Growth is necessary to remain competitive, but cannot happen without staffing, leadership, and succession planning.

Alternatives to Adding to Staff

• Fire clients. It is difficult to fire clients who can no longer afford you; however, you can refer them to sole practitioners and others and possibly retain certain aspects of the work. It is easier to fire problem clients, so look at them first.
• It is better to have part-time workers than to not have them at all (even though it is sometimes inconvenient.)
• Some high energy firms cause staff and partner burnout. Firms need to develop strategies for people who don't want that kind of environment but can still make contributions.
• Saying thank you to staff is crucial.
• Although compensation is not necessarily the most important factor in staff satisfaction, one firm (Armanino McKenna in San Ramon California) decided to remove it as a factor at all. Two months after the regular raises, they instituted a 15 to 20 percent raise. The firm's turnover of 11 percent compares to a profession-wide average of over 25 percent.

Leadership

• Identify future leaders and inform them of it. They will begin to behave like leaders.
• Some firms will pay substantial recruiting fees, but won't invest a similar amount in leadership programs (such as at Stanford and Harvard) for people already on board.

Succession

Succession plans should include:

• Leadership training. Leadership can be taught.
• Transition of clients to younger partners.
• A vision for the firm.
• A requirement for partners to identify at least two possible successors for each leadership role they fill.
• Decisions on:
  • Whether retirement at a certain time is mandatory.
  • How to deal with death or disability.
  • Whether partners will retain equity upon retirement.
  • Vesting, benefits, pay-out terms, capital, interest, etc.
  • Whether there will be post-retirement benefits.

From Accounting Office Management & Administration Report, May 2006, p. 1. For subscription information contact Institute of Management & Administration, Inc., 3 Park Avenue, 30th Floor, New York, NY 10016-5902. One-year subscription $349. 212-244-0360, [email protected].  For the complete article, click here.