Partner Matters

Outside perspective can be the crucial difference when trying to reach consensus on matters affecting owners. Partner groups gather at annual retreats, conventions, planning sessions, quarterly/monthly meetings and seminars where they discuss many important ownership matters, since firms are made up of individuals, divergent personal and business goals can make it difficult to reach unanimous decisions or even high consensus. Generational gaps, philosophies on the value of client service versus revenue generation, appetite for growth, seniority versus merit, all can lead to spirited debates about key issues impacting owners:

Partnership Earnings, Sharing, Philosophy and Methodology

• Partner Admissions standards and processes
• Partner performance and accountability standards and processes
• Succession planning
• Merger & Acquisition philosophies and strategies

What we have routinely seen is that issues come up, discussions/debates are held, but resolution and action can actually be stifled, sometime over respect between partners, or simple disagreements.

That’s where an unbiased, independent advisor like alliantGrowth Advisory can bring tremendous value. Because our team has such broad and deep experience in the profession (having worked through these issues themselves, and having to implement and live with the results), we are able to facilitate discussions with partners, report back on findings, and when asked, make recommendations/suggestions to move forward to accomplish your firm’s goals.

In addition, a very specialized portion of our practice serving Managing Partners offers executive coaching and/or can provide a sounding board for leaders looking for highly experienced outside counsel. There are times when it can be invaluable to have someone to brainstorm with, especially when considering ideas that may seem ‘out of the box’.

Succession Planning

Succession planning is absolutely crucial in ensuring that your firm, its employees and your clients have a sustainable future. The problem is that, according to industry studies, only 20 percent of succession plans for CPA firms are considered “functioning.” In fact, industry observers cite succession planning as the number one area of concern for CPA firms. As the Baby Boomer generation of CPA firm professionals continues to retire or pivot into other business interests, the result for ‘aging’ firms is: what does an exit look like?

alliantGrowth Advisory can help you and your firm create a plan that tackles many succession issues including:

• What does a buyout structure look like?
• What is the financial strength of younger tenured partners to buy out senior and retiring partners?
• Is the next generation of leaders equipped and trained to grow the firm and support the financial aspects of the succession plan?

As the magnitude of firms with maturing leadership grows, the market will become more saturated with prospective sellers, which may lead to deterioration of valuation multiples. The firms with executable succesion plans will have a competitive advantage.

Unless you have partners that have been through the succession process, it’s difficult to acquire the requisite planning knowledge by looking solely within your own firm. Our experience and understanding in the marketplace can help guide and equip you for any upcoming succession challenges your firm may be facing.

Mergers and Acquisitions (M&A)

An important consideration for succession planning, and a way to stimulate growth, is through mergers and acquisitions. The top 100 firms in the US reported 120 mergers in 2018. Organic growth, combined with M&A activities has been shown to lead to accelerated increases in revenue, which in turn leads to higher partner profits.

alliantGrowth Advisory can bring you value by helping stimulate and facilitate planning discussions by providing broad market insights and practical advice based on decades of experience. Our team can help guide your firm in:

• Selecting the right target opportunities
• Structuring transactions
• Post-merger integration
• Instilling a growth culture post-merger

Jim Brady on Partner Matters

In a recent interview on the topic of Partner Matters, a term coined by Jim Brady, Brady asserted “In every firm with whom I’ve been an owner (Deloitte, Grant Thornton) or as an outside independent advisor interviewing partners, my conclusion that relative to internal running of a CPA firm, the Big Two items of most concern to the owners are

First: Who gets into the firm (partner admission process); and

Second: How partner earnings are shared.