the skill in producing financial reports is limited by the quality of the information presented to the cpa by the client. motivation of the client to influence that financial information comes in many forms, some intentional and some unintentional. competence comes first in being able to resist pressure and present a true and accurate position of the client’s organization.
twenty to thirty percent of all accounting firm partnership agreements have no provision for goodwill-based retirement payments to partners departing due to death, disability, retirement or withdrawal.
staffers aspiring to be partners must learn the key characteristics of successful partners. they also must learn how to develop their own personal plans to achieve partnership. firms and staffers alike need a clear set of procedures, processes and milestones for turning top talent into the next generation of firm leadership.
there are seven critically important criteria by which partners assess partners-to-be. i call them:
editor’s note: with this article, 卡塔尔世界杯常规比赛时间 introduces a new series of articles by martin bissett reporting on the findings of his proprietary research into the keys to making partner. the research is based on hundreds of interviews with partners and practitioners at more than 30 firms in the u.s. and the u.k., dozens of experts and advisors, and his own 20 years of experience in the field. in his research, bissett uncovered a wide gap between what partners say they seek in a staffer yearning to be partner and what they actually do and say to train and nurture the staffer. his work in passport to partnership is dedicated to bridging that gap, revealing to both partners and partners-to-be the unspoken rules, and working to create a bulletproof program to guide their efforts.
have you ever wondered what the partners of your firm are looking for from you, beyond your technical abilities?
for full disclosure, i am not an accountant, but i have spent decades working with accounting firms of all shapes and sizes in the united kingdom, the united states and europe.
i noticed over time that in many firms, partners may often regard one or more of their managers as not being “partner material” because they feel that the manager does not exhibit the traits they are looking for.
most multi-partner cpa firms have partner buyout plans that enable partners who leave the firm via retirement, death, disability or withdrawal to redeem their share of the firm’s value.
over the last 10-20 years, retirement plans have come under more scrutiny as younger partners question whether departing partners are worth the payments due them and whether the firm can afford those payments. staff with near-term partner potential also question whether to commit themselves to making these payments. both of these groups fear that the firm will not be able to survive the retirement of dynamic, rainmaking partners who have tight relationships with their clients.
let’s take a moment to simply summarize the many critical aspects of a well written partner retirement/buyout plan.
at first glance, those unfamiliar with how a proper plan should be written may find the 20-plus key provisions listed below to be daunting. but i would caution against such thinking. in my 20 years of consulting to cpa firms in this area, i have been asked to resolve messy disputes regarding every item listed below.
one of the biggest items of contention is the valuation of their goodwill for internal retirement purposes. in these cases, the partners are anxious about obligating themselves to pay huge buyout benefits.
a non-compete covenant prohibits departed partners from joining another cpa firm or creating their own firm within a radius of a specified number of miles from the firm, within a specified period of time after their departure.
increasingly, firms are writing and enforcing tougher and tighter non-compete clauses.
one of the key tests that courts have used in ruling on the enforceability of non-compete agreements (different from non-solicitation) is the extent to which such agreements prevent the departing partner from earning a living.
the vast majority of u.s firms are local practices located in areas with many competing firms. if a partner leaves to join another firm and does not attempt to take clients, it is very difficult to claim that the departing partner will substantially and irreparably damage the interests and the value of the firm.
but the handling of issues related to death – for all parties concerned – are more straightforward, both personally and financially, than in the case of a disability. read more →
issues related to the death of a partner should be addressed in the firm’s partner agreement. consider the following:
does the firm wish to accelerate vesting in any manner? does the firm wish to accelerate the payment frequency, vesting or both? partners are often tempted to be generous out of sympathy for the deceased partner’s family. what stops them from acting on this generosity impulse is the cold reality of how expensive this is. as a result, most firms treat death the same as an ordinary retirement.
what must be done to assign the deceased partner’s clients to other firm members and to retain the clients?
to what extent does the firm want to purchase life insurance on the lives of some or all of the partners? if they opt to purchase the insurance:
by marc rosenberg
