business development is a determining factor for some firms.
by marc rosenberg
how to bring in new partners
this is one of the grayest areas in bringing in new partners. it has perplexed cpa firms for decades.
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here is the typical scenario. the firm has had one or more managers on board for 10 to 20 years. they have made their mark primarily with their technical skills, doing great work with clients, showing tremendous loyalty and work ethic. they generally lack business development and to a lesser extent, leadership skills, but they have become indispensable to the partners, who rely on them heavily to service their clients. the partners would have heartburn if these managers left the firm.
now, one or more of these managers are promoted to partner.
- how does their job change? how should it change?
- they may not have been expected to bring in business because of their partners’ heavy reliance on them to service their clients. should the firm now expect these new partners to bring in business? to what extent are they expected to build their own client base?
- do they continue working on the same clients they did as managers?
to shed light on this practice, we polled 20 managing partners of local multipartner cpa firms from across the country. almost all of the firms’ annual revenue was $5 million to $25 million.
summary of responses
as is always the case when issues of general practice are discussed, there was a wide variety in the 20 responses we received. here is the consensus of the responses:
- when managers are promoted to partner, the role doesn’t change very much, especially in the beginning years. new partners almost always continue to work on the same clients they were responsible for prior to the promotion.
- the major change is that now they are expected to delegate work to managers so they can function as partners. this new partner role includes not only delegating the work but developing the managers’ leadership skills. this frees up the new partners to (a) take on additional clients other partners transfer to them and, most importantly, (b) do business development.
- for decades, cpa firms have debated the pros and cons of requiring people to bring in business to become eligible for partnership. our 20 firms reflect this diversity of opinion. several firms feel it is important to have a balance between business-getting and technical partners. however, more than half of the firms feel that new partners should develop business.
- several of the firms that were more insistent on business development as a requirement for becoming a partner stated that people with partner aspirations should have been engaged in business development activities well before being considered for partner.
- an important factor in all these issues is the increasing incidence of firms having two kinds of partners: non-equity and equity. many firms may not be so insistent on requiring business-getting skills to become a non-equity partner, but bringing in business is very likely to be a criterion for advancement to equity partner.
- several firms stated that they like their new partners to have distinguished themselves as experts in a niche or specialty service.