Time allocation for practice leaders in professional services firms
Tags: Time, Professional Services, Consulting, Workplace, Lawyers

Photo by Arlington Research on Unsplash

Professional services firms offer highly customized, knowledge-based services that require a lot of face-to-face interactions. They sell the skills of their employees based on the number of hours spent on the project, the so called “billable hours”. In that sense, time is one of the key resources of professional services firms. The role of the practice leader is to make sure that all the resources of the practice are used efficiently and in a way that maximizes profitability. The drivers of profitability are margins, productivity and leverage. Consequently, the work of the practice leader is to make sure that:

• Margins are sufficiently high (not too high and not too low);

• The productivity level of the practice is excellent;

• The adequate level of leverage is maintained in accordance with the strategy of the practice.

In order to manage these priorities, the practice leader has to carefully manage his time and how he allocates it among different activities. Time is always a very scarce resource for managers and practice leaders are also concerned by that challenge. The figure below presents what we consider to be the best time allocation a Practice Leader should adopt. We think that 45% of his time should be allocate to “dealing with senior professionals”, 25% to client relations, 15% to “new business development and selling”, 10% to “doing professional work and being personally billable and 5% to “administrative and financial matters”.

Figure 1: Time Allocation of a Practice Leader

The most important assets of professional services firms are the knowledge and skills of staff. In that respect practice leaders must make sure the staff is always motivated, trained and rewarded. That’s why the best practice leaders spend 45% of their time dealing with senior professionals. If the senior staff is motivated and properly trained and rewarded, they can cascade the motivation down to the lowest levels of the practice. Depending on the leverage of the practice, senior staff have high power on the motivation spiral that should take place.

The practice leader spends most of his time with senior staff because he acts as a motivation maintainer. Among others, he must provide clear goals, provide prompt feedback, reward performance and hold professional accountable for their results. Dealing with senior professional is mostly about balancing the “hygiene” (short term) and “health” (long term) goals of the practice. The key issues are related to day to day management: increasing volumes and lowering overhead costs. Here the objective is to keep the level of margins and productivity high. In that respect, it’s important to be creative on pricing, to invest in skills development, to monitor key productivity KPI and to promote staff mobility and flexibility.

Practice leaders should allocate 25% of their time to client relations. They must concentrate on activities that yields the highest ROI (Return on Investment). In that respect, super-pleasing and nurturing existing clients must be the priority. Super-pleasing involves seeking delight and not only mere satisfaction. Since satisfaction is linked to expectations and perception, it is important to keep expectations low and deliver a work that is perceived as excellent and beyond expectations. The practice leader must make sure that client’s industries are always carefully studied to adapt to eventual issues. This also goes through organizing market research, conferences, and feedback systems to better understand current clients. It also helps in keeping existing clients engaged. It’s important to avoid the syndrome “bad customers drive out good customers”.

The third activity that should mobilize the time and attention of practice leaders is selling and new business development. It should account for about 15% of their time. In fact, for the future growth of the practice, leaders must not only keep existing clients but also manage to acquire new ones. This can be done through courting and broadcasting. Courting involves writing a proposal or showing to the prospective client that we can handle his problem. Broadcasting is the less effective method and involves seminars and newsletters that show that the practice is knowledgeable and following the trends of its industry or field of expertise. This has a lot of impact on the “health” of the practice because it is about the long-term objectives and growth of the practice.

The fourth activity that should mobilize the time and attention of practice leaders is doing professional work and being personally billable. It should account for 10% of their time. This is a good thing for the practice because the fees of practice leaders are very high and thus bring a lot of income to the company. The involvement of the practice leader may be needed in some sensitive and complex projects. It can also be a way to attract new customers by showing close management and implication. This is only possible when dealing with “brains projects” or just to define the scope of the project, the approach and key deliverables. In fact, these types of project require a high degree of creativity and deep industry knowledge.

Finally, the best practice leaders spend 5% of their time dealing with administrative and financial matters. Here the practice leader must care about the internal processes of the company and how to improve them. He also must think about recruitment. Depending on the level of leverage needed in the practice, the leader must decide on the number of junior professionals that need to be hired. Financial matters are very important because the practice must be profitable. The staffing must be perfectly deployed to minimize non-billable hours for “grinders” and “minders”.