The
prevailing business search practice model requires operators
to recruit business savvy, experienced, extremely talented,
highly intelligent, motivated and educated individuals to
work in relatively small offices offering high compensation
packages and little else.
Many
of the individuals who fit the profile eventually leave
to open their own firms, convinced they can do it better.
These individuals quickly discover the realities of ‘the
business’.
There
is a better way. Successful law, accounting and consulting
firms have implemented the ‘leveraged business model’.
They recruit talented, highly intelligent, motivated and
educated individuals at entry-level positions.
This
business model postulates there are numerous daily activities,
in our practices that can be accomplished with minimum business
experience and savvy.
The
typical 'producer' is most comfortable controlling every
aspect of the process and may have convinced him or herself,
'making airline reservations' is a $300 an hour activity.
However, The trip to the library or the hours spent surfing
the Internet researching and entering corporate data into
the computerized systems or qualifying resumes does not
require an advanced degree. Research, name gathering, prospecting,
logistics, interviewing and many other activities can and
must be done by less tenured people.
In contrast, there are several components of the process
that must be 'handled' by the managing partner.Client qualification,
deal quality control, closing and practice 'air traffic
control' are the $300- $1,000 an hour activities.
Major consulting firms have mastered this model. They hire
3 entry-level professionals for every manager they will
need in 2 years. The 2 professionals, who do leave, were
well trained, enjoyed their job and the firm, and are usually
placed into corporate clients who become the firm's big
clients over time.
The profit structure in the short term is positively affected
by several important firm dynamics. The entry-level types
do not require big sign- on costs and turnover is reduced
in the short term because these people can actually do the
job (that is outlined for them). The sophomores are more
productive and the upper classman recognize that the skills,
time and investment necessary to replicate their job are
daunting.
Firm value increases dramatically. Businesses that rely
on a few 'producers' who walk out the door each evening
are difficult to sell. Firms built on solid business principles
where the staff can be replicated by design are indeed sellable.
Ultimately, it should be recognized that the acquisition
of clients and the fulfillment of search assignments require
multiple skills. It is rare that any one individual will
excel at all that is necessary to complete the cycle and
that a team is always more powerful than any one individual
trying to be everything to every client or candidate
