What Your Firm Should Expect From Its Partners
Source: CPA Practice Management Forum
According to consultant August Aquila, cost-cutting measures during the last few years have left many CPA firms with “no additional fat to cut.” The only area left to examine, therefore, is the partners. Firms need to “take a hard look at their partners and determine if the firm can continue to carry all of them.” Aquila suggests that firms answer this question by examining these eight criteria:
- Can the firm support another partner? If not, why? Are some partners underperforming? Are some partners serving in administrative or marketing roles for more pay than a non-partner would receive for identical services?
- Does the firm apply the same standards for existing partners that it does for newly admitted partners?
- Does the firm have a formal partner evaluation program?
- Are partners meeting minimum levels of business development performance?
- Do partners make an economic contribution to the firm, as measured by cash collected, client profitability, origination, and other indicators?
- Are partners using their non-billable time to enhance the firm's value?
- Do partners make intangible contributions by virtue of their reputations or participation in civic or charitable organizations?
- Are partners good citizens? Are they team players?
Aquila says partners who don't meet minimum performance standards over a two-year period should either convert to non-equity status or leave the firm.
For the complete article, read “Partnership – A New Harsh Reality.”
From CPA Practice Management Forum, CCH Incorporated, 800-449-8114, July 2011, p. 18.