partner

12 reasons to merge in a smaller firm

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silhouetted figures against us outline mapfrom buying talent to expanding territory, mergers can be fast ways to grow.

by marc rosenberg

if an opportunity to merge in a smaller firm were presented to you, would you be interested in pursuing it?

more on mergers: 20 terms to settle when merging up | 3 factors that always affect negotiations | mergers: assessing compatibility | case studies reveal potential loi issues | one times fees is a steal! | looking to grow your firm? how to find a seller in four steps | 14 keys to a successful merger | 5 steps to take before merging

my guess is that in excess of 90 percent of all cpa firms would answer this question with a resounding “yes!”
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4 ways to create more capacity

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purple no. 4 billiard ballconsider creating two classes of partners.

by bill reeb and dominic cingoranelli
卡塔尔世界杯常规比赛时间 / succession institute

when partners plan to retire, how do we go about creating additional capacity or freeing up the necessary capacity to handle the client transitions that need to occur?

more on performance management: partner retirement and the war for clients | succession: the questions to care about | 7 succession questions to ignore for now | develop your employees or suffer the consequences | what having your employees’ backs means | 5 harmful management attitudes (and how to fix them) | job 1 for the practice owner: client management

first, all of the “c” clients, which is our shorthand way of describing the smallest clients the firm serves – who while profitable, don’t have much opportunity to hire us for additional services – should not be transitioned to partners, but rather to managers.
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how to address partner compensation at a retreat

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woman leading meeting, flipchart in backgroundhow do you feel about evaluations … and tying compensation to them?

by marc rosenberg
cpa firm retreats

before formally beginning the discussion part of a retreat session, it’s always a good idea to begin by asking the participants what they want to be sure to cover. as issues are suggested, the retreat facilitator should write them down on a flipchart.

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3 tiers of partner compensation

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chart of 3 tiers of partner compensationplus: 6 major factors impacting bonuses. and 4 notes from a master.

by marc rosenberg
partner comp: art & science

most cpa firm partner compensation systems consist of three tiers, each of which compensates the partners in a different way.

more on partner compensation: partner compensation 101| what partners earn and how they earn it | partner compensation: an art, not a science | how partners view compensation: it’s not all about the money | why most partner comp systems are performance-based

what is base compensation (or salary)?

it’s common to define partners’ base compensation as their historical or street value to the firm. what they bring to the firm every day. a managing partner once told me: “it’s what we would have to pay a partner at another firm to come work with us.”

practice debunked: many firms have equal bases for all partners. their thinking is that the base is merely a level of compensation that (1) is above what managers are paid and (2) is enough for the partners to live comfortably on. firms like this are operating a modified pay-equal system, which is widely viewed in the cpa industry as ineffective and unfair. not only do partners not perform equally, there is almost always a wide variation from highest to lowest performer. the case for equal bases is a weak one at best.

practice debunked: i’ve seen some firms impute partner bases as follows: first, compute hourly pay rate by dividing the standard billing rate by the firm’s billing rate multiple. then, multiply the hourly pay rate by 2,000 hours to arrive at imputed base pay. billing rate multiple is a staff person’s billing rate divided by the hourly pay rate. eighty to ninety percent of all firms are in the 3.5 to 4.0 range.

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20 terms to settle when merging up

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green checks being made on checklistwhat the smaller firm needs to determine. they get a say, you know.

by marc rosenberg

when a small firm considers merging upward, they listen to the terms offered by the larger firm and decide whether they can accept them. through a combination of face-to-face meetings, negotiation sessions, telephone calls and review of materials, the seller should be comfortable with each of the following:

more on mergers: what to expect when merging up | 13 questions to assess an upward merger | mergers: assessing compatibility | 14 provisions to include in a letter of intent | want to merge? ask for data | merger prep: getting to know you | plant seeds to turn up merger candidates | 13 ways to screw up a merger

1. hopefully, you have identified the problems and the goals you have for the merger (retirement, access to staff, technical expertise, management capabilities, etc.). do you see each of these problems and goals actually being addressed and resolved with the merger?
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