{"id":67758,"date":"2019-11-01t09:00:32","date_gmt":"2019-11-01t13:00:32","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=67758"},"modified":"2024-08-14t09:34:58","modified_gmt":"2024-08-14t13:34:58","slug":"8-ways-comp-systems-get-partners-to-do-what-the-firm-needs","status":"publish","type":"post","link":"\/\/www.g005e.com\/2019\/11\/01\/8-ways-comp-systems-get-partners-to-do-what-the-firm-needs\/","title":{"rendered":"8 ways comp systems get partners to do what the firm needs"},"content":{"rendered":"<p><strong><a href=\"https:\/\/cpatwpe.s3.amazonaws.com\/cpatrendlines\/wp-content\/uploads\/2016\/09\/number8_industrial-3d-number_fyi4f75_.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-50050\" src=\"https:\/\/cpatwpe.s3.amazonaws.com\/cpatrendlines\/wp-content\/uploads\/2016\/09\/number8_industrial-3d-number_fyi4f75_.jpg\" alt=\"stylized industrial 3d number 8\" width=\"200\" height=\"334\" srcset=\"https:\/\/cpatwpe.s3.amazonaws.com\/cpatrendlines\/wp-content\/uploads\/2016\/09\/number8_industrial-3d-number_fyi4f75_.jpg 96w, https:\/\/cpatwpe.s3.amazonaws.com\/cpatrendlines\/wp-content\/uploads\/2016\/09\/number8_industrial-3d-number_fyi4f75_.jpg 300w\" sizes=\"auto, (max-width: 200px) 100vw, 200px\" \/><\/a>is your firm&#8217;s message clear or cloaked?<\/strong><\/p>\n<p><i>by marc rosenberg<\/i><br \/>\n<a href=\"\/\/www.g005e.com\/product-category\/marc-rosenberg\/?orderby=title-desc\"><i>the rosenberg practice management library<\/i><\/a><\/p>\n<p><span data-contrast=\"auto\">years ago, a senior partner at a 12-partner firm retreat i was facilitating gave us all an \u201caha\u201d moment:<\/span><span data-ccp-props=\"{}\">\u00a0\u201c<\/span>a partner compensation system is just a way of allocating income among the partners. it\u2019s not meant to be the primary way to manage a firm.\u201d<\/p>\n<blockquote><p><b>more: <\/b><a href=\"\/\/www.g005e.com\/2019\/09\/29\/7-points-of-a-well-crafted-partner-buyout-agreement\/\">7 points of a well-crafted partner buyout agreement<\/a> | <a href=\"\/\/www.g005e.com\/2019\/09\/22\/take-yodas-advice-on-strategic-planning\/\">take yoda\u2019s advice on strategic planning<\/a> | <a href=\"\/\/www.g005e.com\/2019\/08\/18\/buyers-name-20-big-merger-turnoffs\/\">buyers name 20 big merger turnoffs<\/a> | <a href=\"\/\/www.g005e.com\/2019\/07\/14\/survey-how-mps-ensure-their-firms-optimize-technology-usage\/\">smart tech tips from top cpa firms<\/a> | <a href=\"\/\/www.g005e.com\/2019\/07\/07\/15-amazing-organizational-tactics-to-manage-a-cpa-firm\/\">15 amazing organizational tactics to manage a cpa firm<\/a> | <a href=\"\/\/www.g005e.com\/2019\/05\/26\/why-governing-by-partner-ownership-is-bound-to-fail\/\">why governing by partner ownership is bound to fail<\/a> | <a href=\"\/\/www.g005e.com\/2019\/05\/20\/6-ways-to-retain-nextgen-staff\/\">6 ways to retain nextgen staff<\/a> | <a href=\"\/\/www.g005e.com\/2019\/05\/12\/how-to-develop-a-truly-progressive-nextgen-culture\/\">how to develop a truly progressive nextgen culture<\/a> | <a href=\"\/\/www.g005e.com\/2019\/04\/28\/5-top-concerns-of-great-managing-partners\/\">the top 5 concerns of great managing partners<\/a> | <a href=\"\/\/www.g005e.com\/2019\/04\/14\/partners-when-to-speak-up-and-when-to-shut-up\/\">partners: when to speak up and when to shut up<\/a><br \/>\n<strong><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-full wp-image-49700\" src=\"http:\/\/4f2bur4nuye2cgakm2rm61qk.wpengine.netdna-cdn.com\/wp-content\/uploads\/2016\/08\/yellow_key_clip_art-e1375897299811-36p-hi-1-e1470686574894.jpg\" alt=\"goprocpa.com\" width=\"39\" height=\"16\" \/><span style=\"color: #b79c00;\">exclusively for pro members. <\/span><\/strong><span style=\"color: #b79c00;\"><a style=\"color: #b79c00;\" href=\"\/\/www.g005e.com\/wp-login.php?redirect_to=\/\/www.g005e.com\/2019\/11\/01\/8-ways-comp-systems-get-partners-to-do-what-the-firm-needs\/\">log in here<\/a> or <a class=\"external\" style=\"color: #b79c00;\" href=\"http:\/\/goprocpa.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">2022世界杯足球排名 today<\/a>.<\/span><\/p><\/blockquote>\n<p><span data-contrast=\"auto\">there are two messages here, one obvious and one that is deeper. <\/span><br \/>\n<!--more--><\/p>\n<ul>\n<li><span data-contrast=\"auto\">first, many firms, especially those below $15 million in revenue, use partner comp as the primary way to communicate to partners whether they have performed well and met expectations. believing <\/span><span data-contrast=\"auto\">partners\u2019 performance and behavior\u00a0<\/span><span data-contrast=\"auto\">can be modified simply<\/span><span data-contrast=\"auto\"> with money, management essentially says, \u201cif you do good, you\u2019ll get a big check. keep doing what you\u2019ve been doing! if your performance is below expectations, then your income allocation may disappoint you.\u201d in the latter case, the firm hopes that the dissatisfied partner takes this \u201cmessage\u201d to heart and works hard to do better.<\/span><span data-ccp-props=\"{&quot;335559737&quot;:720}\">\u00a0<\/span><br \/>\n<b><\/b><\/li>\n<li><span data-contrast=\"auto\">the deeper message this partner conveyed was that the best, most effective way to improve anyone\u2019s performance \u2013 not just partners \u2013 is with communication and coaching, not by the size of the paycheck. successful firms establish a strong link <\/span><span data-contrast=\"auto\">between partners\u2019 compensation and the extent to which they succeed at helping the firm achieve its goals.<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">here are eight ways this is accomplished:<\/span><\/p>\n<ul>\n<li><b><span data-contrast=\"auto\">clearly define what the firm needs from its partners.<\/span><\/b><span data-contrast=\"auto\"> many <\/span><span data-contrast=\"auto\">call<\/span><span data-contrast=\"auto\"> this strategic planning or creating a vision. partners obviously can\u2019t do what the firm needs until someone articulates what those needs are. a firm can have an innovative and inspiring strategic plan, but it will mean nothing if it\u2019s not executed by the partners.<\/span><\/li>\n<li><b><span data-contrast=\"auto\">all partners should have written roles, expectations and very specific goals.<\/span><\/b><span data-contrast=\"auto\"> this applies to their role in achieving the strategic plan <\/span><span data-contrast=\"auto\">as well as<\/span><span data-contrast=\"auto\"> their operational goals (bringing in clients, mentoring staff, billing, collection, delivering quality service, etc.).<\/span><\/li>\n<li><b><span data-contrast=\"auto\">intangibles must play an important role in <\/span><\/b><b><span data-contrast=\"auto\">allocating<\/span><\/b><b><span data-contrast=\"auto\">\u00a0partner\u00a0<\/span><\/b><b><span data-contrast=\"auto\">income<\/span><\/b><b><span data-contrast=\"auto\">. <\/span><\/b><span data-contrast=\"auto\">we all know the tangibles \u2013 finding, minding and grinding. but the intangibles are important too \u2013 managing the firm or a team, <\/span>delegating clients to other firm members, mentoring and nurturing staff while helping them learn and grow; living and breathing the firm\u2019s core values.<\/li>\n<li><b><span data-contrast=\"auto\">bring down \u201cbook of business\u201d from its pedestal.<\/span><\/b><span data-contrast=\"auto\"> book of business is probably the ugliest term ever invented by cpa firms. it connotes \u201ci vs. we<\/span><span data-contrast=\"auto\">,<\/span><span data-contrast=\"auto\">\u201d clients owned by the partner instead of the firm and the firm merely\u00a0<\/span><span data-contrast=\"auto\">acting as<\/span><span data-contrast=\"auto\">\u00a0a group of solos instead of\u00a0<\/span><span data-contrast=\"auto\">one<\/span><span data-contrast=\"auto\"> firm. firms must reduce the potential<\/span><span data-contrast=\"auto\">ly<\/span><span data-contrast=\"auto\"> huge impact that book of business has on compensation and partner buyout. managing a large client base <\/span><span data-contrast=\"auto\">should always be<\/span><span data-contrast=\"auto\">\u00a0important but delegating clients to others<\/span><span data-contrast=\"auto\">\u00a0and working as a team<\/span><span data-contrast=\"auto\"> is also important when this is best for the firm. also \u2026<\/span><\/li>\n<li><b><span data-contrast=\"auto\">differentiate origination (finding) from billing responsibility (minding).\u00a0<\/span><\/b><span data-contrast=\"auto\">suppose a firm has two partners, equal in every way shape and form (age, experience, personality, etc.). they also have the same $1 million client <\/span><span data-contrast=\"auto\">responsibility<\/span><span data-contrast=\"auto\">. <\/span><span data-contrast=\"auto\">f<\/span><span data-contrast=\"auto\">urther suppose that one partner originated 100 percent of her client base and the other originated $50,000, with the remainder delegated to him. <\/span><span data-contrast=\"auto\">both partners are valuable to the firm but c<\/span><span data-contrast=\"auto\">learly<\/span><span data-contrast=\"auto\">,<\/span><span data-contrast=\"auto\">\u00a0the first partner should be paid more than the second. the point here is that in allocating partner income, the firm must look beyond client base managed\u00a0<\/span><span data-contrast=\"auto\">and also<\/span><span data-contrast=\"auto\">\u00a0factor in\u00a0<\/span><span data-contrast=\"auto\">client origination.<\/span><\/li>\n<li><b><span data-contrast=\"auto\">the managing partner should <\/span><\/b><b><span data-contrast=\"auto\">impact income allocation more than other partners<\/span><\/b><span data-contrast=\"auto\"><strong>.<\/strong> there are two types of mps: <\/span><span data-contrast=\"auto\">those who are expected to manage<\/span><span data-contrast=\"auto\">\u00a0the performance and behavior of the other partners<\/span><span data-contrast=\"auto\">,\u00a0<\/span><span data-contrast=\"auto\">growth and profitability<\/span><span data-contrast=\"auto\">\u00a0and those who are not.<\/span><span data-contrast=\"auto\">\u00a0<\/span><span data-contrast=\"auto\">the latter is more of an\u00a0<\/span><span data-contrast=\"auto\">admin partner than a true mp. <\/span><span data-contrast=\"auto\">t<\/span><span data-contrast=\"auto\">rue mps\u00a0<\/span><span data-contrast=\"auto\">should<\/span><span data-contrast=\"auto\">\u00a0have a much more significant role in allocating income than<\/span><span data-contrast=\"auto\">\u00a0all<\/span><span data-contrast=\"auto\"> the other partners. this <\/span><span data-contrast=\"auto\">is often done<\/span><span data-contrast=\"auto\">\u00a0with the mp being the chair of the firm\u2019s compensation committee<\/span><span data-contrast=\"auto\">\u00a0and\/or<\/span><span data-contrast=\"auto\">\u00a0the mp having near total discretion in allocating a\u00a0<\/span><span data-contrast=\"auto\">bonus pool. <\/span><span data-contrast=\"auto\">although<\/span><span data-contrast=\"auto\">\u00a0money isn\u2019t the best way to motivate a partner, it\u00a0<\/span><strong>does<\/strong><span data-contrast=\"auto\">\u00a0help mps\u00a0<\/span><span data-contrast=\"auto\">to\u00a0<\/span><span data-contrast=\"auto\">have partner compensation as\u00a0<\/span><span data-contrast=\"auto\">a<\/span><span data-contrast=\"auto\">\u00a0weapon in their arsenal.<\/span><\/li>\n<li><b><span data-contrast=\"auto\">communication. communication. communication. <\/span><\/b><span data-contrast=\"auto\">show me a subjective performance-based partner compensation system (comp committee or mp-decides) where there is little or no communication between individual partners and management regarding performance, and i\u2019ll show you a system that is\u00a0<\/span><span data-contrast=\"auto\">doomed to fail.<\/span><\/li>\n<li><b><span data-contrast=\"auto\">adopt a compensation committee to allocate partner income<\/span><\/b><span data-contrast=\"auto\"><strong>.<\/strong> this is the best way to incorporate <\/span><span data-contrast=\"auto\">all of<\/span><span data-contrast=\"auto\">\u00a0the items above in your income allocation\u00a0<\/span><span data-contrast=\"auto\">system<\/span><span data-contrast=\"auto\">. the comp committee is the system of choice for <\/span><span data-contrast=\"auto\">the vast majority of<\/span><span data-contrast=\"auto\"> firms eight partners and above. why? because it\u2019s the best for (a) balancing production with intangible performance factors, (b) allowing the committee to use its best judgment to assess each partner\u2019s performance without being restricted by formulas, (c) making great use of goal setting and (d) allowing the firm to link partner income with what the firm needs from its partners.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true}\">\u00a0<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p><strong>is your firm&#8217;s message clear or cloaked?<\/strong><br \/>\n<em>by marc rosenberg<\/em><br \/>\n<em><a href=\"\/\/www.g005e.com\/product-category\/marc-rosenberg\/?orderby=title-desc\">the rosenberg practice management library<\/a><\/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":[1363,2374,3120,3002,2266],"tags":[2429,572,38,1416],"class_list":["post-67758","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-pay-compensation","category-pro-member-exclusive","category-special","category-partner","tag-earnings","tag-pay","tag-salary","tag-wages"],"acf":[],"yoast_head":"<!-- this site is optimized with the yoast seo plugin v24.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>8 ways comp systems get partners to do what the firm needs - 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\/2019\/11\/01\/8-ways-comp-systems-get-partners-to-do-what-the-firm-needs\/\" \/>\n<meta property=\"og:locale\" content=\"en_us\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"8 ways comp systems get partners to do what the firm needs - 卡塔尔世界杯常规比赛时间\" \/>\n<meta property=\"og:description\" content=\"actionable intelligence for tax, accounting, and financial professionals\" \/>\n<meta property=\"og:url\" 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