Healthy Partner Relationships
Source: CPA Trendlines
The following includes excerpts, reproduced with permission, from an article by Marc Rosenberg.
What does it take for partners to stay together? Here are seven critical requirements:
- Congruity of goals. What are the partners' goals in areas such as firm profitability, personal earnings, growth rate, services to offer, industries to serve, how aggressively consulting should be pursued, how the firm markets, training, management structure, long-term strategies and more?
- Congruity of values. What are the partners' values in areas such as work ethic, work quality, intellect, commitment to quality, fiscal prudence, leadership, importance of billable hours vs. bringing in business vs. size of one's client base vs. management, etc.? How important are technical proficiency, seniority, interpersonal skills, writing, and training skills?
- Partner compensation. This is the most sensitive area of firm management. For the compensation system to succeed, most of the partners need to feel the system is reasonably fair.
- Partner retirement. Partner retirement benefits represent a significant unfunded liability to most firms. Unless there is agreement on this issue, few firms can surmount this obstacle. Many firms break up as the partners begin to approach the age when the reality of making retirement payments starts sinking in.
- Trust. If you can't trust your partner, you have no business being a partner of that person. Integrity, voracity, honesty, and morality should be non-negotiable conditions.
- Communication. When it comes to strong partner relations, there is no substitute for effective communication, on many levels.
- Conflict resolution. CPA firm partners have a natural tendency to avoid conflicts with each other, hoping the conflicts will go away. Firms that are not effective in dealing with conflict are often paralyzed when it comes to taking any form of action to improve the firm.
For the complete article, read "When Is It Best for Partners to Stay Together, and When Is It Best to Part?"
From CPA Trendlines, October 25, 2012, http://cpatrendlines.com.