retirement

how 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

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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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and why a five-year term is ideal.

by bill reeb and dominic cingoranelli

often, firms elect a managing partner with a majority vote, but to dismiss a managing partner within their elected term requires a higher vote, commonly two-thirds of the equity vote. in some larger firms, the people running for managing partner might not be eligible to vote in this process, but in many others, everyone can vote.

more on performance management: 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

the reason why everyone should be allowed to vote is simply that the smaller the firm, the more likely that removing the candidates being considered for the position puts too much control in the minority ownership of the firm. for example, consider the following six-partner firm scenario:
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why managing partners need to be accountable.

by bill reeb and dominic cingoranelli

as we have said so many times before, everyone likes the idea that “i” will hold “me” accountable. but few like the idea of “anyone else” holding “them” accountable.

more on performance management: the job of managing partner: empowered or emasculated? | partners as role models: the good, bad & ugly | managing the managing partner | pay varies when performance varies | accountability is for everyone | who decides what? | cpa firm performance assessments: 15 core competencies, 21 questions

so, once it is decided that accountability is important and someone needs to be responsible for implementation, the discussion quickly shifts to “let’s form a group of people, like an executive committee or a compensation committee to hold us accountable.”
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why eat-what-you-kill firm cultures produce weak ceos.

by bill reeb and dominic cingoranelli

let’s review some best practices as to how the managing partner is elected, what is expected, for what term and how he or she is protected if removed from that role.

more on performance management: how to monitor goal progress | 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)

the job differs whether it is being filled under the eat what you kill (ewyk) or building a village (bav) models. for example, under the ewyk model, the managing partner is likely the largest equity partner, or if not, then the default would be that the role of the managing partner would be that of administrative partner.  because the ewyk model is usually a silo model built around superstars, the managing partner’s role is to handle all of the matters that the other partners don’t want to do.  it is not uncommon in these scenarios that the managing partner earns a stipend to fill that position, and that the stipend is not very much (maybe $25,000 to $75,000 a year).

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accountability and reviews are more important at higher levels, not less.

by bill reeb and dominic cingoranelli

evaluation of performance and goal achievement is something done that should be performed multiple times during the year. unfortunately, many cpas tend to think of management as a waste of time, and evaluations as purely a human resources requirement created by the government to protect employees to the disadvantage of the organization.

more on performance management: how to implement strategy, step by step | 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

well, that is one way to look at it. but we think it’s the wrong way.
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you need to ponder some questions before you answer.

by bill reeb and dominic cingoranelli
卡塔尔世界杯常规比赛时间 / succession institute

everywhere you turn, you overhear someone talking about, being asked about the status of, or referring to their need to develop, a succession plan.

more on performance management: how retired partners are robbing their own firms | how involved should retired owners be? | how to find a partner’s replacement | action plans for transitioning partners | how retirement issues affect succession planning | succession: the questions to care about | 7 succession questions to ignore for now | cpa firm performance assessments: 15 core competencies, 21 questions

as a matter of fact, for the past 12 years through surveys with the aicpa, we have been asking firms to share with us whether or not they have a succession plan in place.

when you consider the responses to this question from the pcps succession institute succession management surveys conducted in 2008 and 2012, clearly more and more firms are:

• getting their act together,
• documenting their succession management strategy and
• thinking through the ramifications of retiring one or more senior owners.

here is the question we asked along with summary data from both surveys: read more →