THE ISSUE WITH THE TISSUE (Part I): Business Operations & Management

I had just accepted my role at a small reputable law firm that had been around for more than four decades. It was an amazing opportunity, one that would allow me to showcase my business experience. In fact, I would be responsible for not only overseeing the firm’s daily operations but also implementing business strategies that would optimize its resources, improve overall efficiency and last but not least, maximize profits.

As mentioned previously, this firm had been around for more than forty years, and both partners had experienced a great deal of success. Each of them were experts in their respective areas of practice and as they worked diligently to serve their established client base, the Managing Shareholder needed a business savvy “right-hand.” Lucky for me, I was perfect for the role! My first order of business was to assess the firm and identify those things that needed to start, stop or continue. My assessment would be inspired by Lean Six Sigma’s “DMAIC” framework where I would define, measure, analyze, improve and control internal and external elements of the firm’s business operations.

After building rapport with the firm’s lawyers, paralegals and other supporting staff, I was able to have informal conversations about their overall experience within the firm. From those conversations, I was able to extract information related to both external and internal business functions that were having an impact on the firm’s overall success. This qualitative data established a solid foundation for me to begin. However, before I would start eradicating problematic people, places and things, I elected to sit back and observe. During my period of observation, I was drawn to an issue that was small but signaled that there was a larger problem within the firms operational practices. Yes, this firm had been successful for a long time but, like many other niche service providers, they were, “cash-flow rich.”

I can hear you now, “Jason, what does “cash-flow rich” mean? I coined this term after working with business owners whose unique expertise fueled consumer demand in a way that allowed them to charge considerable fees for their services and also leverage the client’s desperation to expedite payment. For example, if you are an individual who has been charged with committing a felonious act and are facing 25 years to life in prison, paying an Attorney hundreds of thousands of dollars is not far-fetched. Given your dire circumstances, you have zero leverage when speaking to this seasoned professional who has either minimized or eliminated the consequences of other accused felons before you. The client’s urgency does not signal urgency to the Attorney. Services begin when you pay. In instances like these, I have seen loved ones use their house as collateral to assist with paying Attorney’s fees. The truth is, an Attorney, or any other Entrepreneur that operates under these auspices are, in my eyes, “cash-flow rich.” Through my lens, being “cash-flow rich” does not mean that you have sound business practices. In fact, many times, those who are “cash-flow rich” have some of the worst and most destructive business behaviors. Why? Because the cash masks their ineptitudes. In essence, these Entrepreneurs’ bad habits are being rewarded. Not because they have exceptional business practices, but because they have leverage when setting price and establishing an acceptable payment timetable. In relation to my new role, the realization of a “small” snack and beverage problem was a clear indicator that there was more than what meets the eye. Certainly, this firm’s operations seemed to shine like the reflection of an iceberg protruding the arctic ocean. However, in this instance, I would need to suit up and prepare myself for a deep dive, one that would allow exploration of those cultures that are thriving below the surface.

My first observation made me raise my eyebrows. While perusing the firm’s stash of snacks and refreshments, I noticed that there were a few, wholesale sized soda boxes that held anywhere between fifteen and thirty-five cans of soda. While inventorying the soda and substantiating the space that they were occupying, I noticed that all of them had expired. I thought to myself, “I’ve never seen an expired can of soda.” This signaled a larger issue. Perplexed, I engaged a company paralegal who had been there the longest. I inquired, “who is in charge of ordering at the Firm?” She casually walked over to a manilla envelope and showed me a credit card that lived inside of it. Her answer...“whenever we need something, we go to this envelope, retrieve this card, and make a purchase.” My response...“is it just you that orders, or someone else?” As she sat down at her desk and slid her chair in, she responded effortlessly, “anyone can place an order with that card.” I almost spontaneously combusted! In that very moment, I alerted everyone that ordering would now come through me, and subsequently, I established processes and tools to streamline our new ordering practices. In my mind, we purchase what we need, when we need it and in a quantity that is acceptable and less wasteful.

In the 1700’s, Benjamin Franklin annually published the “Poor Richard’s Almanack.” Inside of one of the publications, he wrote a proverb that said “Beware of little expenses. A small leak will sink a great ship.” After taking a deep breath and experiencing a bit of satisfaction

resolving the “snack and beverage” issue, my newly centralized ordering duties would begin to expose additional cracks in our vessel. Surprisingly, the latest of my newly discovered “small leaks” was costing the firm hundreds of dollars annually. My accounting imagination began its involuntary calculations. Has it been like this for forty years? I began to follow the scent like a hound in the Blue Ridge Mountains. What would I discover?

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ABOUT THE AUTHOR

Jason Johnson, MBA, MAcc is an Entrepreneur, Educator and State Contracting Consultant who has decades of business experience. He has worked as an Analyst and Consultant for one of Georgia’s largest government agencies, and during his tenure, provided education, guidance, and support to more than five hundred business owners. He’s also the Author of Clearing the Hurdles: Winning Strategies for Entrepreneurs Interested in Government Contracting. Jason’s efforts have contributed to nearly $100 Million of contracting awards.