A firm’s people are fundamental to its success. And it has long been recognised that any leader – whether a managing partner, chief executive or practice director – has to rely on management disciplines if the firm is to achieve its goals.
As the war for talent gathers pace, it’s in firms’ best interests to attract, retain and provide a motivating environment for the ‘unsung heroes’ occupying management roles such as finance and marketing.
But in reality, there’s a distinct perception divide between a firm’s partners and those ‘non-fee earners’.
By failing to recognise their contribution, accountancy is in real danger of losing out to other sectors, such as financial services, for employees who are so central to their success. This will become even more pertinent given the serious talent shortages currently facing the profession and other competitive challenges, such as the ongoing drive towards greater regulation.
It always used to be the case that partners would step into these management roles, but gradually this came to be seen as a poor use of valuable partner time, not to mention a risky exercise, as the actions of over-enthusiastic amateurs could result in costly mistakes for the firm.
At the same time, the leading professional firms have grown rapidly over the last 20 years into complex businesses employing many thousands of people, driving the need for greater focus on ‘the firm’ rather than on ‘the partners’.
In theory, a partnership stands for collaboration and team work: in practice many partners are highly competitive animals, heavily focused on client-based financial measures to determine relative status and reward. So it’s hardly surprising that those who neither directly bring in fees nor deliver services to clients are referred to in unhelpful terms.
The language used to describe ‘non’ partners or ‘non-fee earners’ is in itself highly emotive, and indicates that the roles are not important or valued.
Non-chargeable suggests that it is less relevant than chargeable, and while it probably is if you are an audit manager, it most definitely is not for a business group head.
Differentiation between fee earners and non-fee earners, and talk of ‘support staff’ and ‘non-accountants’ all reflect the culture of the past. Even in a firm where the terminology has been changed, it can persist, deeply rooted in people’s minds.
The notion that bringing in fees and delivering client service are superior to all other roles when evaluating contribution to a business is probably unique to the profession. CEOs of top commercial organisations are not expected to join the production line, serve customers over the counter or answer calls from the general public.
Their role is to articulate and promote the organisation’s strategy, manage relationships with key stakeholders including employees and clients, and foster an environment and culture where everyone gives their best. Isn’t it time that accountancy firm leaders provided a similar contribution to the business?
The huge growth of firms over the past decade and the management challenges that accompanied it meant that hiring a cadre of specialists in areas such as marketing, finance and HR was no longer a luxury – it became a necessity.
Finance partner and similar roles have been retained, but with a new emphasis on making life easier for their hired professionals.
Attitudes towards such staff may be changing – there are many leading firms where they are now recognised as critical team players – but the second-class citizen syndrome still exists in pockets (and some large pockets at that).
These ‘unsung heroes’ – marketing, HR, finance, IT, facilities and knowledge professionals – should more accurately be called ‘practice management professionals’. And the term ‘fee earner’ with its emphasis on billing should be replaced by the term ‘client service professional’, while recognising that our unsung heroes serve internal clients.
Some firms are reticent to disclose ratios of client service professionals to practice management counterparts, on the grounds that it is ‘commercially sensitive’, ‘inconsistent with other tables’ or ‘does not compensate for outsourcing’. Nonetheless, our research shows that the 36 firms employing at least 130 client service professionals between them employed a total of 12,509 practice management professionals, or 20.8% of their headcount.
The growth in the proportion of practice management in 20 years has been phenomenal. In 1984 when ethical constraints were lifted, there were just a handful of non accountants responsible for marketing in UK accountancy firms, compared with more than 1,100 in the top 36 firms today.
Demand continues to grow as larger firms beef up their divisional capacity and medium-sized firms recognise that it makes commercial sense to hire more practice management professionals, especially now there is a pool of talent in larger firms looking for a new challenge or greater autonomy.
Most partners now recognise that it would be nigh on impossible to manage a modern professional firm without involving dedicated people from finance, HR, marketing, IT and other disciplines.
Their participation assists a firm to achieve its fee and profit targets and to ensure that client service professionals’ time is spent in the market with clients and prospects.
Against a backdrop of increased regulation, ever greater focus on technical and professional training to support quality, and huge demand for qualified professionals in practice, corporate and public sector worlds, an effective cadre of practice management professionals is vital.
It is critical that accountancy firm leaders do not promote the MPF campaign in negative terms, as partners hate to be demonised. Show them how the firm will be changing to encourage better behaviour on both sides.
Embedding in your firm’s unsung heroes a genuine sense of self-worth and a realistic understanding of what they contribute and where they really fit in is equally important.
We advocate firm leaders across the board to recognise ‘horses for courses’ and make a real effort to praise their own practice management professionals – as well as partners – on a regular basis.
Avoid making potential recruits feel like second-class citizens before they walk through the door. Make unsung hero recognition your firm’s official policy.
If you work for a firm with ambition, make a stand and join the revolution.
Ed Smith is a senior partner of PwC and a committee member of the Managing Partners’ Forum. Richard Chaplin is executive director of the Managing Partners’ Forum.
Link: A breakdown of full and part-time non-fee earners at leading UK firms