How to Handle Problem Partners

Source: Partner’s Report—the Monthly Update for CPA Firm Owners

This article is based on information from law firm consultant Blane Prescott, Hildebrandt International, San Francisco ([email protected]).

Partners in CPA firms may behave like partners in law firms, though law firm partners are thought to be more problematic. Here are some symptoms and remedies often found in law firms:

v      Partners who struggle with timesheets, billings, and collections can seriously affect realization rates and can alienate clients.

It is best to train partners on these problems early in their careers, perhaps even before they become partners.

Financial penalties rarely work. One-on-one confrontation with these partners may help.

Delegating these tasks to administrative personnel will relieve partners and allow them to work on things they like to do.

v      There are partners who coast on the momentum from their better days, but are not productive today.

Cutting their compensation is rarely the solution. Discussing the issue candidly with the partner in an attempt to find the cause is sometimes effective.

v      Poor quality service by a partner is often indicated by client complaints, poor realizations, and the inability to sustain client relationships.

This should be addressed by the partner in charge of the department in which the offending partner works. A review of the partner’s strength and weaknesses is essential. Avoid compensation based solely on formulas, and include other factors.

Interview clients to get candid feedback on quality.

Standards for admitting partners may have to be raised.

Sometimes the only solution is to terminate the partner.

When firms tolerate problem partners, they risk losing other partners. Indications that partners may be ready to leave the firm include:

v      An erstwhile outspoken partner becomes quiet.

v      A partner is obviously unhappy.

v      A partner displays knowledge about a competitor’s numbers.

From Partner’s Report—the Monthly Update for CPA Firm Owners, July 2005, p. 1. For the complete article click here. For subscription information contact Institute of Management & Administration, Inc., 3 Park Avenue, 30^th Floor, New York, NY 10016-5902. One-year subscription $329. 212-244-0360, [email protected].