Part-Time Partners

Part-Time Partners

Source: Inside Public Accounting

Most people interviewed for this article by IPA protested against the term “part-time” on the grounds that the responsibility is full-time, even though hours at the office are reduced. Most partners who work these reduced office hour schedules are women. Their schemes vary. One spends one day per week in the office (except during tax season), another works part of every day, and another spends Wednesdays and Fridays away from the office. Here are some important ideas from the interviews:

• All partners working flexible hours must understand that the client comes first.
• Emphasis on the above helps partners avoid feeling guilty about working fewer hours.
• Some flexible schedule partners tend to work longer hours at first, albeit not in the office, to compensate and make sure their effectiveness is not compromised.
• Although billable hours are changed, responsibility for serving clients and generating new business has not.

Base compensation may be reduced, but isn’t always.

Bonuses are based on meeting agreed upon goals in most firms.

Senior managers working under flexible schedules are treated the same as other prospective partners and don’t become less than full-equity partners.

If a prospective partner is the right kind of person for the firm, reduced hours in the office shouldn’t preclude partnership.

Firms should be cognizant of legal issues of mandatory retirement. If a partner is in reality more like an executive than an owner, mandatory retirement may be illegal without a significant non-forfeitable retirement payment.

The 2006 benchmarking survey by IPA reveals:

• 70 percent of firms over $10 million require mandatory retirement.
• 31 percent of firms under $10 million require mandatory retirement.
• 80 percent of firms with mandatory retirement policies set the retirement age at 65.

From Inside Public Accounting, June 2007, p. 1. The Platt Consulting Group (www.plattgroupllc.com). Subscription $369 per year; back issues—nonsubscribers $50. 317-733-1920.