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It’s all purple dollars. The firms have goals to keep a project under a certain time allowance. That almost never happens. It’s going to be done regardless and people will get paid. Wish the firms stopped caring about this dog doo. You can’t hold people accountable in a variable cost model with 80% of your revenue is fixed. Gets me all riled and antsy.
As a manager I can tell you we hate those budgets more than you do. It all depends on the partner. Some are reasonable and can negotiate fair fees. Some are incompetent in the fee negotiations and instead of owning the reasons why margin cang be higher put pressure on managers to meet certain margin irrespective of the reality. So those managers that dont care about the budget have partners that dont care either bc the engagement economics is well set up. Those that obsess over every hour charged have the second type of partners. Dont hate on managers. Hate on partners
Gt1 totally agree. That's why I absolutely hate small audits.
It’s usually dependent on their predecessor. Did that predecessor manager accurately budget the time and price the engagement accordingly or did they succumb to the pressure of the partner to keep it at a certain number of hours because they couldn’t negotiate a fee increase? For those that don’t care as much, it’s likely because the budgeted hours are appropriate or they don’t actually know how to manage to a budget.
As a partner, I know the vast majority of my engagements are properly priced and a few are dogs. For jobs that I know what the economics reflect and the results show just that, I don’t micromanage my team. If I’m expecting 70% realization and I get 40%, then I have to question it. If I’m expecting 70% and we are at 68%, I don’t sweat it. Too much going on to worry about the small stuff