relationships,” she points out, “But functions best only within the context of a strategic plan.” And it is this exceptional performance that the team is capable of consistently delivering.

The contemporary strategic plan, she says is a function of defining the market, defining the firm in terms of its ability to serve the market, and developing a strategy to help the firm meet the needs of the market. But it’s the clientele, not the firm, that’s primary in a sound strategic plan.

It should be noted here that the client service team is more than a group of partners gathered together to descend on clients. The team is a complex organism, trained to function as a team, in the firm’s service to the client. It functions with a strategic plan that’s predicated on the firm’s own strategic plan. Its members are chosen specifically by the needs and opportunities of the team’s client, are well-trained in the process, well-indoctrinated in the client and the client’s business, and assiduously monitored. Thus, the need for intensive commitment to the process. And the need, as well, for a culture of collaboration. Collaboration and teamwork, she notes, are not learned in kaw school. And while every firm may have its stars, the well run team doesn’t submerge the star’s talent, but rather, magnifies it .

“The first step in the process of collaboration,” says Jones, “is that the firm or business entity must define its place in the market for the services it provides. The core practices or products must be must be defined and designated first and foremost in order to clarify for the internal team the firm’s priority, and the client’s expectation from a team of talented professionals.”

Forming a team begins with a basic understanding of the client’s business and needs. This is a foundation for selecting the disciplines from which the team will be assembled. Members of the team may well include lawyers from several offices, which not only assures the most appropriate team for the client, but serves the firm’s practice offices by offering the firm’s full range of services regardless of the offices or the client’s location. “The most successful team,” says Jones, “select the members who have the talent to match the needs and challenges of the client.”

Many law firms, Jones notes, are not yet willing to address attorney performance issues that arise from time to time while serving the needs of a client. “It’s sometimes awkward and often difficult to confront relationship managers or the service providers of a client when the performance, communication or service delivery is not consistent with client expectations,” she says. “However, it’s an essential step to identify and address the failure of a team or an individual team member in order to quickly respond and remedy the problem.”

Given an understanding of the client’s needs and problems, the team is then formed by selecting the several lawyers best able to meet those needs. A client service team member is selected based on what the member’s skill and experience can bring to the team to add value to the benefit of the client first and foremost. As new opportunities for client service are identified, the team may be expanded with appropriate lawyers.

A client service team leader is appointed for each team by senior management and is responsible for:

1. Serving as the relationship manager who is responsible for knowing the client needs and desires
2. Communicating vision and direction to the team
3. Coaching team members
4. Scheduling team meetings and reviewing team’s progress
5. Evaluating team members and providing feedback on performance and service
6. Rewarding and recognizing team member contributions and successes
7. Coordinating firm resources, lawyers and support staff
8. Identifying best talent to work on specific client projects
9. Building commitment, confidence and consensus
10. Taking leadership role in action planning

In addition to bringing their skills and experience to the team, client service team members are responsible for:

1. Learning and understanding the clients business
2. Understanding the firm’s capabilities
3. Identifying problems and opportunities
4. Coordinating and sharing client information
5. Developing and sharing ideas for new services
6. Attending and fully participating in team meetings
7. Taking ownership of the action plan

In serving the client’s needs, the team establishes a successful business partnership with the client. Inevitably, this results in adding value and benefits to the client. This coordinated approach improves communications, allows for consistent advice, and helps build a long-term relationship that serves to achieve the client’s global business objectives. The teams objectives are met through the team’s strategic plan, in which each team member has a defined role and responsibility.

By frequently discussing the client’s expectations, the team is better able to understand the scope of the work, including staffing expectations, budgetary forecasts, and the necessary level and frequency of communications of information regarding the project.

A significant part of the team process is to keep abreast of the client’s satisfaction with the firm’s service. This is essential to client retention, as well as to keeping the team’s strategic plan on course.

The questions to be asked, either in ongoing discussions or by formal survey, are:

1. How are we doing in providing legal or other services?
2. Are we communicating with you according to your preference?
3. Are we keeping you well informed?
4. Are there any concerns about the team leader or the team members serving you?
5. Now that we have met your expectations, what can we do to exceed them?

Accountability, an integral factor in the team concept, is important for monitoring and measuring the successful accomplishments of the team, as well as for tracking the responsibility of individuals to the team. Team leader accountability reports, team member evaluations of the leader, and team leader evaluations of team members are among the tools the firm uses to monitor team performance and client satisfaction.

Ultimately, the goal of the client service team process is to apply a systematic approach to all significant clients so that the opportunities to serve their needs are maximized. The success of the client service team initiative is its ability to build high-quality, enduring relationships through teamwork and a commitment to using the firm’s best resources. “Dedication to client satisfaction requires the rigorous and unrelenting pursuit of the core values of excellence, commitment and intensity,” Jones says. “To build a preeminent client base, one must concentrate on excellence and value. The pursuit of consistent quality must be unyielding.”

That Akins Gump has been able to sustain a high level of performance for 65 teams is a function of Jones’ organizational skills. Computerized performance tracking, bi-weekly strategy meetings, standardized report forms and spread sheets form a knowledge management system that not only tracks performance, but spots both trouble spots and team opportunities.

With all the advantages to the firm from client services teams, the greatest beneficiary is the client. For the client, the program means more efficient service at lower overall cost, access to vast resources that might otherwise be difficult to draw from the firm, rapid response and better crisis management, and budget certainty.

For the firm it has meant improved client relations, high value and interesting work, and all of the advantages of the trusted advisor relationship. Significantly, it has also meant higher annual fees than ever before – from an average of $5.3 million from 1993 to 2001, increasing to an average $7.0 million from 2002-2004.

And where once attorneys were reluctant to collaborate with one another, the Akins Gump team members are more than enthusiastic. Says one partner in Dallas, “From simply communicating new developments to coordinating approaches on new opportunities, the client service team has been invaluable to maintaining our relationship in an increasingly competitive environment.” Says a Washington, D.C. based partner, “The client service team approach has netted the firm energy, work, and litigation opportunities that we have not had in the past, and was an important factor in the firm’s selection to be one of Deutsche Bank’s eight preferred providers.” And more of the same, from all of the partners functioning as part of client service teams.

The client service team is a 21^st century answer to the dramatic changes in the professions and the clients they serve. It’s a new structure for law firms – and accounting firms as well – to meet the client needs of the future in an era of elevated competition. It is a structure that enhances sensitivity to client needs, that allows firms and clients to become real partners, and that more than anything, offers real competitive advantage.

The well run team program is not a simple nor a casual concept. It requires the commitment of the partnership, and recognizing that new times call for new structures and views of professional practice. It demands the enthusiastic support of the firm’s management team, a clearly developed and dedicated program, and the organizational skills of a client service coordinator who fully understands the client relationship process. It can be a complex program, and certainly, it must be done recognizing that it requires departure from traditional professional practice.

But when it works, it’s worth its weight in successful and profitable client relations.

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Bruce W. Marcus is a pioneer in professional services marketing and coauthor of “Client at the Core.” This is adapted from his new book, “Professional Services Marketing 3.0,” available for purchase here.

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Copyright. Used by permission.

By Marc Rosenberg
Author of “CPA Firm Management and Governance.”

Ideally, a firm with a “true” managing partner uses the compensation committee system for allocating partner income. One of the strengths of this system is that it gives the firm flexibility in recognizing the performance of all partners, the roles they play, how well the roles were performed and achievement of goals.

Different partners have different strengths in one or more of the following areas:

1. Bringing in business.
2. Client relationship and engagement duties.
3. Truly managing the firm, including service as department heads and committee members.
4. Administration (different from management).
5. Leading a firm niche or specialty.
6. Training staff.
7. Mentoring staff.
8. Technical expertise in audit or tax.

Marc Rosenberg

There is no magic approach or formula that dictates how each of the above should be weighted vs. the others. It’s up to the compensation committee to decide this. However, the vast majority of firms compensate the first three items above more than the others.

I’ve heard that some managing partners are compensated partially or totally based on the profits of the firm, but I have not personally seen this once in over 20 years of consulting.

Special factors to be taken into account in compensating the managing partner

1. Other than managing the firm, two performance attributes tend to result in the highest level of compensation: bringing in business and the size of one’s billing responsibility (sometimes referred to as book of business). When a partner serves as the managing partner, he or she reduces the time spent in pursuit of these two activities and, therefore, will post lower production statistics than other partners with little or no management duties. Related, the managing partner may have transferred clients to others to free up the time necessary to perform the job.
2. Accomplishments of the managing partner that lead directly to improved profits, such as:

• Orchestrating a successful merger.
• Hiring a partner from another firm.
• Installing a new time and billing system that results in fewer write-offs.
• Challenging partners on their WIP write-offs, thereby increasing realization.

(Copyright 2010-2012 Rosenberg. Adapted with permission.)