Organizational Issues in Professional Firms

I was reflecting recently about management of professional firms and I thought it might be interesting to share some of my thoughts.  I have been thinking about some experiences I know about legal firms and accounting firms. 

The most interesting one was a CFO from a Canadian Utility decided to leave the company as it was moving its head office.  He was Chartered Accountant and well respected.  He joined a large Canadian law firm as Chief Administrative Officer.   Another fellow was a respected head of a large CA firm retired and became CEO of another Canadian legal firm.  I was convinced that both would get eaten alive by the partners of the law firm.  The CEO fellow lasted less than a year and admitted it was a mistake.  The CAO was quite a different story and he helped that firm thrive.  A friend of mine used the metaphor for this CAO position was he was like a deputy minister who provides his minister with excellent staff work but does not get involved in politics.  The CAO provided the law firm with excellent staff work but did not get involved with the law practice.  He was the servant of the management committee.

Another accounting firm had an excellent Administrative Partner who also served the management committee and help the firm proper.  He retired and was replaced by a respected partner of the firm.  The new fellow wanted more power and engineered his was into become the CEO as well as CAO.  He made some significant mistakes and was removed eventually.  He was replaced by another person as CEO with the same result.

A IT consulting firm that I know well tried to solve their "overall management problem" by appointing a CEO to be in charge.  I think each of the partners felt that the CEO should tell the other partners what to do, but not me.  The fellow  was burdened with all the administrative headaches and very limited management power, a no-win situation.

My conclusion is that a professional service firm is better served by a management committee of active professionals and a dedicated CAO, who provides the firm with excellent staff support without the responsibility of "herding the cats".

The key to a successful professional service firm is having excellent professional who focus on service to their clients and excellent staff support so the professionals can concentrate on what they are best at.  Trying to make a admistrator out of a dedicated professional is problematic, if not impossible.

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