The way most professional services firms are organized is the partnership, which more often than not is based on the premise that the people who bring in the most business earn the biggest cut of the take. Some firms have begun to question the wisdom of this model, and are moving to an organization that splits up the income evenly amongst all partners.
Is this good for growth? In what dimensions is growth measured? Revenue or profit? Client satisfaction? Is revenue growth a proxy for a satisfied client base? What about other goals like developing and retaining top talent?
A recent survey conducted by Grant Thornton of mid-size professional services firms inquired about the two opposing partnership models as well as value pricing, which is another idea finally seeing the light of day.
Mr. Moore says there are storm clouds on the horizon and firms that don’t address the changing environment risk failing.
One of those clouds is the focus on an eat-what-you-kill business model. It promotes stars and rainmakers, those who bring in the bulk of business, who are tight with clients at the expense of the health of the overall business.
I don’t see a problem with promoting stars, and neither should firms that want to grow and prosper. Bringing in business is good on all levels of the firm, from the lowliest junior staff to the managing partner, and there’s no reason why firms should stop encouraging this.
Mr. Moore says more law firms need to adopt a team-based model that stresses firm-client relationships over individual-partners relationships and which deploy alternative billing schemes.
I think we’re already doing this on some levels. Clients build working relationships with the lead partner but also the tax partner and other concurring partners brought in for their specialized skills. Senior managers and managers are increasingly being brought in right from the beginning, and even senior staff if they have certain special skills.
I’m not against the main premise of the article — the so-called “eat-what-you-kill” model attracts a certain type of person and promotes a certain type of culture. And an organization that is essentially the opposite will affect the opposite. It will foster greater teamwork as it attracts those more inclined to lean on their teammates.
But I’m not convinced that those are the firms that will outlast the other ones just yet. Nor am I sure whether I would prefer at this point in my career or later on to work at one of them.