Adamson Advisory

CPA Firm Partner Laments

Inside many multi-partner CPA firms, there are usually some troubling issues. I have heard about these issues first-hand, as I network with partners from various firms. I also uncover many of these issues as I survey firm partners prior to a planning retreat.

Here are just a few of the more common CPA firm partner laments:

I rarely have any collection problem with MY clients BUT the other partners are always permitting clients to delay paying us. We have way too many accounts over 90 or 120 days. Some clients don’t pay us until we are ready to begin work on their account the following year!

We have never been able to establish a clear, long-term plan or vision for the firm that all partners can get behind. So, we have not focused on succession.

We have a fractured partner group. There is not enough collaboration and too much dissension between offices.

We need to get rid of some of our clients. My clients are fine but my partners hang on to some very unprofitable, troublesome, slow-paying clients.

We are having an increased amount of turnover and need to give more attention to retention.

Do any of these sound familiar? It’s time to stop lamenting and start doing something about the issues. One of the biggest roadblocks is communication. Bringing more open and honest conversations into your partner meetings is the first step.

Do You Have Any Sacred Cows?

I have worked through many merger negotiations, several as managing partner of my own firm, and even more during consulting engagements.

As an acquirer, there is one question I have always asked. I suggest that you should ask the same question as you approach any merger/acquisition situation.

Here’s the question: Do you have any sacred cows?

A “sacred cow” can be described as one that is often unreasonably immune from criticism or opposition. Someone or something that has been accepted or respected for a long time and that people are afraid or unwilling to criticize or question.

Often the topic of sacred cows does not come up when the two firms are in the discussion stage. However, if not talked about up front the sacred cow situation will undoubtedly surface once the two firms are living together. It is also wise for the firm being acquired to ask the same question of the acquirer.

Most often the situation is a long-time employee that cannot be terminated (for any reason). Sometimes, it is even a partner whose performance hasn’t been up to par for years.

Another example is software. I have heard many firm leaders say, “We will not change our tax package.” To me, that is a deal breaker. For optimum efficiency, the entire firm should be using the same software packages. Develop the entire technology plan (hardware and software) up front and document how the conversion will be implemented.

Before you sign on the dotted line, be sure you can live with the sacred cows.

Guidelines For Strategic Planning Meetings

I facilitate a lot of partner retreats. Yes, it is often like herding cats.

I find that some firms are disciplined about their retreats. They have 100% attendance, they stay focused on the agenda topics and everyone participates. I also find that some firms struggle with these concepts.

If you are planning a strategic planning session this year, here are a few reminders:

Set the strategic planning meeting or retreat dates with plenty of advance notice and get a firm commitment from stakeholders to attend.

Plan the agenda carefully to make sure you are using the time wisely.

Send out the agenda and other special reading well before the meeting date so that attendees can be informed and prepared.

Expectations matter. Clarify expectations in advance of the meeting and again at the start of the session.

Logistic details are very important. Make sure everything is in place and confirmed so that valuable time is not wasted.

Begin and end on time. If a topic needs further discussion, ask permission to extend the discussion time.

After the session, summarize the discussions and document action items. Send these to participants in a timely manner.

The most important step…. don’t procrastinate with implementation of the agreed upon action steps.




What Do You Want To Be Famous For?

When I am coaching managing partners, I often go to some of the lessons I learned from David Maister. If you don’t know of David Maister, I urge you to visit his website and read his bio and some of his articles.

Until his retirement in 2009, David Maister was widely acknowledged as one of the world’s leading authorities on the management of professional service firms (such as law, accounting, and consulting firms, and companies providing engineering, advertising and executive search services).

For three decades he advised the top firms in these professions, around the world, covering all strategic and managerial issues.

He is the author of the bestselling books:

  • Managing the Professional Service Firm (1993),
  • True Professionalism (1997),
  • The Trusted Advisor (2000),
  • Practice What You Preach (2001),
  • First Among Equals (2002),
  • Strategy and the Fat Smoker (2008).

At my firm, we gave True Professionalism to every new accounting graduate and asked them to read the first two chapters right away and the rest at their leisure.

Maister would often talk about, “What do you want to be famous for? What’s going to make you distinctive?” He had a great story about how he was asked that question when he was a new professor at Harvard. Of course, he was stumped at first but his mentor asked him to think about it and respond in a few days. He more or less blundered into professional service firms and the rest is history.

As you work with your partners, to coach them to more success, try asking them what they want to be famous for.

Here are some David Maister examples:

What Do You Want To Be Famous For?

(What’s going to make you distinctive?)

Intellectual thought leader in a particular service area

Industry expert

Superior client counseling skills

Special abilities in practice development

Special ability to work with certain types of clients (such as, entrepreneurs, high net worth individuals, etc.)

Superior ability to transfer skills to others

The Meaning Of Marketing

In the world of public accounting, when we say the word “marketing” different professionals and different generations can view it in many different ways.

To some partners it means keeping their current clients happy. Others will argue that a constant flow of new clients keeps the firm healthy and growing. And, still others will say that marketing means being visible and active in the local business community.

All of these viewpoints are accurate. I learned much about marketing from the writings of David Maister (retired consultant guru to professional service firms). Maister said that professional firms must execute a FULL PACKAGE of practice development steps covering five main categories of activity:

Broadcasting. It includes all the activities that generate leads and opportunities with new clients.Think of webinars, articles, blogs, social media, newsletters and speaking.

Courting. When you do get a lead, it turns into courting. You are no longer addressing a group, your are addressing a specific prospect. When a client hires you, the client is entering into a relationship, so your activities are better described as courtship.

Super-Pleasing. The easiest marketing is super-pleasing your current clients. Word of mouth is very powerful and a client will only talk about you if the client is truly delighted and eager to work with the individuals inside your firm.

Nurturing. Sometimes when we are focused on pursuing NEW business we might forget about current clients. For relationships to remain strong, they must be nurtured (just like a marriage).

Listening. To round out your marketing (or practice growth, as they call it now) activities, you must listen to the market and continually gather market intelligence. The better you understand how your clients think, the better you are able to serve them. Don’t guess or assume what your clients want, ask them and LISTEN.

Managing Partner d.b.a. Partner Coach – Chapter 2

As mentioned last week, an important duty of the managing partner is to help the other partners set goals and accomplish them.

When identifying goals for individual partners be sure they are goals and not just what I call hygiene items. These items are just like brushing your teeth in the morning – you just need to do it and you really shouldn’t be rewarded for it.

Your firm should have minimum expectations for partners that include things like recording your time, doing your billings, collecting your receivables, etc. They are not goals. Partners should be impact players and their goals should have a high impact on the firm’s success.

Managing Partner d.b.a. Partner Coach – Chapter 1

For a CPA firm managing partner, coaching and mentoring the other partners is a key part of the managing partner’s responsibilities. Partner goal-setting is part of that process.

Any one-on-one time between the MP and another partner can be a powerful tool in creating a one-firm culture and bringing more consistency to the roles of the individual partners.

One aspect of coaching partners is the process of partner goal-setting. In the next few weeks, I will address the various aspects of partner goal-setting on this blog.

The managing partner must be committed. Coaching and mentoring the firm’s partners is one of the most important if not the most important responsibility of your managing partner. Depending on the size of your firm, the managing partner may personally do it or get others involved.

The goal setting process is a joint operation. The MP schedules a time to down with each of the individual partners and together they come up with the goals. Equally important is the involvement of the MP in follow up meetings to discuss progress. A good rule of thumb is that you need to have a dialogue every sixty days or so.

The biggest reason why goal setting programs fail is lack of follow up by firm leadership. Once the goals are established it is up to the MP to be the accountability czar.


Partner Retreat Facilitation Process

February 22, 2016GaryRetreats0

Hopefully, you have your partner retreat date and place already reserved. I also hope that you have secured your experienced retreat facilitator.

When I was managing a growing firm, I always strongly recommended to my partners that we invest in a professional facilitator with experience in the CPA profession. It allowed me to be a true participant in the retreat and not be distracted with keeping the discussions on topic.

During my years as an active managing partner, I also facilitated retreats for several other firms. Now, retreats are a major focus of my consulting practice and something I thoroughly enjoy doing.

Here is the Adamson Advisory Retreat Approach:

  1. Our process includes a partner survey before the retreat and partner interviews.
  2. We make sure the key issues are on the agenda.
  3. We create the atmosphere and level playing field to encourage the unsaid to be said.
  4. We help you navigate through the tough issues and conversations.
  5. We help you find consensus but not for a watered-down result.
  6. We end with a prioritized action plan with assignments and due dates. We will encourage you not to over-commit.
  7. We will follow up with you at the one month and three month marks after the retreat to see how you’re doing and help your implementation.

If you haven’t booked your 2016 facilitator, contact me to talk about your situation and my process.

Everyone Needs A Mentor – Even Partners

February 15, 2016GaryUncategorized0

I view the role of the managing partner in a CPA firm as a mentoring role. Managing partners are certainly a role model for the younger staff but they must also be a mentor and coach to the other partners. Holding them accountable to their goals, assisting them with bringing in new business and asking them to continually improve their skills is a major part of the everyday activities of a managing partner.

By the time a CPA reaches the level of managing partner, they have no doubt developed the skills and talents that enable them to be an effective leader.

In their early years as a staff person, they most likely had role models, mentors, coaches, managers and firm partners to help them grow in their expertise and technical skills.

Now, they are the boss and probably do not seek out as much coaching and skill development activities that happened as they climbed the career ladder. They may even have an outside paid mentor to confide in and ask for assistance and guidance. However, that person does not truly know what goes on when the managing partner is at work every day.

Managing partners, why not seek out a junior coach inside your own firm? Who actually observes your behavior on a regular basis and will tell you things you don’t want to hear?

Upward feedback surveys for the entire partner group is a healthy exercise. If you haven’t done one in a few years, you should. But, for the managing partner, here is a simple exercise.

Pick 5 or 6 people at your firm, not partners, subordinates. Interview them and ask: What advice would you offer to help me improve my effectiveness? Please give me one or two specific and actionable suggestions. I would appreciate your advice. Then listen.

This exercise might seem awkward at first but keep it up. Pick 5 or 6 different people later in the year and do the same personal interviews. Then next year do it again, once or twice. As Ken Blanchard says, “Feedback is the breakfast of champions”.

Read more about this topic here.

Too Many Firms Are Still Top Heavy

Although many firms are doing a good job with transitioning long-time partners into retirement, a large number of firms are still dealing with top heaviness. These firms have continually brought people into the partner ranks because they are good technicians or because the older partners did not want to lose a manager who had many close relationships with a significant number of clients.

Firms also have a history of promoting people to manager just because they don’t want to lose them. What eventually happens is that the firm becomes top heavy. There are way too many partners and managers and too few staff.

Then a common scenario evolves where partners are doing manager work, managers are doing staff work and staff are looking for work.

Because the firm is top heavy, younger accountants, with great potential, get discouraged and leave the firm. Headhunters are calling them regularly and it is very easy to get a great deal at another firm in your market.

Read my full article on how to begin the journey in prioritizing and tackling the top heaviness inside your firm.