What Young Accountants Want to Know about the Path to Partner

By Alexandra DeFelice
 
During a recent webinar presentation – "The Twelve Questions Rising Stars Ask about the Path to Partner" – Tamera Loerzel, a partner with ConvergenceCoaching LLC, offered advice regarding the role managers and partners need to take in helping young CPAs rise to partner. 
 
"Part of your vision needs to be to show your team members their role in contributing to that vision," Loerzel said. "What does it take for each person to progress in his or her career?" 
 
Loerzel explained that younger generations are typically more straightforward than Baby Boomers when it comes to asking for what they want and what it will take to get what they want. She encouraged today's partners to be open in providing answers to their questions in order to prepare rising stars for the future.
 
The Twelve Questions Rising Stars Ask
 
Question 1: What do you see as my future with the firm?
 
Firm owners should outline goals for their staff that align to the vision of the firm and then provide constant feedback on staff members' progress rather than wait for annual reviews to do so.
 
"High performers often want [feedback] more to improve and are demoralized when they don't get it," Loerzel said. "They want to correct something right away. Lack of value is perceived if we don't take the time to provide the feedback."
 
Think about what you can do that's special for rising stars to groom and develop them at the pace they want to go. Let them know they're important and that they have a long-term future with the firm. 
 

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Question 2: What do you expect the timing of my admission to partner to be?
 
With retirements being pushed off, younger accountants are wondering how long it will be before an existing partner will leave a seat open for them. If they think it will take too long, they'll seek opportunities elsewhere.
 
Teach firm economics early so staff members understand why decisions are made and how they can impact firm finances for the better.
 
Questions 3 and 4: What specific deliverables or results do I need to produce to be a candidate for partner and by when? How do I stack up compared to others I perceive to be in the queue?
 
A survey of webinar participants found the following three elements essential to becoming a partner (in order of importance):
  1. Leadership behavior
  2. Client service skills
  3. Financial performance
Set minimum/basic partner expectations, such as participation in retreats, meeting certain revenue metrics, etc. But remember, it's "one size fits one." A firm may have a need for a unique skill set, niche, or other area the employee can fulfill. 
 
Create a job description that shows progression through each level. However, be careful not to make what could be perceived as a promise. Review and update criteria annually and set realistic, relevant goals. Don't just promote people on tenure.
 
Question 5: What programs or activities should I expect to participate in that will help me develop and prepare me to act as a partner? 
 
Leadership programs, either internal or external, are essential. Take your rising stars to conferences and give them the opportunity to network with others. Offer them high-level shadowing work with their superiors. Show gratitude and appreciation, both publically and privately, including what clients say about them.
 
Questions 6 and 7: What are the differences in partnership levels? Will I be admitted as a non-equity partner, a principal, or an equity partner? Can I leapfrog right to equity, or do I have to follow that linear progression?
 
More and more firms are adopting the non-equity level for various reasons, Loerzel said, but there are dozens of combinations. The key is to communicate the pros and cons of each. For example, the non-equity level allows the firm to test-drive a potential partner, allows the ability to promote that person, and it typically costs less. The cons often center on non-equity partners feeling as though their opinions are not as valued. Communicate their value and place them in the hierarchy to risk losing them based on where they believe their place in line falls.
 
Questions 8 and 9: When you admit me as a partner, what are the specific buy-in requirements? How does the buy-in process compare to other firms?
 
In 2012, for firms ranging in revenue from $2 million to $10 million, the average new partner buy-in was $127,000, and 48 percent of all firms surveyed had a buy-in of less than $100,000, according to The Rosenberg Survey. There are various models to consider, but in general, the simpler the better.
 
Question 10: If there is a buy-in to become partner, has the firm modeled the equity buy-in process along with the equity buyout or retirement buyouts?
 
Look at your firm's existing models and see if you can simplify them to make it more clear to people what it will cost them to become a partner now and ten, twenty years from now. Make plans for your existing equity partners now and develop transition plans for those planning to retire or cut back their hours in the next three to five years. 
 
Question 11: What agreements will I be asked to sign when I become a partner? 
 
Share this information at management level and higher. Update partner agreements regularly based on changes happening within the firm. Tie updates to exhibits and addendums to avoid having to update the entire agreement. 
 
Question 12: How will we monitor my progress toward partner? 
 
Rising stars should be assigned a "shepherd" accountable for helping them establish goals and progress, Loerzel said. 
 
These dozen questions may take anywhere from six to twelve months to answer, according to Loerzel. She suggests firms start with what's most important to the firm and to its people, then move on from there.
 
A recording of the webinar is available on CPAacademy.org.
 
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About the author:
Alexandra DeFelice is senior manager of communication and program development for Moore Stephens North America, and a regional member of Moore Stephens International Limited, a network of more than 360 accounting and consulting firms with nearly 650 offices in 100 countries. Alexandra can be reached at adefelice@msnainc.org.

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