mergers & acquisitions

the limitations of rainmakers

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young man under rain-covered umbrellawhy marketing has to permeate the firm and the process.

by bill reeb and dominic cingoranelli

for most firms, new business comes in through referral. therefore, the bigger a partner’s client base, the more likely that partner will bring in new business – which simply means that the more clients a partner knows, the more referrals that partner is likely to receive (not in percentage, but in raw numbers).

more on performance management: different roles for different partners | dealing with a-d clients (you know who we mean) | how small ‘books’ hurt firms | why the partner agreement matters | merging for the wrong reasons | how to implement strategy, step by step | accountability requires clear expectations | how retirement issues affect succession planning | how partner ratings factor into equity
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other drivers of referral success are long-standing service (seniority) and position in the firm (such being one of the named or senior partners). in these cases, there is an extended opportunity for referral simply because:
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different roles for different partners

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image of charts in foreground and business partners in backgroundsome people should stick to technical roles, but there’s an impact on profitability.

by bill reeb and dominic cingoranelli

when you are a client relationship partner, regardless of your technical specialty, you take on the role of being that client’s general contractor for professional services – that is, his or her most trusted business advisor.

more on performance management: dealing with a-d clients (you know who we mean) | firms only grow when partners play their roles | the four basic parts of cpa firm partner agreements | younger partners see succession differently | how to compensate your managing partner | the job of managing partner: empowered or emasculated? | how the best managing partners turn ideas into reality
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if you are unwilling to fulfill this role, then you shouldn’t be a client relationship manager; you should be a technical partner. we define these two roles broadly as follows:
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firms only grow when partners play their roles

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money tree growing in the middle of green meadowhow often are you seeing your clients?

by bill reeb and dominic cingoranelli

whether you simply desire to improve your firm’s operations, or identify and implement a new long-term strategy, you need to be clear about the role that the owner(s), partners or shareholders should be playing in your firm.

more on performance management: how big ‘books’ hurt firms | how small ‘books’ hurt firms | why the partner agreement matters | merging for the wrong reasons | accountability includes partners | 7 succession questions to ignore for now | develop your employees or suffer the consequences
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the roles and responsibilities we’ve suggested are based on the best practices we’ve had the opportunity to observe and be involved with in our work with cpa firms throughout north america.
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how big ‘books’ hurt firms

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young businessman with forehead resting on handsthe invisible hazards of book of business.

by bill reeb and dominic cingoranelli

as we stated in our last column, balancing “book of business” is one of the largest stumbling blocks for cpa firms.

more on performance management: how small ‘books’ hurt firms | the four basic parts of cpa firm partner agreements | younger partners see succession differently | how to compensate your managing partner | the job of managing partner: empowered or emasculated? | how the best managing partners turn ideas into reality | make accountability a process | accountability requires clear expectations | base retirement on today’s operations | how involved should retired owners be? | how to find a partner’s replacement
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it is difficult to resolve because it is symptomatic, for most firms, of some real trouble brewing.
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how small ‘books’ hurt firms

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businessman sitting at desk, looking forward and smilingleverage, capacity and overservice are just some of the issues.

by bill reeb and dominic cingoranelli

balancing “book of business” is one of the largest stumbling blocks for cpa firms. it is difficult to resolve because it is symptomatic, for most firms, of some real trouble brewing.

more on performance management: the four basic parts of cpa firm partner agreements | developing a three-year vision [video] | mps: how to elect them … and fire them | managing the managing partner | accountability is for everyone | firms say what would change retirement pay | how retirement issues affect succession planning | develop your employees or suffer the consequences | job 1 for the practice owner: client management
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

optimal book size

the optimum condition for firms to flourish is for books of business to be balanced throughout the firm. from the largest book to the smallest, the percentage gap between them should be fairly small (about 20-25 percent or less than a couple hundred thousand in fees).
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when partners leave: what to do today, to be prepared for tomorrow

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man taking medication from caretakerset policies now based on business, not emotion.

by bill reeb and dominic cingoranelli

let’s review departure/termination policies.

more on performance management: the four basic parts of cpa firm partner agreements | developing a three-year vision [video] | mps: how to elect them … and fire them | firms say what would change retirement pay | action plans for transitioning partners | how retirement issues affect succession planning
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these may include:
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the four basic parts of cpa firm partner agreements

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time to retire clock faceit’s complicated. but proper policies ease buyouts and transitions.

by bill reeb and dominic cingoranelli

here is a list of common policies regarding partner/shareholder agreements that we cover with our firms, as well as some common issues that are important to address in the policies.

more on performance management: developing a three-year vision [video] | why the partner agreement matters | younger partners see succession differently | how to compensate your managing partner | the job of managing partner: empowered or emasculated? | how the best managing partners turn ideas into reality | how retired partners are robbing their own firms | action plans for transitioning partners | how retirement issues affect succession planning | develop your employees or suffer the consequences
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the sop (standard operating policy) categories are:
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why the partner agreement matters

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illuminated glass pyramid at the louvre, paris at nightmany agreements have long outlived a reasonable foundation for the firm’s current success level and size.

by bill reeb and dominic cingoranelli

most of the time when we are called in to work with firms, it is to help them plan for or implement significant change. the dialogue may start out with a general firm retreat, or it might simply be a session devoted to solving a few specific problems.

more on performance management: younger partners see succession differently | how to compensate your managing partner | the job of managing partner: empowered or emasculated? | how the best managing partners turn ideas into reality | make accountability a process | accountability requires clear expectations | base retirement on today’s operations

goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

visionary firms are always looking to make changes long before their operating environment forces them to, from enhancing their ability to compete, making changes to improve profitability, building infrastructure to support succession, upgrading their people development, modifying the compensation process, increasing revenues and more.
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four problems that prompt mergers

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six businesspeople in meeting around tableand three ways you win by tackling them now.

by bill reeb and dominic cingoranelli

when firms first start considering the idea to merge into a larger firm, they do it with the intent to solve a problem. common problems distressing enough to motivate this transaction are:

more on performance management: younger partners see succession differently | more merger questions than you imagined | mps: how to elect them … and fire them | partners as role models: the good, bad & ugly | managing the managing partner | pay varies when performance varies | accountability is for everyone | who decides what? | firms say what would change retirement pay | action plans for transitioning partners | how retirement issues affect succession planning

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  • leadership: not enough future partners on the ground or in a near-future pipeline to be able to take over and retain the client relationships of the retiring partners while simultaneously continuing to nurture and develop new clients. this concern tends to be expressed frequently by senior partners when they share their discomfort with the level of risk they are accepting regarding their future buyout.

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younger partners see succession differently

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young woman driving a carare you acting like an owner or an employee?

by bill reeb and dominic cingoranelli

several of our younger partner readers have posed a couple of questions to us on the topic of mergers, as well as succession in general.

more on performance management: more merger questions than you imagined | merging for the wrong reasons | why accountability falls to mps | how to implement strategy, step by step | how to decide who decides pay | accountability includes partners | succession plan requirements | how retired partners are robbing their own firms | 4 ways to create more capacity | partner retirement and the war for clients | succession: the questions to care about | hazards of not reallocating equity | cpa firm performance assessments: 15 core competencies, 21 questions | 5 harmful management attitudes (and how to fix them)

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at the end of the day, remember that just because junior and senior partners may be in different positions, have diverse perspectives and at times, opposite expectations, that doesn’t necessarily mean that you can’t find resolution in the same solutions. so, let’s pick up with a question/comment or two.
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more merger questions than you imagined

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business group of two women and two men shaking handsthere’s a lot to consider whether merging up, down or laterally.

by bill reeb and dominic cingoranelli

although we find that an internal ownership transition often can be your best bet, a merger makes sense in many cases. so, if this is the direction you are heading, we’ve highlighted some of the issues below that we think you ought to consider, with the first one being to really take a close and hard look at the compatibility of the organizations courting each other.

more on performance management: how to compensate your managing partner | the job of managing partner: empowered or emasculated? | how the best managing partners turn ideas into reality | make accountability a process | accountability requires clear expectations | base retirement on today’s operations

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who is a likely candidate for a merger?

if you are going to consider a merger, which firms would seemingly be a good fit for your practice – i.e., your clients and your employees and if, applicable, partners?  the better the fit, the more likely you will be able to retain clients and employees, and the greater the chance for overall success of the merged firms.
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merging for all the wrong reasons

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jigsaw puzzle with pieces missing and word "incomplete" in gapfirst: get your house in order; don’t expect someone else to do it for you.

by bill reeb and dominic cingoranelli

for at least the past 10 years, the merger market among cpa firms has been pretty active. while the market volume has waxed and waned a little several times during this period, mergers have been a topic in almost every strategic planning retreat we have facilitated.

more on performance management: how to compensate your managing partner | mps: how to elect them … and fire them | partners as role models: the good, bad & ugly | managing the managing partner | pay varies when performance varies | accountability is for everyone | who decides what?

 

goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

 

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paying the managing partner: today’s trends and best practices

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businesswoman holding giant dollar symbolhow firms are balancing base salaries against billable hours.

by bill reeb and dominic cingoranelli

the managing partner should have a compensation plan unique to that position focused on carrying out the strategic and tactical objectives of the firm.

more on performance management: how to elect a managing partner … and how to fire them | why accountability falls to managing partners | how to implement strategy, step by step | how to decide who decides pay | accountability includes partners | succession plan requirements | how retired partners are robbing their own firms | 4 ways to create more capacity | partner retirement and the war for clients | succession: the questions to care about | hazards of not reallocating equity

goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

while there can be some individual performance goals assessed, the bulk of the managing partner’s incentive package and focus should be on overall firm performance. the key here is that you don’t want an incentive system for the managing partner that is overly focused on individual goals because the real value of this position is in driving firmwide change.
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