Being a managing partner of a CPA firm is a special kind of management challenge, Marc Rosenberg explains in his recent webinar, "The Secrets of Being a Great Managing Partner." Partnerships are especially tricky entities to manage, according to Rosenberg, a CPA and long-time consultant to CPA firms. 

"Partners often feel that they have an inalienable right to do whatever they want whenever they please," says Rosenberg, who likens partnership management to "herding cats."

This webinar explores in detail why a corporate-style approach to firm management is preferred over a partnership approach and what makes a managing partner (MP) effective. That's not to say that partnerships shouldn't exist as an ownership structure; but they shouldn't, as an entity, try to share management duties for the firm.

"The single most important factor in a firm's success is how the firm is managed, and that is most often personified by the managing partner," Rosenberg says emphatically, a conclusion he's reached from working with and studying hundreds of CPA firms over 20 years. 

On the other hand, the partnership style of management, which is basically "management by committee," leads to slow, watered-down decisions, according to Rosenberg. He analogizes a partnership to a democracy, where decisions are made in a collegial, passive, or reactive way. The corporate management style, in contrast, is characterized by having a CEO-style executive who is empowered to lead, make decisions, and chart the firm's strategic course. 

A true managing partner will likely still have some involvement in administrative matters, such as policies, systems, and internal financial matters but should "stay out of the weeds," says Rosenberg. MPs often have a dedicated team that includes a COO or firm administrator, who manages day-to-day matters so that the MP has the freedom to focus on actively managing the firm and making the partners effective.

A true MP carries out these key responsibilities:

• Manage partner behavior and performance
• Manage the firm's growth and profitability
• Make important and timely decisions about and for the firm

It's not necessary that the MP be the best rainmaker or the most charismatic person in the firm, Rosenberg says. What's important is that the MP be a visionary leader — someone who can influence behavior, overcome resistance, and change the course of events. 

Rosenberg offers the following guidelines about where MPs should be spending most of their time:

• Managing the firm
• Bringing in business (if that's among the MP's skills)
• Nurturing relationships (not billable hours) with large clients
• Having a small number of billable hours with the firm's largest clients and only on sophisticated projects

Rosenberg also shares some insights from top MPs about what has made their firms successful. These include:

• Transgressions of core values are never tolerated.
• If you're not building, you shouldn't be an equity partner.
• A key to our profitability is specialization.
• Train new staffers on business development from their first day.
• Two things are never tolerated from partners: abuse of staff and low-quality work.
• Taking care of people is just as important as taking care of clients.

These points underscore many of the areas that managing partners should focus on to make their firms successful. But leadership is the key, Rosenberg says. "The absence of leadership is dramatic. Without leadership, organizations slowly stagnate and lose their way." 

Marc Rosenberg will be discussing this topic in a live webinar on July 11. To learn about Rosenberg’s latest thinking on how MPs can help their firms achieve greatness, register for the webinar here.