{"id":54464,"date":"2018-05-10t06:01:35","date_gmt":"2018-05-10t10:01:35","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=54464"},"modified":"2018-05-24t08:37:19","modified_gmt":"2018-05-24t12:37:19","slug":"voting-isnt-big-deal","status":"publish","type":"post","link":"\/\/www.g005e.com\/2018\/05\/10\/voting-isnt-big-deal\/","title":{"rendered":"why voting isn’t such a big deal"},"content":{"rendered":"

\"overhead<\/a>what about non-equity partners?<\/strong><\/p>\n

by marc rosenberg<\/a><\/i><\/p>\n

voting is a highly overrated privilege of being a partner.<\/p>\n

more:<\/strong> why and how new partners buy in<\/a> | ownership percentage and capital accounts<\/a> | 5 key reasons to have a partner agreement<\/a>
\n\"goprocpa.com\"exclusively for pro members. <\/span><\/strong>log in here<\/a> or 2022世界杯足球排名 today<\/a>.<\/span><\/p><\/blockquote>\n

when you don\u2019t have a vote, it seems desirous and enviable. it appears to be a very special privilege enjoyed only by the firm\u2019s elite. having a vote is synonymous with ownership, power and prestige.
\n<\/p>\n

i want to be in the room where it happens, the room where it happens, the room where it happens\u2026<\/p><\/blockquote>\n

one of the great songs from the smash broadway musical “hamilton” offers a great example. a young alexander hamilton has made a great impression on many of the founding fathers (can you guess whom he has not<\/strong> impressed?) but he isn\u2019t satisfied with mere praise because his roles are supporting others and therefore secondary. what he really wants is to be \u201cin the room where it happens,\u201d the room where key decisions are being made. it\u2019s not really a vote he\u2019s after, but the opportunity to participate in the discussions of major issues and influence decisions about how the country is governed.<\/p>\n

when new cpa firm partners get their vote, they quickly see that it\u2019s not that big a deal. here\u2019s why:<\/p>\n

most firms rarely vote<\/strong><\/p>\n

that\u2019s right. incredible as it may seem, at most firms, when a decision is needed, the partners rarely take an official vote on the matter. why is this?<\/p>\n

    \n
  1. most firm decisions don\u2019t require a vote. in fact, the firm\u2019s partner agreement empowers various members of the management team \u2013 mainly the managing partner, the executive committee, the compensation committee and pics \u2013 to make these decisions on their own, without even a discussion of the full partner group.<\/li>\n<\/ol>\n

    examples of important decisions rarely voted on by the full partner group:<\/p>\n

      \n
    • determination of the services provided by the firm<\/li>\n
    • staff hiring and termination<\/li>\n
    • staff salary decisions<\/li>\n
    • personnel benefits<\/li>\n
    • appointment of pics and industry team leaders<\/li>\n
    • transfer of clients between partners<\/li>\n
    • approval of wip write-offs above a certain minimum<\/li>\n
    • client acceptance and retention, including credit holds<\/li>\n
    • insurance policy decisions<\/li>\n
    • setting of billing rates of all personnel, including partners<\/li>\n
    • technology decisions<\/li>\n
    • managing of the client transition process of departing partners<\/li>\n<\/ul>\n

      there are important nuances to understanding these issues and voting in general:<\/p>\n

        \n
      • a managing partner would be foolish to make these major decisions in a vacuum. mps should be seeking the advice and counsel of other management team members and other personnel knowledgeable about the areas in question.<\/li>\n
      • decisions more minor than those listed above should never be made by a vote of the partners, who should have more important ways to spend their time. minor decisions should be made by management, not the partner group.<\/li>\n
      • the common thread here: partners should not have the inalienable right (apologies to the authors of the declaration of independence) to vote or even be involved in every decision the firm makes. that\u2019s management\u2019s job.<\/li>\n<\/ul>\n
          \n
        1. when a decision needs to be made that isn\u2019t covered by #1 above, the partners of most firms prefer to discuss it and make a decision by consensus rather than taking a formal vote.<\/li>\n<\/ol>\n

          true story: a firm hired me to provide consulting on a project. i asked them what made them choose me. the mp responded, \u201cat a partner meeting, our seven partners debated whether to join a cpa firm association. we voted 5-2 to join the association. as a result, we decided not<\/strong> to join the association and to hire a consultant instead.\u201d even though their partner agreement provided for decisions by a majority vote, in practice they would make a decision only if the vote was unanimous. their definition of a consensus was a unanimous vote.<\/p>\n

            \n
          1. taking formal votes on an important matter creates a lot of anxiety. should every partner have the same weight behind his or her vote? if not, how should each partner\u2019s vote be weighted? there is no easy and fair way to address these questions.<\/li>\n
          2. weighting of votes usually disenfranchises the new partners as well as existing partners whose vote is low-weighted. these partners feel like their vote doesn\u2019t really count, which often leads them to fail to act like partners.<\/li>\n
          3. adding to the difficulty of #4, it\u2019s common for two or more partners whose votes are weighted heavily to vote together on many issues because of their long-standing relationship. this makes it virtually impossible for partners with opposing views to get the firm to enact their ideas.<\/li>\n<\/ol>\n

            important exceptions to \u201cpartners rarely vote\u201d<\/strong><\/p>\n

            a small number of extremely important decisions commonly require a formal vote. indeed, many firms\u2019 partner agreements require votes on these issues:<\/p>\n

              \n
            1. admitting a partner<\/li>\n
            2. expelling a partner<\/li>\n
            3. merging with other firms<\/li>\n
            4. making changes to the partner agreement<\/li>\n
            5. removing a managing partner<\/li>\n
            6. declaring a partner permanently disabled<\/li>\n
            7. making capital expenditures over a stated amount<\/li>\n
            8. entering into leases, mainly office leases, above a stated amount<\/li>\n<\/ol>\n

              do non-equity partners have a vote?<\/strong><\/p>\n

              firms may define non-equity partners differently. but in general, a non-equity partner is a non-owner of the firm who has most of the rights and privileges of an equity partner. non-equity partners:<\/p>\n

                \n
              • have business cards that say \u201cpartner\u201d under their name<\/li>\n
              • are considered by clients and outside organizations as partners<\/li>\n
              • are seen by firm personnel as partners<\/li>\n
              • attend partner meetings and partner retreats<\/li>\n
              • receive confidential firm financial information (except partner compensation data)<\/li>\n
              • manage a client base and sign off on client reports if this authority is provided in the firm\u2019s quality control document<\/li>\n<\/ul>\n

                so, given that equity partners rarely vote and that, for all intents and purposes, the right to vote is really the right to engage in debate, discussion and persuasion, non-equity partners have very similar roles in \u201cvoting\u201d as equity partners. their opinions count. however, non-equity partners do not officially vote on the small number of major decisions reserved for an official partner vote.<\/p>\n","protected":false},"excerpt":{"rendered":"

                what about non-equity partners?<\/strong>
                \nby marc rosenberg<\/em><\/p>\n","protected":false},"author":1339,"featured_media":52068,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","footnotes":""},"categories":[3120,2266],"tags":[],"class_list":["post-54464","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pro-member-exclusive","category-partner"],"acf":[],"yoast_head":"\nwhy voting isn't such a big deal - 卡塔尔世界杯常规比赛时间<\/title>\n<meta name=\"description\" content=\"actionable intelligence for tax, accounting, and financial professionals\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"\/\/www.g005e.com\/2018\/05\/10\/voting-isnt-big-deal\/\" \/>\n<meta property=\"og:locale\" content=\"en_us\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"why voting isn't such a big deal - 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