Delegate More, Work More?
Source: The Marc Rosenberg Blog
The following includes excerpts, reproduced with permission, from a blog entry by Marc Rosenberg.
Is it better for partners to have high or low billable hours?
I have always favored the low-partner-charge-hours model. To be fair, when we analyze practice management metrics, firms with higher partner-charge hours do out-earn firms with low-partner-charge hours. I believe that the majority of these firms' partners work these high hours because they are either (a) intentionally choosing to focus on short-term profits to the detriment of the long term or (b) have no choice but to work these high hours because they can't find enough qualified staff.
During a recent conference, someone asked: “Do firms with high-partner-charge hours experience lower chargeability from their staff? And conversely, do firms with low-partner-charge hours experience higher productivity from their staff?”
If the partners are keeping their own billable hours lower by delegating work to staff, it seems logical to expect staff billable hours to be higher. So, I decided to analyze the data in The Rosenberg 2012 MAP Survey and see what the correlation is between partner and staff billable hours. The results are surprising and counterintuitive: The higher the partners' billable hours, the higher the staff's billable hours. And the higher the staff's billable hours, the higher the partners' billable hours.
I think I have an explanation. Higher performing firms grow faster and their partners are always busy. The partners feel that the more they delegate, the more new work comes in. The number of people in the firm compared to the volume of work that needs to get out the door is highly strained. All of this translates to higher billable hours for both partners and staff. This phenomenon more than offsets any reduction in partner billable hours due to delegating work to staff.
For the complete post, read “Partner Billable Hours & Staff Billable Hours – What's The Correlation?”
From The Marc Rosenberg Blog, December 12, 2012, http://blog.rosenbergassoc.com.