How to Bring In Quality Partners

Source: The Marc Rosenberg Blog, April 16, 2018

The following includes excerpts, reproduced with permission, from a blog entry by Marc Rosenberg. 

The dual-headed monster of succession planning and finding quality staff is causing anxiety at firms across the country. If your firm is fortunate enough to have staff that are partner material, here are critically important practices you should follow.

Prospective partners should have “the right stuff.”  They should be able to build strong relationships with clients, demonstrate credibility with staff, be effective communicators and show commitment to helping staff learn and grow. Not every person needs to be a rainmaker, but potential partners should at least be comfortable with practice development. 

Inspire staff to want to be partners.  CPA firm partners have a great gig. But alas, partners tell me their young staff don’t want to be a partner. The problem is the partners!  They don’t talk up to the staff how great it is to be a partner.

New partners need not all be equity partners.  Twenty-five years ago, only 10-20% of partners were non-equity vs. equity partners. Now it’s nearly 60%.

Make buy-ins affordable.  New partners are neither willing nor able to afford huge-buy-ins.

Make buyouts sensible. A sure way to cause prospective partners to reject a partnership offer is to require them to sign a retirement/buyout agreement that is hopelessly out-of-date and onerous.

Help new partners understand that voting is overrated. New partners quickly find out that partners do not have the inalienable right to participate in every firm decision.

Partners understand that mandatory retirement is a good thing. If partners have this cool job, why would they agree to retire before they want to?  The answer is succession planning.

For the complete entry, read “The Toughest Issues in Bringing In New Partners.”