3 ways firms scare off successors
and 7 steps to making ownership attractive to new leaders.
by terrence e. putney
bridging the gap
succession & retirement
stern advice: local practitioner, endangered species? [video]
the road to extinction.
when the inmates are running the asylum
crazy doesn’t get better by adding more crazy.
by dom cingoranelli
“we can’t really enforce this because we don’t want to risk having him (or her) quit.”
i can’t tell you how many times we hear something to this effect when we talk with cpas. we hear this at small firms and we hear it at large firms. we hear it from partners, from directors, and from managers. it doesn’t matter what size firm they’re in, nor does it matter what level or position they hold.
it’s always the same line. it reminds me of the old adage, “the inmates are running the asylum.” and, it raises the question of who actually is running the firm. who’s in charge?
the two most common management styles
do cpa firms need management or leadership?
by bill reeb and dominic cingoranelli
let’s start out with a straightforward question. what is the difference between management and leadership?
more on performance management: 8 ways to manage clients | the limitations of rainmakers | 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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from one point of view, leadership is far different than management.
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8 ways to manage clients
this is job 1 for the practice owner.
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 owners, partners or shareholders should be playing in your firm.
more on performance management: the limitations of rainmakers | different roles for different partners | how big ‘books’ hurt firms | developing a three-year vision [video] | 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
to be sure, the roles and responsibilities of a cpa firm owner or owners will vary from firm to firm, based on that firm’s needs and circumstances, and you need to adapt any recommendations to fit your firm’s situation.
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the limitations of rainmakers
why 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
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
some 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
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
how 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
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
the 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
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
leverage, 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
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
set 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
these may include:
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the four basic parts of cpa firm partner agreements
it’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
the sop (standard operating policy) categories are:
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why the partner agreement matters
many 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
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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