With the economic downturn, most practice groups are finding it harder to maintain margins, let alone increase them. Firms seem to be a bit stuck, not knowing what to do to tackle the problem.
Part of the reason this can be challenging is that the position across a typical firm can be complicated. For example, the levers to pull to improve the financial performance of a general commercial group where there’s high leverage might well be different to those for the high level specialists.
So here’s a proposed solution designed to help partners in each practice group agree the best way forward. It’s a diagnostic checklist combined with a ranking in terms of:
- How easy would it be to implement the change – partners would be asked to score from ‘very easy’ to ‘very difficult’
- What impact would the change have – partners would score from ‘big impact’ to ‘little impact’
To use this tool successfully, I would encourage firms to work with their in-house finance specialists. I see this topic as one of the useful agenda items you could have at a team meeting. The sharing of views that partners have could also provide a greater sense of teamwork.
Download the diagnostic proforma below.
For more on this subject, read https://tonyreiss.com/2013/03/12/matter-profitability-plugging-that-leaking-sieve/