Adamson Advisory


Steady as she goes” is something you might have heard growing up. We don’t hear the term used much any longer. Steady as she goes is an order for a helmsman to keep a ship’s current course.

I think it also applies to CPA firm leadership. During my many years inside a CPA firm and consulting with many other CPA firms, I have seen many interesting styles of leadership from managing partners.

Some managing partners are dictators, benevolent dictators, collaborators, delegators, know-it-alls, consensus builders, and even radicals. Some are very strong and some are wimps.

When it is time to appoint a new managing partner, beware of inconsistency and go with steady and dependable. I remember one firm that had a choice of two partners to take the role of managing partner as the current managing partner moved into retirement.

One was a great rainmaker, very involved in the community and great at client service. He was always quick to take action; however, he could be described as hot and cold. You never knew which personality you would be dealing with on any given day.

The other candidate had similar positive characteristics but he was steady, consistent and dependable. He was always easy to talk to and sought out feedback from everyone in the firm. He was confident but careful. He demonstrated the same demeanor day in and day out.

I guess you know which one was selected to be the firm’s next managing partner.


It’s The Time of Year to Plan Your 2017 Budget. What About CPE?

Whether you have a very large firm or a very small firm, how you spend your CPE (Continuing Professional Education) budget is something that takes thought and planning. It is a very important activity inside your firm.

Of course, you need to focus on developing the technical skills of your employees, especially the beginners. CPA firms focus on the various “level” training courses for their one, two and three-year team members. Staff level training is offered by state societies and other vendors and is a great benefit to those beginning their careers in public accounting.

After that initial investment, further expenditures for the benefit of staff seems to decline. Dollars are allocated on keeping up with audit and tax issues but not so much for supervisory, management and leadership training. Firms tend to procrastinate on these very important skills that could mean success for the firm in the future.

Many firms hand out titles without the education and training to back it up. In many cases, CPA firm managers have no clue how to manage. They were given the title because of technical expertise and longevity. Maybe a supervisor is encouraged to attend a one-day “supervisory” training course like the ones offered by vendors across the country, not specifically for the CPA profession. Often, it doesn’t go any further than that.

If you send some of your people to the well-known CPA leadership training courses, I urge you to seriously evaluate the effectiveness of the course. After your people complete a leadership course, monitor their progress. Initially, they are excited about the whole experience but does it last? Do they demonstrate the leadership skills they learned or did they attend leadership training just to promote their personal career?

As you prepare your CPE plan for the coming year, balance the technical with the career-enhancing skills and then monitor the performance of the individuals as they build on what they have learned.

Leadership in a CPA firm means being able to get diverse individuals to work together as a team to achieve a common goal. It means that your CPA team will out-perform the competition. To get there you must be generous with your CPE budget. It’s an investment in the future of your firm.

Doing The Right Work

We are seeing a transition right now. More and more firms are finally making the switch from the long-time, baby boomer managing partner to a younger, less experienced managing partner.

It is a very difficult time for both of the people involved, and the firm, in general.

The outgoing MP struggles with relevancy and a long list of other important decisions about what to do with their remaining working years. But don’t ignore the challenges being faced by the new guy/gal.

One thing to remember is, as the managing partner of a growing, profitable firm, it is important to always be thinking of how you are spending your time.

One dilemma the new managing partner faces is how much time to continue to spend on client work and how much time do they really need to devote to actually managing the firm.

The MP should definitely keep a reasonable amount of client service work. How much varies. Much of this decision relates to the size of the firm.

Smaller firms require less management time and the MP should utilize a qualified office manager. Midsize and larger firms, of course, should have a professional firm administrator or COO who handles all administration and daily operations so that the managing partner can focus on coaching the other partners, being the community face and voice of the firm, and bringing new business to the firm.

For all firm partners, it is important to always focus on the important work. For line partners that means client relationships, nurturing team members and bringing new business to the firm.

Partners should not be doing manager work. Managers should not be doing senior and staff work. And, seniors and staff should not be looking for work.

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

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.


Building Your Bench for Succession – A Few Ideas to Help You

Thousands of firms are working through the succession and retirement of senior partners and deciding along the way whether or not they can pull it off internally and stay independent. The single most important factor for success is what we see when we look over our shoulder – is the bench of people there to succeed us? Here are some ideas to recruit and keep employees on your team:

• Make recruiting a constant effort in your firm meaning that you are always looking for people, not just when someone leaves. If you make the commitment to hire more than you need another very healthy thing will likely happen – you will actually be able to make choices and outplace the weaker players, strengthening the team along the way.

• Firms having the best success building their bench almost always have a commitment to grow their own. That means a commitment to a campus recruiting process and not being afraid to compete with the larger firms.

• Create an internship program in your firm. It is a tremendous way to get a test drive before you actually hire someone.

• Make sure that you have a staff bonus program for recruiting experienced people. You want your team talking to friends about how great it is to work for you and with some skin in the game, they will be more inclined to send you quality candidates.

• Do a better job in defining your position descriptions and what it takes to advance to the next level in your firm.

• Make it clear what the career progression is in your firm and what the ladder looks like. It is important that everyone else in the firm knows who is on the partner track and who is not. You will lose younger “stars” who want to move up if they think the ladder is clogged by too many people above them.

• The college grads that you are hiring today want to be “a part of it”. Short of putting new hires on the Executive Committee, there are things that you can do to make your people feel more engaged. Here are a few examples:

1. Find opportunities to talk about your mission and vision often and how the firm’s actions and direction are consistent with them.

2. Put young people on task forces and committees of the firm. Better yet, form an Inclusion Committee to get their ideas on how the firm can improve communications with and involvement of the team.

3. Create opportunities to communicate with the team especially from the firm’s management/leadership group. For example, meet with your manager group after partner meetings to keep them informed; hold an open forum lunch for staff with your managing partner a couple of times a year.

Building your bench is a big job and it involves several different fronts. For smaller firms it is much more difficult to devote the resources to get it done. With that said, it is the answer to perpetuating your firm and accomplishing internal succession. Read the full story on this topic here.

Admitting New Partners – Succession Best Practices

January 23, 2014GarySuccession Planning0

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.

Cover These Bases For Every Retiring Partner in Succession Planning

October 31, 2013GarySuccession Planning0

Every firm is working through the succession maze and dealing with the exit of key partners in the firm. These partners leave holes in the firm that we have to fill. We need to recognize that our plans to fill them will be different depending on the role that the individual partner plays in the firm. With that said, there are four areas that you must cover for every partner. And each one deserves a plan of its own. They are:

Technical Skills and Expertise – Remember to focus on shoring up both service and industry knowledge for the firm.

Leadership – Leadership transition is one of the most difficult succession issues facing firms. Take a look at an article on my website for some ideas for the M.P. spot: Managing Partner 101 – Just What Exactly is the Job?

Hours – Because we need to move a particular client relationship, that doesn’t mean that we also have to replicate and move all of the partner hours intact to one individual. Make it a focus to leverage preparation and review time if you can.

Client Relationships – The client transition plan needs to be orchestrated over at least two years, it needs to be written and it needs to be supervised and managed by the firm’s managing partner. For the close personal relationships which are always the toughest to transition, you should plan on shadowing for at least two year-end cycles.

The retirements that we are just beginning to focus on are key to the future of our firms. Covering these bases will give you a better shot at a successful outcome. Read my full article on Succession – Cover These Bases for Every Retiring Partner.