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Managing 70%

BY Joseph B. Altonji
August 12, 2003

Imagine the CEO of a major international corporation saying to her Board of Directors, 'We are doing a great job of managing 70% of our productive capacity.' And the Board responding, 'Great job, here's your bonus.' Or another CEO who says, 'We don't need to hire managers for our regional plants, because 70% of our capacity is in the main plant anyway. Let the others do what they want.' Hard to imagine, isn't it? Of course it is, because the concept of ignoring 30% of your business' productive capacity ' leaving it to 'manage itself' or, worse, considering it unimportant ' would get you fired in any business in the world.

Except in a law firm. There, managing 70% of capacity is the norm!

Let's back up a moment and consider what really happens in most law firms. Most partnership agreements say something like this: 'The partner is expected to devote his or her full professional energies to the practice of law on behalf of Smith & Jones LLP.' But what does 'full professional energies' mean? Well, it certainly includes doing productive client work for which the firm will get paid. In the typical U.S. law firm, partners bill 1700 to 1800 hours (call it 1750) to active client matters. But the actual commitment required of a successful partner in a U.S. law firm today is more like 2500 hours.

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