I recently read a profile of a Bowman’s Top 25 firm where the managing partner indicated his role included the following major components:
- Visioning: What will the firm be in 5 years, 10 years?
- Developing goals and creating the business plan to reach them.
- Building his personal business.
- Mentoring other partners.
The profile went on to say this: “The firm believes that the managing partner must stay involved with clients in a significant way. [The MP] bills about 1100 hours per year and the average partner in the firm bills about 1250. The MP of a $10M firm should bill about 1000 hours and for every $2M above that there could be a 10% reduction.”
Try this thought experiment: You’re a shareholder in General Electric (when Jack Welch
was the CEO). You visit a plant and see Jack show up, put on overalls, pick up a wrench
and help the employees on the line build an airplane engine. Is that a buy or sell signal?
Managing partners should understand their only customer is the firm. Period. Firm leaders need to trust their people, provide them the necessary resources to do their jobs adequately, instill a sense of passion and pride in the firm, and then get out of the way and let their people do extraordinary things.
Leadership is not about personality; it is about performance.
Leaders should spend nearly all of their time working on the firm, not in it. Of course they can be ambassador for the firm, and have customer contact in order to sell the firm’s vision, but to suggest they should have a billable hour quota is not just nonsense, it is nonsense on stilts.
Far too many firms are overmanaged and underled. One of the reasons for this is the antiquated idea that firms sell hours, which is patently false (no customer buys time).
The Old Practice Equation of the firm––that you control and leverage people, set billable hour quotas, pay strict attention to rules and efficiency, etc.––is essentially a management model, not a leadership model.
It is not a model that instills trust, let alone a sense of purpose and passion. It leads to commanding people rather than inspiring them. It is obsolete in a knowledge economy.
Managing partners should stop working on the production line and do what all leaders should be doing: Creating the future of the firm. Also, as Peter Drucker has pointed out for decades, the ultimate test of any leadership role is succession.
The firm profiled above may have a nice looking income statement now, but if the managing partner continues to spend most of his time and energy satisfying nonsensical billable hour quotas, rest assured the firm will have a crisis of succession, not to mention a lack of direction heading into the future. Anyone can manage a firm; only a leader can take it somewhere.
Also, most firms are managed by consensus. But as Margaret Thatcher is fond of pointing out: “Consensus is the negation of leadership.”
Managing partners need to spend more time on innovation, especially experimenting with alternative governance structures. The partnership model is simply hindering larger firms because there is no one person in charge. Every decision has to have a consensus, and this an extremely costly and inefficient way to operate an organization. Any one or two partners can usually stall or block a change program, to the long-term detriment of the firm. Every partner is a CEO, hence no one is. Imagine if a senior executive at GE didn’t agree with Jack’s Six Sigma initiative. Do you think he would have had job security?
What is your firm’s core ideology? How will you build a visionary practice where people voluntarily decide to invest their human capital? How will you create a timeless practice that junior members will want to purchase at some point in their careers?
Will you build a practice at which you would be proud to have your son or daughter work?