As recent as 8 months ago, we dont have the notion of 'Managers'. Everyone works as Engineers and Developers.
The upside is, everyone is billable. The downside is, of course, quality is unchecked, productivity is unchecked, organization and clients are not managed, because there are almost noone has time to do these non-billable, and yet important other things.
Another notable negative effect is motivation. Some clients dont have to time to manage and communicate with the engineers. So the engineers work with little pressure, with noone overlooking their work, no reward / penalty, no meaning to their work, and that really push down motivation. Low motivation of course results in low productivity, and it's never beneficial to clients.
And thus lesson learned. Slowly transitioning, we are now fully organized. Managers are in place. Every engineers and developers have their own managers.
Managers must, in essence, act as a coach. Coach guides. Coach cheers athletes on good work, confront them on bad work, and keep raising the bar for better future performance. Even the best athlete, if he doesnt have a coach, can never be as optimal as when he does have a coach. The same applies for engineers; they need an internal manager.
I learn this from Managing Professional Services Firm by David Meister. A must-read for both professional services firm and also its clients.
***