Procrastination - the silent killer

Is your firm suffering from the procrastination of its leadership team? Do decisions and projects seem to take forever to go from being a good idea to being implemented? Do problems never seem to be resolved and usually only when the s**t hits the fan? If so, there is an opportunity cost to your firm caused by procrastination.

The opportunity cost can be measured in various ways such as the following:

Performance issues

The opportunity cost of not addressing performance issues with staff and partners can be calculated by multiplying the number of months in which target key performance indicators have not been met. For example, Lawyer A has a key performance indicator of making $30,000 per month net profit. For the last 18 months, however, Lawyer A has been making a loss of $5,000 per month. The opportunity cost of having a performing lawyer in the position who is hitting the target is $630,000. Quite a dent in an equity partner’s earnings.

Not dealing with non-performance issues can also lead to high performing lawyers not being happy with firm culture and leaving out of pure frustration. The opportunity cost of this issue associated with procrastination can be measured by the net profit contribution of the lawyer when he/she leaves the firm if there is no replacement. If a replacement is made the opportunity cost is the recruitment cost (including time spent by internal people) plus training expense/time and the ramp up required on fee production. Further if the replacement does not equal or exceed the profit contribution of the previous incumbent the difference in contribution is an ongoing opportunity cost on an annual basis.

Non-execution of business strategy

Many firms struggle with business strategy. There may be none at all or there may be occasional nominal efforts to formulate one but then actual implementation never seems to happen or if it does it is a long drawn out process. The opportunity cost of not executing a strategic plan can be demonstrated by this example. ABC Lawyers went through the process of constructing a business strategy which included adding a new area of law. For various reasons, the new area of law was only added two years after the decision was made. It happened to be very profitable and contributed $500,000 to the firm’s overall bottom line each year. The opportunity cost of procrastination in this example is $1,000,000 which represents the two years in which the firm failed to implement its strategy on an expedient basis.

Procrastination can be caused for different reasons, none of which are mutually exclusive:

• Lack of focus or prioritisation of what is important;
• Lack of skills to make an informed decision or implement the task at hand;
• Lack of confidence;
• Poor time management;
• Overworked or lacking enough resources; or
• Embedded cultural issues that have not been resolved.

If procrastination is holding your firm back, work out the reasons why and address them. You will see the reward for this each and every year in your bottom line profit.