Most CPA firm partners ask the question a little bit differently. It goes something like: “We have X amount of revenue and Y number of partners, so how many chargeable hours should our managing partner have compared to the other partners?” And the next question usually is: “How big should the managing partner’s book of business be compared to the other partners”. If these two questions aren’t a topic of conversation among your partners, they probably should be.
First, it is much more important to make sure that you “manage” the managing partner’s charge hours than it is to manage the size of their book of business. Most managing partners that we work with continue to maintain relationships with key firm clients as their firms grow and their duties as the managing partner grow. Those clients typically stay in the managing partner’s book; but, they have to leverage the work differently than they used to and rely upon more involvement of other partners and staff to get the work done.
The much tougher metric to manage is the chargeable hours of your managing partner and the time that is left to run the firm. How do you know where those numbers should be? It truly is a function of the size and complexity of your firm. The problem is that we don’t adjust quickly enough as our firms grow and most managing partners are spending too little time leading and managing, and too much time serving clients.
This is not an exact science but you need to consciously bring down the hours as the firm grows. It won’t happen unless you plan for it. Most managing partners enjoy the client work, they’re good at it and are sometimes reluctant to give it up.
We see numbers all over the map depending on the firm and the makeup of the individual in the managing partner chair. Your goal should be to reduce the client service hours of your leader to free up time to serve what is your number one, most important client – the firm. Read the full story on this topic here.