Archive for the ‘Succession Planning’ Category

Wednesday, July 27th, 2016

An Important Step In Staff Development

“Mentoring is easy and natural; it does not have to be just another dreaded task on your to-do list.” – Rita Keller

Thanks so much to Accounting Today and Sean McCabe for featuring many of my comments in the article, Molding the Future of the Profession – Mentoring young staff should be a crucial part of the recruiting and retention toolkit of more accounting firms.” 

Follow the link to read the entire article. And, thanks to Edi Osborne for all of her great comments in the article.

Here are some bullet point highlights:

  • Mentoring is just as important as salary and technology.
  • Mentoring requires an investment of time and money.
  • It is about attracting and strengthening future leaders for the profession.
  • Young people will buy into the vision of what it means to be a CPA and stay in the profession longer if they make a solid connection with someone who has already been down that road.
  • CPAs are great at teaching young people the technical skills but fail to impart knowledge about relationship-building and career-building skills.
  • Showing and not telling is vital to the mentor-mentee relationship.
  • Effective mentoring has become a strategic focus for the most progressive and successful firms.
  • You have to water the flowers you want to grow.
  • Stephen Covey

Monday, June 27th, 2016


“If you really want to do something, you’ll find a way. If you don’t, you’ll find an excuse.” – Jim Rohn

April 16th – We can’t tackle revising our performance feedback system, we have to have some downtime for a while after April 15th.

May 1 – We can’t work on the new orientation/onboarding project now because everyone is taking some vacation since tax season is over.

June 1 – We can’t tackle revising our performance feedback system, it’s time to do them and we’ll have to wait until this year’s process is over.

July 1 – We can’t right now… too many people on vacation.

August 15th – We can’t do an upward partner feedback survey, it’s time to focus on the September 15th due date.

September 16th – We can’t possibly work on that organizational alignment project, we have to focus on the October due date.

October 17th – We’ll work on our succession plan after the partner retreat.

November 1 – Let’s see what we can get done in November!

December 1 – We’ll have to put a halt on that workflow project because we are so busy in December with tax planning.

January 1 – We’ll have to wait until after April 15th.

Sound familiar?

  • When you know what you want, and you want it bad enough, you'll find a way to get it.
  • Jim Rohn

Tuesday, May 24th, 2016

Addicted to Work

“You shouldn’t have superhuman expectations.” – Mary Blair-Loy

Frequently, it appears to me that some experienced CPAs are addicted to their work.

I think this is a big issue when it comes to succession planning. Sure, the firm’s policy says they must “retire” at age 65. They must relinquish their stock and they do. But many of these “retirees” want to keep working, keep their office, keep their relationships with special clients and not stay at home or pursue other interests.

Most do not have other interests. They believe their career is their life, it defines them. Being a partner at the firm feeds their ego or makes them feel important. Without being affiliated with the firm they feel they have no identity.

There is a great article on this topic on the HBR site. You feel challenged by your work; you’re engaged by it; you’re learning new things; and you have the opportunity to shape other people’s careers. It is extremely rewarding but when you give all your attention to work, you eventually pay a steep price. 

Working long hours, taking few vacations and never truly being “off” (due to digital devices) is harmful to your relationships, your health and your productivity. It is also a bad example to set for your employees. No wonder many younger CPAs have no desire to become an owner.

Read the entire article here. It gives you some tips to overcome your addiction. Take an honest look at yourself, whether you are a retiring partner or a constantly busy accountant of any age working in a CPA firm.

  • There are no secrets to success. It is the result of preparation, hard work, and learning from failure.
  • Colin Powell

Wednesday, May 4th, 2016

Two Informative Webinars – Partner Comp & Succession


“The trouble with retirement is you never get a day off.- Abe Lemons

CPA Leadership Institute will be hosting two webinars focused on some very timely topics for CPA partners.

The webinars will be presented by my good friend Gary Adamson of Adamson Advisory.

May 17, 2016 – Partner Compensation Methods & Trends.  Register here.

May 18, 2016 – Surviving Partner Succession and Retirement In Your Firm. Register here.

Adamson has over 25 years’ of experience managing a growing and profitable firm. He understands what it is REALLY like managing a firm and multiple partners.

  • There are some who start their retirement long before they stop working.
  • Robert Half

Tuesday, February 2nd, 2016

Exit Interviews Are Important

IMG_1192Being a consultant to CPA firm management, I hear a lot of stories. If you work in a firm, you can just imagine. Many of them sadden me, yet many also bring me joy. This is a “what was he thinking?” type story.

A firm administrator performed the usual exit interview with a departing employee. The employee was not fired, he left after several years building his career at the firm. Many of the remarks made by the exiting employee, according to the firm administrator, were fairly critical, yet true. When the comments were reported to the partners, one partner stated, “We don’t care what Joe thinks, he never did get with the program.”

Exit interviews can be very beneficial to both the firm and the person departing. Employees leave for a reason. Finding out why can help you plan for changes that need to be made.

  • Employees quit their boss, not their job.
  • Employees leave when they lose confidence in their leaders.
  • Employees leave because of issues with workplace culture.
  • Employees leave because they don’t see opportunity for career advancement and growth in compensation.

The person conducting the interview should be experienced in crucial conversations with employees, follow an established process or checklist. The interview should be conducted in a truly caring and non-threatening manner. Remember, the employee will most likely be dreading the interview and needs to be put at ease.

After you gather information from exit interviews, take the comments seriously and determine what actions need to happen to make your firm a place where talented people want to stay and build their careers.

  • And now, gentlemen, like your manners, I must leave you.
  • Dylan Thomas

Friday, January 15th, 2016

Managers Are Often NOT Doing Manager Work

This is mostly a repeat of a previous post from January 2014. At this time, I feel it is worth repeating!

People with the title of “manager” working inside CPA firms usually are not doing what a “manager” should be doing. Just like many partners, managers get very comfortable actually DOING the work rather than carrying out manager level responsibilities and activities.

Managers play a key role in employee engagement and retention. Remember, people leave bosses not firms.

I once asked a group of CPA firm owners to give me their expectations of a person in the manager role and to keep it very simple. I think the following bullet point job description says it clearly and concisely. How do your managers stack-up?

  • Solid technical skills, with an area of technical expertise that is recognized
  • Good communication skills, both written and verbal
  • The ability to manage and develop team members
  • The ability to manage client relationships
  • The ability to manage multile engagements
  • The ability to manage engagement profitability
  • Executive presence
  • Must be an advocate of the firm
  • Participation in firm marketing activities
  • Participation in personal marketing activities
  • Participation in various firm internal projects
  • Be viewed, by most firm owners, as a candidate for partner status

Addendum for 2016: So many partners declare they have no one who can replace them when they retire. If you want succession to work at your firm you must work with your managers on these key traits. Developing people is a key characteristic of a competent partner.

  • To add value to others, one must first value others.
  • John Maxwell

Tuesday, November 17th, 2015

Cannot Afford To Leave

Today’s post is sort of a follow-on to yesterday’s Sacred Cow post (people who are protected, cannot be fired). There’s probably at least one of those inside your firm, probably more.

What about the people who really don’t want to stay at your firm but, over the years, they have performed adequately (but maybe not) and you have given them annual pay increases and now they make a VERY good salary. They are not passionate about the firm any longer (this could even be partners) and are just “putting in their time”.

EGHQ7ZDZI8I hear it all the time….. “There’s no where else in my area where I can make as much as I do here.” And from the other side, “She’s doing a pretty good job for us and it’s so hard to hire people now.”

Develop a “grow your own” culture where you are continually hiring new college grads and developing them. That way there is always someone who can stretch and fill a spot vacated by a more experienced person. People love challenges and promotions.

Identify your middle stars, people who are not all superstars but they are not falling stars either. Many middle stars are passionate about the firm. Challenge them and help them meet your expectations. If they are unwilling, and too comfortable with status quo, offer them the opportunity to work for another firm.

If you have someone who is working at your firm just because of the money – it’s time to deal with it. Give them a nice severance. Long-term, it’s the right decision.

From the other side, if you are that person, working for an accounting firm although it’s depressing, unchallenging, chaotic and poorly managed, don’t stay just for the money. Life is too short.

  • There's no excuse to be bored. Sad, yes. Angry, yes. Depressed, yes. Crazy, yes. But there's no excuse for boredom, ever.
  • Viggo Mortensen

Wednesday, August 19th, 2015

Put A Lid On It

lidPublic accounting has been long known as a profession where you will work a lot of hours, especially during January through April and during the fall “extension season.”

More and more firms are discovering that all of those long hours are not really necessary. My observation is that the more hours you require, the slower people work.

Studies have found that productivity per hour declines sharply when the workweek exceeds 50 hours and it drops off so much after 55 hours that there’s no point in working any more. People who work as much as 70 hours per week actually get the same amount done as people who work 55 hours. The “extra” hours are wasted.

Reflect back on last “tax” season. How much time was wasted inside your firm? People arrive late because they know they will be staying late. People bring their breakfast with them and spend the first valuable productivity minutes of the day preparing and eating in the lunch room (and chatting with everyone who comes in to get coffee). Non-productive meetings happen during this busy time. The firm provides dinner so everyone will stay longer. Some people stay, just to eat, because they want to be seen.

Why would your younger accountants aspire to be a partner in the firm when they see partners working 60, 70 even 80 hours per week? Partners complain they have no bench-strength. Not a surprise. Times have changed – people work to live…. most do not want to live to work.

Put a cap on hours – no more than 50 to 55 per week. If you get them in during the week – no work on weekends. Some very successful people have proven that shutting down on weekends has immense benefits.

Read more about how successful people spend their weekends via Travis Bradberry on Forbes.

  • I decided to fly through the air and live in the sunlight and enjoy life as much as I could.
  • Evel Knievel

Monday, July 27th, 2015

Three Steps To Valuing Your CPA Practice

Are you facing several partner retirements over the next few years? If not, you would be rather unusual. With the exodus of the baby boomers from the workforce, many CPA firms face the challenge of valuing their practice for those events.

gary-adamson-598x747Last week, I received the latest newsletter from Gary Adamson of Adamson Advisory. In it he describes three steps to valuing your practice. Here are some highlights:

Step One – You need to determine the value of your firm. This is for an internal transition, not a sale or merger. Values are typically higher for an outside deal. There are two pieces to this puzzle – capital and goodwill. Capital is easy so goodwill is where most of the discussion centers. For traditional services, the overall average goodwill value has been about 80% for the last several years. So, don’t always count on one times revenue.

Step Two – This is where you determine how to split up the firm’s goodwill among the owners. You can allocate it based on ownership percentages or books of business (we see this in smaller firms). In larger firms there is a process called average annual volume or AAV.

Step Three – This is the process you utilize to pay out the value to the retiring partner. The majority of firms are paying out the goodwill in the form of deferred compensation. Usually it is over a 7 to 10 year period.

Be sure to read the entire article via Adamson Advisory.

  • Any fool can make a rule.
  • Henry David Thoreau

Wednesday, July 8th, 2015

Buy-In For New Partners

I find that many CPA firm owners/shareholders are still not aware of the current trends relating to new partner buy-in. I won’t repeat the current trend relating to this important topic. I will let my good friends, Marc Rosenberg and Gary Adamson expertly explain it.

Marc, is that you with Rita?Rosenberg just published one of his great Q&A type posts. The title is “Should Billings Originated by Managers Reduce Their Buy-In?” Rosenberg says, “Determining the buy-in by multiplying the firm’s annual billings by an arbitrary ownership percentage is no longer common.


Gary, is that you with Rita?Adamson published an article that elaborates on partner buy-in and more. The title is “Admitting New Partners – Succession Best Practices.” Adamson says, “Not too many years ago it wasn’t unusual for new partners to buy in at valuations that included a large goodwill factor on top of a capital account amount. The large numbers really weren’t affordable and firms figured out creative ways to internally finance them. Another common practice was purchases of partnership interests outside the firm between partners which produced a lot of wheeling and dealing and inconsistencies. The good news is that both of these practices are almost gone.”

As I continue to remind you…. times are changing and firms that wish to remain competitive must keep pace with current trends.

  • Most people don't aim too high and miss, they aim too low and hit.
  • Bob Moawad