How to Adopt and Execute an Effective Succession Plan

Source: Inside Public Accounting

Firms need to find out from all their partners whether they want to remain independent or, as many firms are now choosing, merge upstream. To opt for the former, firms need to have young partners, high-quality staff from which to promote future leaders, a staff turnover of no more than 12 percent to 13 percent, and teamwork among partners. 

The succession plan should include the following:

• A requirement that the retiring partner provide at least three years’ notice of retirement.
• A process for selecting the next managing partner.
• A program for development of the successor including introducing him or her to the retiring partner’s clients.
• A plan for succession throughout the firm.
• A plan to ensure the retention of the retiring partner’s clients.

During the period following notice, the retiring partner should write a complete description of each client’s business and special requirements. The successor should handle the client from that point on, and the departing partner should solicit feedback from the client. 

From Inside Public Accounting, March 2005, p. 6. 

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