I was surprised recently to see a firm of accountants being applauded for the fact that partners were given goals regarding client time. This is hardly newsworthy. Then I read more closely. The partners in this firm are measured in terms of three categories of time:
- chargeable time (as has long been the case in many larger firms);
- contact time with their clients in a relationship management capacity (with a view to scoping ABOs – Additional Billing Opportunities); and
- time spent with prospective clients.
The most significant issue here was that the category three time was rated as important as chargeable time. This is worthy of applause, although it is open to abuse if not carefully managed. That though is indeed a management issue. It is absolutely right to record and measure the time. To consider the LONG TERM impact of attending a regular networking group and comparing this with more generic and random networking events. In both cases it’s important to also spend time on follow up 1-2-1 meetings with prospects and referrers. Focusing on short-term results is to misunderstand the way that business networking and referral marketing work.
Long time readers of this blog may recall a post I wrote 3 years ago: Are accountants as ‘stupid’ as lawyers? In it I repeated a David Maister story that is relevant here. David noted that there is general agreement amongst lawyers (and most other people too) that it is generally easier to win more work from existing clients than it is to get engaged to provide services to strangers (new clients). “Why then,” he asks, “do we risk upsetting clients by treating all the time we spend with them as potentially billable? And why do we only consider ‘billable’ time to be of value”
I would put it this way:
A firm will encourage and motivate the partners to devote time to those activities that they believe are being recorded and measured and rewarded. I stressed the importance of looking beyond fees billed in my 2006 blog post: Fees, fees, fees.
In the traditional model all the focus was on ‘billable time’. More sophisticated models take account of how much of such time is actually billed. This then requires careful monitoring to ensure that write-offs are fairly allocated to the partner’s time costs vs that of their teams or of specialists who have been working on the same clients.
When I was at Touche Ross (now Deloitte) many years ago they already had a time recording system that allowed client time to be recorded ‘below the line’. This was the category two time above and quite forward thinking for the 1980s.
Almost thirty years later, how many firms track and monitor category two or category three time? Do you think they should?