Dysfunctional and Underperforming Partners
Source: CPA Practice Management Forum
Accounting firms are no longer lenient with underperforming and dysfunctional partners. It is too easy to identify them (using technology to generate productivity reports), and they are costly in terms of profitability and staff turnover.
Underperforming partners are those who slow down, either consciously or unconsciously. Dysfunctional partners are those who refuse to comply with firm policies and who are frequently avoided by staff. A dysfunctional partner may be personally productive but will negatively impact the rest of the firm.
When a partner consciously slows down, he or she can be transitioned to part-time with a commensurate reduction in responsibilities and compensation. Make sure there is clear understanding on issues such as voting rights and retirement benefits. This understanding should be commemorated in a written agreement.
Partners who unconsciously slow down may believe they are still making contributions in line with their compensation. Determine what is causing their problems—life circumstances, mental health, etc. Rehabilitation, possibly through outside counseling, may be possible. In some cases a change in responsibilities may solve the problem, e.g., developing new services, training or mentoring, or focusing on new business development.
Dysfunctional partners are typically more problematic than underperforming partners. Symptoms may include poor self-esteem, aggression, alcoholism, etc. Counseling or therapy is often required.
If underperforming and dysfunctional partners cannot be refocused or rehabilitated, they should be terminated.
The firm must develop minimum standards of partner performance and address shortfalls immediately.
Don’t allow marginal employees to become partners. Most problem partners were less than outstanding employees.
Never ignore underperforming or dysfunctional partners.
From CPA Practice Management Forum, CCH Incorporated, 800-449-8114, June 2007, p. 14. For the complete article, click here.