Admitting New Partners – Succession Best Practices
As we work through the succession and retirement of senior partners in our firms, a lot of us are also reviewing and updating our internal documents and agreements. A key part of the update should be focused around how we bring new partners into the firm to replace the “old guys”. There have been changes in valuations and process that we really need to be aware of. Following are some of the best practices you should consider:
• How many partners do you really need?
• Do you have a PIT (Partner-in-Training) program?
• Should your firm use Non Equity or Low Equity partner positions?
• Have you looked at how you’re calculating the buy-in?
• What percentage of ownership does the new partner get?
• Financing the Buy-In. How should it be structured?
Regardless of whether you change anything or not, the Baby Boomer succession wave presents an opportunity to review and challenge how we bring new partners into our firms. Read my latest article which discusses the above topics in more detail.