More notes from Managing the Professional Service Firm…
- Rather than focusing on chargability and realization reports, look at profits per partner.
- For each activity the firm strives to improve (e.g. delagate better, develop higher value services) examine how each contributes to both short-term profitability and long-term health.
- These activities, in order of importance to health, are
- Raise prices
- Lower variable (delivery) costs
- Fix underperformers
- Increase volume
- Lower overhead costs
- is so important and offers a systematic method for improving it.