Financially or just an acknowledgement?
Most professionals understand that the fees their firm earns ultimately pay their remuneration. But for many, particularly those outside the management team, the connection between their contribution to the business and what they are paid is less clear.
When I was appointed Head of Private Client at Simmons & Simmons, I was told that unless I achieved City-level profitability, I would need to find my future elsewhere.
I was given no guidance, mentor or manual, and very little feedback.
My remuneration increased, as did my bonuses, but I was never told precisely why.
On two separate occasions, I was told that clients I had introduced to other departments had made a significant contribution to their profitability. Indeed, I was congratulated on introducing what I was told was the most profitable client the firm had ever had.
But was that reflected in my bonus? I never knew whether there was an objective connection or whether the outcome was simply the result of a subjective committee discussion.
That was a long time ago. But the experience helped inspire me to develop Client-Centric, and it has left me with questions I would now like to put to professionals across different disciplines.
How is your contribution to winning new business measured, and how does it affect your remuneration and career prospects?
Whether you are a managing partner, head of department, aspiring partner or rising star, I would be interested in your experience.
More is not always the best answer
How does your firm measure the value of the work you bring in?
Is it the number of new clients introduced? Fees billed? Fees collected? Billable hours? Assets under management? Or profitability?
These are not necessarily the same thing.
A professional may introduce a client who generates substantial fees. But if the work involves significant discounts, unbilled time, slow payment or disproportionate demands on colleagues, how profitable is that client?
Conversely, a relatively modest introduction may develop into a longstanding relationship involving several departments, producing valuable work for years.
Which contribution should be recognised and rewarded?
And do the professionals involved understand how those decisions are made?
What happens when professionals understand the commercial realities?
I believe professionals begin to think differently when they understand how their work contributes to the commercial success of their firm.
They may become more strategic about the clients they want to advise, the problems they most enjoy resolving and the relationships they develop.
They may also become more willing to involve colleagues whose expertise could benefit their clients.
That was certainly my experience.
Introducing clients to other departments was not simply about generating additional fees. It was about understanding the wider needs of those clients and ensuring they received the advice they required.
Better client service, stronger professional relationships and improved profitability can reinforce one another.
But is that how your firm approaches these issues?
I would like to hear your views.
Are firms overlooking opportunities within their own businesses?
Professional firms invest considerable time and money in attracting new clients.
Yet how much attention is given to opportunities already available through colleagues, existing clients and professional contacts?
Do colleagues in different departments know what work others particularly enjoy?
Do they understand which clients would benefit from their colleagues' expertise?
And do the firm's systems of measurement and reward encourage collaboration — or unintentionally discourage it?
These questions are relevant not only to management but to professionals at every stage of their careers.
A more strategic approach
As you may have gathered, I believe a Client-Centric approach can benefit professional firms through better collaboration between colleagues, stronger relationships with external professionals and a deeper understanding of existing clients.
But I do not want to begin by assuming that my experience, however extensive, necessarily reflects the challenges professionals face today.
I want to hear from you.
There are different ways of developing a Client-Centric strategy.
For example, professionals advising entrepreneurs with interests in the Middle East might benefit from regular discussions with others whose expertise complements their own.
They could explore client situations involving international relocation, the sale of a business, family succession or cross-border banking.
As circumstances change, new discussions could examine how geopolitical developments, economic uncertainty or changes in regulation affect their clients.
Roundtable discussions, feedback and follow-up can help build relationships and keep them relevant.
But the starting point is not the roundtable.
It is understanding the commercial objectives of the professionals and firms involved, the clients they want to advise and the relationships they already have — or need to develop.
What about your firm?
If you are responsible for winning new business, do you know how your contribution is measured?
And how clearly is that reflected in your remuneration and career prospects?
If you don't know, perhaps you should ask.
And if you are on the management board, perhaps you should ask whether your colleagues understand what is expected of them and how their contributions are rewarded.
There will always be an element of judgement in assessing performance. But surely that judgement should be informed by clear commercial objectives that professionals understand.
Once those objectives are understood, professionals can be encouraged to develop relationships that produce worthwhile work for their clients and their firms.
I would particularly like to hear whether these issues resonate with your experience, whether you are part of the management team, an aspiring partner or a rising star.
Would you have half an hour to share your experience and explore whether a more strategic approach could benefit you and your colleagues?
Simply reply to me or call 07979 188 288.
You can also find out more about Client-Centric and subscribe to our weekly newsletter.
Caroline Garnham