For over 100 years, attorneys and CPA’s have worked side by side. Few professions share such a long-standing working alliance for the good of their clients. So, how similar are we?
- Both professions are made up of a highly educated and skilled workforce.
- Both professions have very strict education and testing requirements to gain entrance.
- Both professions are highly respected and trusted by their clients and the community.
- Both professions form deep, long-lasting personal relationships with their clients – sometimes lasting generations.
- Lastly, both professions are facing short- and long-term partner succession challenges.
Like all businesses and professions, those in senior leadership roles are not getting any younger. With over 7,000 people turning 65 every day, the challenges for succession planning have never been greater. While the statistics vary, a large percentage of equity partners in both law firms and accounting firms will be eligible to retire in the upcoming years – and many already have.
It is no surprise that the impact of retiring equity partners in both professions will be great. The so-called “brain drain”, decreased interest by future equity partners, and client relationship transitions will all lead to a “perfect storm” of leadership transition difficulties for firms specializing in both professions. For many firms, there is also the tendency to be nearsighted as they struggle with the day-to-day operational challenges that come with working in client services. So what can firms do now?
- Senior partners need to be transparent and realistic about their retirement plans (assuming there are no agreements requiring mandatory retirement).
- Firms must train future leaders not only in technical skills, but also in relationship management, business development, general firm operations, and leadership skills.
- Firm leaders must champion the process, embrace its realities, and celebrate its opportunities.
- Senior partners need to “push work down” and delegate partner responsibilities early.
- Senior partners should share and introduce their professional networks to others, often and early.
- Firms need to track and plan financially for future partner retirements and the resulting financial obligations over the next 5 to 10 year period (at minimum).
- Firms need to evolve their compensation models to encourage transition over a period of years, not months.
None of these goals can be accomplished quickly. Employee and client loyalty are the top priorities to keeping a firm sustainable, able to meet its retirement obligations, as well as providing for the future benefit of its emerging leaders. Those future leaders, however, need to know what is in front of them – so transparency is critical.
At DiSanto Priest & Co., we have counseled many professional firms on succession planning. In fact, our own succession plan is always front and center in all of our partner discussions. We have successfully retired many partners over the last ten years and continually plan for future successions to follow. Click here to learn more.