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The One Minute Manager . . . . .

The National Post recently released its annual FP500 report that lists Canada?s largest corporations, as well as the 20 largest law firms. As a ?numbers? person, I always enjoy reviewing the lists and attempting to seek insights from these successful businesses.

Of particular interest was the associate/partner ratio of the major law firms. I have always argued that the Canadian firms lag our American counterparts by failing to exploit the economics of associate leverage. It is not uncommon to see U.S. firms with two, or three, or more associates per partner. The median ratio for the FP500 Canadian firms is a mere one to one.

Although the larger Canadian firms continue to be behind, there has definitely been an improvement over recent years. The magic of income enhancement by leverage is now being recognized. Torys leads the list with a ratio of 1.67 associates per partner.

Another statistic available from the information is the staff/lawyer ratio. The median ratio for the large Canadian firms is 1.56 employees per lawyer. This ratio has not improved for many years notwithstanding the massive investment in technology. Work processes have remained mostly unchanged despite new approaches that are available through automation. While the major corporations have made great productivity advances, most law firms remain entrenched in old ways.

It may be helpful for you to track your own ratios over the past few years. Perhaps there are untapped income gains available through leverage or productivity improvements. Our clients have seen significant profit improvements by minor tweaking of these important economic drivers.

We would look forward to assisting you to achieve your highest income potential.