So many managing partners readily confess that they have no documentation about how or when a partner should retire.
Others tell me that they have two or three (or more) partners who have “retired,” meaning they have relinquished their ownership but they continue to work as they always have and still collect a paycheck while being paid their “retirement” dollars. There is no policy that limits their involvement in serving clients.
As a managing partner, address the issues this year and work with your partners in making the commitment to a defined process.
An important aspect is to clearly define what an owner’s responsibility is to develop people that will be able to replace them, in case of emergency and when retirement occurs.
Define the obvious other issues:
- At what age, must a partner retire (relinquish their ownership)?
- When must a partner notify the firm of retirement? Two years out, three?
- Is there a penalty for lack of notice?
- Document the process for the transition of clients, step-by-step.
- What is the pay-out and what is the period of time for the payout?
There are many more important topics/questions your group will need to discuss and identify.
Be sure to assign responsibility for actually drafting the Partner Retirement Process. It doesn’t have to be the managing partner.
If you need assistance, contact me.
In the accounting profession, partners in public firms spend a lot of time deciding when and where to have their annual planning retreat. Then they begin to search for a facilitator and if they haven’t waited too long into the new year, they are able to book that amazing guy/gal that they have heard so much about.
The date arrives and the five or six partners (maybe more), are excited about discussing the major issues facing the firm. They are good about not getting stuck in the details about day-to-day operations and the ever-evolving drama surrounding personnel issues.
They go through the strategic planning steps, perhaps doing a SWOT analysis. They heed the guidance provided by the facilitator and determine where they should focus for the coming years. They leave the retreat on a high with a two or three-year plan in a rough draft format.
Leaders for each initiative are assigned and, then what?
That’s where I see the following Drucker quote come into play:
“Plans are only good intentions unless they immediately degenerate into hard work.” – Peter Drucker
Discussing, debating and ending with a plan is fun. In many firms, when the hard work appears on the horizon, complacency creeps in and the group ends up talking about the same issues the following year.
Over the last couple of decades, the role of a partner in a CPA firm has evolved from simply maintaining a significant book of business to a much broader leadership role.
If you are a partner, you should be a role model for the entire team. It’s no longer about being highly billable, working extremely long hours and maintaining a book of business.
Partners must now be willing to be held accountable for a variety of activities. In fact, not too many years ago, becoming a partner was viewed as being “let off the hook” for performance. You had it made! Those days are history and you must now expand your role and become future-ready.
Here is just a partial listing of what is expected of a partner. You must:
- Bring in a significant amount of new business.
- Generate additional business from current clients.
- Cross-sell the expertise of your other partners and associates.
- Be active in recruiting and retaining top talent.
- Be visible and active in your community.
- Serve as a mentor to less experienced CPAs and groom them for leadership as part of the firm’s succession plan.
- Develop, and be a champion of, new service offerings.
- Become known for being an “expert” at something!
- Serve, as needed, on the Executive or Compensation Committees.
- Free up time by delegating a significant portion of your billable work so that managers and other team members have the opportunity to learn and expand their own expertise.
Where can you improve? What more do you need to do? Use this list to help you identify and set personal goals for 2020 and beyond.
Tom Peters has been focusing on business management practices for decades. I enjoy reading his books and his articles and even reviewing his presentations that he makes available online.
One topic that hits true in the CPA profession is what Peters calls, Blinding Flashes of the Obvious (BFO). Here’s one I think applies to many firms:
Blinding Flashes of the Obvious (BFO) #1
If you (RELIGIOUSLY) help people—EVERY SINGLE PERSON, JUNIOR OR SENIOR, LIFER OR TEMP—grow and reach/exceed their perceived potential, then they, in turn, will bust their individual and collective butts to create great experiences for Clients—and the “bottom line” will get fatter and fatter and fatter.
(ANYBODY LISTENING?) (PEOPLE FIRST = MAXIMIZED PROFITABILITY. PERIOD.) (ANYBODY LISTENING?) (FYI: The “People FIRST” message is 10X more urgent than ever in the high-engagement “AGE OF SOCIAL BUSINESS.
There are many things that we KNOW, but over and over again, we fail to take action, we fail to implement, and/or we procrastinate. When you attended your last CPA management conference, I bet you thought… “I’ve heard all of this stuff before.” But, as OBVIOUS as it is, you haven’t taken any significant action on best practices that you learn.
I was recently re-reading some of David Maister’s material. In his book, Managing the Professional Service Firm. A story he tells about being sought out to give a keynote at an in-house event made me wonder how many firms (and the people within them) are living the firm’s published values.
Here’s the passage:
Most of the calls I receive about speaking to in-house company events are from companies that want a speech that is entertaining, informative, stimulating, or motivating. What they don’t seem to want is anything that specifically addresses the way they run their firms or the real-world changes they are really trying to make.
For example, I recently received an inquiry asking me to convey to the audience the importance of living up to the organization’s “sacred values” (including the need for collaboration). They wanted me to be inspiring.
However, when I asked if I could poll the audience as to how well the organization was currently performing on collaboration and what the current barriers to collaboration were, the organizers were terrified at the potential for disruption. I was not hired for that speech.
Here’s a link to an online article by Maister on the same topic.
I urge partners not to continue living in a world of denial when it comes to serious issues they must address. This applies to a serious issue in many firms, the need to “out-place” a partner.
One of the biggest challenges for managing partners, other partners, and firm administrators is to figure out how to design a partner compensation system that is effective, yet fair.
I hope you will join me on Wednesday as I discuss the most common compensation systems in use today and provide my perspective as a former managing partner of a top 200 firm. I will help you determine what is right for your firm and how a firm evolves from one system to the next as it grows. I will also give you some tips on setting up a performance-based system in your firm and how to align your compensation system to your firm’s strategic plan.
Wednesday – – September 4, 2019 – 1:00 to 1:50pm ET
The webinar is in conjunction with CPA Leadership Institute and is free to members. Become a member for only $49 and have access to all webinars.
Click here for more information and to register.
Sometimes, when I am involved in helping a firm begin and complete a merger endeavor, I end up facilitating the process for both sides of the merger. It happens more often than you might think and almost always streamlines the entire process.
I am very honored to have advised blumshapiro and Cowan Bolduc Doherty on their recent merger.
Here’s the story as reported by Accounting Today:
Top 100 Firm blumshapiro has expanded in Massachusetts by adding Cowan Bolduc Doherty, a firm based in North Andover, effective August 1.
The deal will add 20 professionals, including three partners, to blumshapiro. Financial terms were not disclosed. Blumshapiro, based in West Hartford, Connecticut, ranked 58th on Accounting Today’s 2019 list of the Top 100 Firms, with $83.4 million in annual revenue. The firm has approximately 60 partners and 450 employees.
The combination with CBD will expand blumshapiro’s footprint in Massachusetts to five offices. The North Andover office will join blumshapiro’s existing locations in Boston, Newton, Quincy and Worcester. Besides its West Hartford headquarters, blumshapiro also has offices in Shelton and Marlborough, Connecticut and Cranston, Rhode Island.
“CBD’s strong and well-respected team of auditing, accounting and tax experts — and their reputation for providing exceptional client service — greatly complements blumshapiro and further supports our commitment to provide our clients the personal level of service that has contributed to our firm’s success,” said blumshapiro CEO Joseph A. Kask in a statement.
CBD specializes in accounting, financial and tax due diligence, business financing, estate planning, individual tax preparation and planning, multi-state tax planning, business tax preparation and planning, and 401(k) audits.
“Since our founding in 1988, CBD has fostered strong relationships with our clients in northeastern Massachusetts,” stated CBD partner Stephen J. Doherty. “For more than 30 years we have embraced growth and change, and this merger with blumshapiro is a natural next step in providing our clients with more resources while maintaining the personalized commitment they have come to expect from CBD.”
Adamson Advisory LLC advised both firms on the merger. “This combination helps extend blumshapiro’s reach and leadership serving entrepreneurial clients in the Boston market,” stated CEO Gary Adamson. “Cowan Bolduc Doherty has been a leader serving the Boston market for many years and was attracted to blumshapiro because of their outstanding talent pool and extensive range of services focused on the middle market.”
The following, from Jon Gordon, says so much about life within a partner group in a CPA firm:
“Don’t get mad at the naysayers. Don’t hate the energy vampires. Instead, realize that without them you wouldn’t be as strong. If you never got sick you wouldn’t develop a strong immune system. Negative people make you more resilient, wiser and better.”
In your group, you probably have several positive, inspired, and passionate forward-thinkers, You also probably have a few of the naysayers. I hope that you do become stronger, as a firm, because you have developed a strong immune system.
I follow Jon Gordon on Twitter. I hope you do, too.
Inside CPA firms, we usually call the person holding the highest leadership position the Managing Partner. Have you considered if that title, in your firm, truly fits the position? Maybe you need to be a Leading Partner rather than a Managing Partner.
There is a big difference between managing and leading. When you think about your role at the firm, do you lead or manage? Maybe you don’t do a good job of either one.
Make sure your managers are managing and enlist all partners to be better leaders. Truthfully, most of your partners are managers or followers, not actually leaders.
Many CPA firm leaders become focused on doing what other firms are doing. Partners, COOs, firm administrators, IT managers and marketing directors go to conferences where they can learn something we call best practices. Then they return and try to convince the entire partner group to embrace these best practices.
The role of the Leader is not about copying from others. It is about identifying a direction for the firm, specific to your firm. That can’t happen if you are imitating someone else’s best practice. You are not leading, you are following.
Successful leaders create value and drive the firm toward something new. Many managing partners fall back on the usual solutions or quick fixes. They are reactive rather than proactive.
Leading Partners study their own firm, listen to everyone, and spend time simply thinking. They read extensively and not just tax and audit updates – they read current events and a wide variety of books and novels. Reading sparks ideas. So does listening to podcasts.
Leave the managing to your COO/Practice Manager. As of today, become the LP (leading partner) of your firm.
So many discussions have happened over the years on the topic of change for CPA firms. Most of these discussions have been focused on how to get partners, owners and/or shareholders to change. After all, if employees don’t see their leaders embracing change, why should they? Soon, the status quo becomes a way of life for many firms.
In the last couple of years, you have been saturated with articles, blog posts, webinars, tweets, and presentations stressing that you and your firm must change more rapidly than ever. Are you?
Change means discomfort and people fear discomfort. As leaders, you must push people through the discomfort until it becomes comfortable. And, it will.
Sean Glaze, of Great Results Teambuilding, tell us:
In fact, the first step in dealing with discomfort is fear.
People are first afraid of what makes them uncomfortable.
The second step is when people eventually become willing to experience discomfort.
The third step is when people become comfortable with the discomfort.
The final step is when people are excited by and crave discomfort. This is simply a sign that their zone lines have shifted, and they have established a much larger comfort zone than they previously enjoyed.
I’m not sure CPA partners will actually get excited and crave discomfort, but I do know that partners want what is best for their firm and just might realize that short term pain means long term gain.
Read this helpful article by Glaze, Why Discomfort is the Strongest Catalyst for Team Growth.