Why Operational Debt Is Just as Dangerous as Financial Debt
The Hidden Debt No One Tracks
Law firms obsess over financial debt — but ignore operational debt: the inefficiencies that build up when systems and structure lag behind growth.
Examples of Operational Debt
Outdated Tech. Legacy systems slow everything down.
Undefined Roles. Ambiguity causes bottlenecks and burnout.
Manual Processes. Tasks take twice as long as they should.
No Documentation. Tribal knowledge disappears when people leave.
The Cost of Operational Debt
Every inefficiency compounds over time. Eventually, it costs real money — in missed deadlines, poor client experience, and staff attrition.
Example: The Firm That “Couldn’t Afford” a System
I worked with a firm that delayed upgrading its billing system for years. They “saved” on software costs — but lost hundreds of hours in manual work. When we finally automated, their A/Rs improved dramatically because their bills went out timely, profits increased because time tracking was much more efficient, and morale was boosted because people weren’t frustrated by all the manual work anymore. It was a much-needed breath of fresh air.
The COO’s Role
A Fractional COO helps:
Audit existing operations.
Eliminate bottlenecks.
Build scalable systems that prevent future debt.
The Bottom Line
Operational debt is invisible — until it tanks efficiency and profit. The sooner you pay it down, the faster your firm grows.
At ING Collaborations, I help firms eliminate operational debt before it costs them growth and profitability.