By ADAM DAVIDSON July 29, 2013 Like a lot of accountants, Jason Blumer never really wanted to be an

By
ADAM
DAVIDSON
July
29,
2013
Like a lot of accountants, Jason Blumer never really wanted to be an accountant; he wanted to
play guitar in a hair-metal band. But like most guys who want to play guitar in a hair-metal band,
Blumer eventually realized that there wasn’t much money in touring bars and being paid in beersmeared
$20 bills. So he changed gears and decided to follow his dad into what seemed like one
of the more steady businesses around. After college, he bought some suits, joined a midsize firm
in South Carolina and processed his clients’ payroll and tax returns. He billed them by the hour.
He hated every second of it.
Blumer, 42, wanted to infuse a bit more rock ’n’ roll into his industry. So when he eventually
took over his father’s small firm, he made his own rules: There would be no time sheets, no dress
code and, most radical of all, no billable hours. He was convinced, in fact, that the billable hour
was part of a series of mistakes that took all the fun out of his profession. To him, it seemed like
a relic of a dying economic age and one that was depriving his industry of billions in profit.
The notion of charging by units of time was popularized in the 1950s, when the American Bar
Association was becoming alarmed that the income of lawyers was falling precipitously behind
that of doctors (and, worse, dentists). The A.B.A. published an influential pamphlet, “The 1958
Lawyer and His 1938 Dollar,” which suggested that the industry should eschew fixed-rate fees
and replicate the profitable efficiencies of mass-production manufacturing. Factories sold
widgets, the idea went, and so lawyers should sell their services in simple, easy-to-manage units.
The A.B.A. suggested a unit of time — the hour — which would allow a well-run firm to
oversee its staff’s productivity as mechanically as a conveyor belt managed its throughput. This
led to generations of junior associates working through the night in hopes of making partner and
abusing the next crop. It was adopted by countless other service professionals, including
accountants.
During the past few decades, as the economic logic of the United States has changed, global
trade and technology have made it all but impossible for any industry to make much profit in
mass production of any sort. (Companies like G.E., Nike and Apple learned early on that the real
money was in the creative ideas that can transform simple physical products far beyond their
generic or commodity value.) Similar forces have ripped through professional services,
particularly accounting, a profession that, until recently, was little changed from its 16th-century
roots. Software like TurboTax has made the most basic work worth little. Cheaper accountants in
India, Ireland, Eastern Europe and Latin America have steadily taken over the more routine types
of business, though not quite as voraciously as once predicted.
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Just as Apple doesn’t want to be in the generic MP3-player business, Blumer didn’t want to be
just one more guy competing to charge a few hundred dollars an hour to do your taxes. A few
years ago, he said, he realized that the billable hour was undercutting his value — it was his
profession’s commodity, suggesting to clients that he and his colleagues were interchangeable
containers of finite, measurable units that could be traded for money. Perhaps the biggest
problem, though, was that billing by the hour incentivized long, boring projects rather than those
that required specialized, valuable insight that couldn’t (and shouldn’t) be measured in time.
Paradoxically, the billable hour encouraged Blumer and his colleagues to spend more time than
necessary on routine work rather than on the more nuanced jobs. ……. …..

But those complex problems were the ones that Blumer wanted to solve, and he also knew his
insights were more valuable than the time it took him to conjure them. So he identified a niche
— creative professionals who struggled to manage their finances as their start-ups became
mature businesses — and he endeavored to help his clients make (and save) enough money that
they would gladly pay a significant fee without asking about the hours it took him to figure out
what to do. Blumer has been so successful in his approach that he has become a leading voice
among a national band of accountants who call themselves the Cliff Jumpers. Many Cliff
Jumpers have abandoned the traditional bill-by-the-hour approach to focus on noncommodity
accounting solutions for specific client groups. One focuses on entrepreneurs hoping to sell their
new businesses; several work with people who are terrified about starting a small business.
Perhaps without realizing it, the Cliff Jumpers are at the forefront of one of the great challenges
of modern economics. Measuring productivity is central to economic policy — it’s especially
crucial in the decisions made by the Federal Reserve — but we are increasingly flying blind. It’s
relatively easy to figure out if steel companies can make a ton of steel more efficiently than in
the past (they can, by a lot), but we have no idea how to measure the financial value of ideas and
the people who come up with them. “Compared with the mid-1900s, goods production is not as
important a part of our economy, but we continue to devote about 90 percent of our statistical
resources to measuring it,” says Barry Bosworth, a Brookings Institution economist who is a
leading thinker on productivity in the service sector.
Many economists have tried to break professional “knowledge workers” down into their
component parts. It’s fraught enough with lawyers and accountants, Bosworth says, but it’s all
but impossible with other professions, like doctors and teachers. “We don’t even try with
education,” he says. In the meantime, the Bureau of Labor Statistics directly measures the
productivity of only 60 percent of U.S. industries, which means that nearly half of our economic
activity is unknown, including almost all of the fastest-growing sectors. If education and health
care are not becoming more productive, as many economists fear, it will be hard to know if
government policies to improve those sectors are working without knowing what to measure in
the first place.

During the 20th century, industry started out in small workshops that created unique handcrafted
products. Over time, they morphed into massive plants that churned out a countless number of
identical units. Now there’s a synthesis. In the era of mass specialization, companies are using
high-tech efficiencies to make customized products that each consumer finds especially valuable.
This has enormous advantages for both consumers and producers, but the big problem it creates
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is that we don’t know how to do the math. Blumer, who, after all, is an accountant, told me that
set formulas and financial spreadsheets are just not compatible with this new approach to work.
He can only figure out what to charge his clients after spending a lot of (unbilled) time talking to
them about their needs. But now that it’s clear that the fundamental nature of work has changed,
it is fitting that a bunch of rogue outliers from one of the world’s oldest professions are helping
guide the way.
http://www.nytimes.com/2013/08/04/magazine/whats-an-ideaworth.
html?ref=accountingandaccountants
Guidelines for summary:
1. Read through the whole report with concentration. Then construct 3-5 sentences of
your own about the whole report. Thus, you will be targeting broad words/sentences and
only one central idea of the whole article. These 3-5 sentences will thus stand as the first
paragraph of your summary.
2. Then go back to the report, looking at only paragraph one of the article. Then
summarize the ideas in that one paragraph in your own paraphrased words and sentences.
If the paragraph in the report is about 6 sentences, you might be able to paraphrase the
main ideas of that particular paragraph in about 2-3 of your own paraphrased
words/sentences (or more if you need to).
3. Do not include verbalizations from the report into your summary without
converting it into passive voice.
4. If the report does not contain neat paragraphs, then divide the report into neat
sections yourself. The idea is to deal with each and every part of the report.
5. Do not include subheadings in your article summary. Embed the subheading as a
complete sentence to include in the summary.
6. When you have successfully worked on constructing some paraphrased sentences of
your own for each paragraph in the report, you may merge your paraphrased sentences of
the first paragraph of the report with the second, making it a fuller paragraph for the
summary.
7. The whole summary will approximately have 3-4 full paragraphs about one A4 size
page. ……. …..

 

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