I regularly speak to audiences of lawyers, accountants and consultants about the challenges of making partner. In my talks I often share the ten lessons that my clients have learnt along their journeys to make partner. In this blog post I am going to share the eighth lesson; treat your practice like a business.
Profit isn’t something which is often spoken about in a professional practice.
I started my career in the supply chain with Procter & Gamble and Tesco. After six years in a very commercial and fast-paced environment, the world of the professions was a large culture shock. The biggest shock to the system was the lack of conversation about profits. Revenue, turnover, WIP, lockup, billable hours were banded around left, right and centre. Profit was hardly mentioned. It was as if I’d gone back into time to the days when you were in the profession rather than running your own business. Is it any wonder that so many professional services firms are struggling to make a profit at the moment? The metrics that matter in a firm are the ones that get talked about. Given that the financial metrics which are most talked about are billable hours, revenue, lockup etc is it any wonder that many fee earners treat their practice like a business. Many firms only train up their fee earners on how the firm really makes money when they get to the point of partnership. (This is far to late in my opinion!).
Remember that becoming a partner means that you become a business owner
As I’ve mentioned on previous occasions in my 10 lessons blog posts, becoming partner is not just another promotion. It’s where you resign from your job and become self-employed and a business owner of your firm. This means you need to know how to run a business if you are going to be successful as a partner. That’s why it is so important that you treat your own practice like a business.
What does treating my practice like a business actually entail?
I’m not suggesting you need to turn into Richard Branson overnight. However, these are some of the things you will do if you are treating your practice like a business:
- You will be working towards a business plan
- You will always look for opportunities to provide a higher quality service at a lower cost base, e.g. delegating as much work as possible down to the juniors on your team
- If asked you will be able to produce your ‘live’ marketing plan and talk about the challenges you have faced implementing it
- You will know all your key numbers and important people, e.g. best referrer, value of work brought into the firm
Remember that becoming partner is not just another promotion, it is where you become an owner of your firm. Therefore, you need to treat your practice like it is a business.