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[Editor's Note: A&FP reviewers rated Ed Wesemann's feature article from "much to agree with" to "excellent" to "super," but three Board members had differing views on specific points. The following exchange between Ed, John Alber and Jim Davidson is followed by a comment received later from Ed Poll. Yet another perspective on the question of associate profitability is being formulated by another discussant as an upcoming article.]
Using Empirical Data
John Alber [Technology Partner, Bryan Cave LLP]: I agree with Ed Wesemann that firms should not let inflexible cost allocation decisions (including those built into inflexible off-the-shelf software products) interfere with common sense and good judgment. Firms have to be careful in setting measures of any kind. One has to look only as far as that old warhorse realization to see the perils of slavish adherence to a measure at the expense of good sense. Some firms use realization as a measure of a practice's success, yet do not add good-sense checks and balances (eg, testing whether the rates on which realization is founded are sufficient to produce profits). As a consequence, these firms often encourage high-realization but low profit practices.
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