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When the CFO Has to Let Finance Staff Go

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When the CFO Has to Let Finance Staff Go

by Angie Mak, 15 February 2012
topics:
Human Capital Management Management
tags:
Professional Development talent management
To me, that isn’t really adding value; that’s just providing information and data. The value-added part is understanding what’s happening in the market, understanding what other partners and other practices are doing, and then providing [the particular] partner with suggestions on the proposal.
 
Finance should say, “It is best to provide a quote using this fixed rate, or best to quote using a blended rate, or it’s best to quote with further discounts because we want the deal.” 
 
How do you provide your people with the resources to do that? I assume how a deal is structured in another law firm is confidential data.
It is. It is not necessarily that we compare ourselves with other law firms. Even within Linklaters, we should provide excellent advice.
 
Different partners will do quotations differently. Some partners will be very desperate for the deal, and they might offer extremely high discounts . . . A finance manager should go up to that partner and say, “You shouldn’t do this unless there is a strategic reason to do so, because this is a loss-making deal.” The finance managers can do that even without comparing ourselves to other firms.
 
It doesn’t make them very popular with the lawyers, so we need to provide them with good advice . . . Imagine if the partner’s portfolio looks bad [because of loss-making deals]. But we are helping [the partner] by coming up with better deals. That’s where I expect them to provide advice, not data.
 
These skills aren’t something that a person can develop quickly. It takes understanding the business and doing this more regularly until you are more confident.
 
If I’m doing a deal with a country where they have withholding taxes, the manager should know that. He or she should tell the partner, “If you do this, you lose 10% or 20% of the profits on taxes. That’s a loss to your bottom line. What do you want to do about it? Do you want to recover it?” Sometimes, the partners may not consider these things, and that’s where our value is.
 
During the crisis, currency fluctuation in Asia was a lot [more volatile] than other regions. In Japan, the currency fluctuated by 40%-50%. That has a big impact on the bottom line and the price will go haywire if we don’t manage it properly. Our job is to tell partners things like that, that they shouldn’t quote in a certain currency, so we don’t get exposed to foreign exchange [volatility].
 
I think finance managers can add a lot of value with the things that they already know. But I think they were used to providing information and data. That’s where I have been trying to change the behaviour and mindset.
 
How long does it take to effect the transformation?
At least a year or more, or even longer, depending on the person. Three to six months is tough, unless it’s an external hire, who has already done this. For an in-house [staff], you have to unlearn the culture and past habits.
 
What I am doing in Linklaters is basically changing the culture.
 
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