What to Expect From a New MP
Source: CPA Trendlines
The following includes excerpts, reproduced with permission, from an article by Marc Rosenberg.
Baby boomer partners are rapidly approaching retirement age, creating a huge demographic shift. One result of this is a dramatic increase in new managing partners at firms.
Several tips for bringing in a new MP:
- Consider an initial fixed term to decide if it's a good fit.
- Offer two types of compensation guarantees in exchange for giving up clients:
- While MP: No less than his or her percentage of total partner income earned in the year prior to assuming the MP job; and
- After stepping down: No less than his or her percentage of total partner income during the last year as MP, for three to four years.
- Give the MP sufficient authority to do his or her job without having to go to the board every time a decision needs to be made.
- Before too long, the MP should earn at least as much as the average income per equity partner.
- Factors considered in setting the MP's compensation should include growth in the top and bottom lines.
A short list of what partners should expect from their MP:
- Manage and coach partner performance and behavior.
- Drive profitability.
- Ensure a high level of practice development and marketing activity by firm personnel.
- Make the firm a great place to work, where people continually advance due to excellence in training and mentoring.
- Be a champion for the firm's culture and core values, dealing swiftly with transgressions.
For the complete article, read “Compensation Issues for the New Managing Partner.”
From CPA Trendlines, August 2, 2012, http://cpatrendlines.com.