As previously discussed, making partner at a Big 4 firm is no small feat. It takes years of work, some political savvy and luck. When you finally get a seat at the big table, you discover that everything leading up to that point was simply the beginning. Now that you’re calling the shots, you have big responsibility, be willing to resist temptation, and try to keep employees happy. Not an easy task but that’s why they get paid the big bucks, right?
But forget all that. Partners, as we know, are owners. They have an equity stake in their firm and have a say in how the firm should be run. Or do they have that say? One Deloitte partner, a twenty year veteran of the firm, reached out to us recently to express their concern about the upcoming election of new leadership at the Green Dot:
I’m an audit partner with Deloitte. Don’t want to bore you with the fact that I love the firm, and I am a die-hard D&Ter. But, all firms have their faults, right? Even Deloitte. While we tout and sell “Good Governance” strategies – our own governance process is severely BROKEN.
What many may not know is that Deloitte has an election year happening in 2011. Yes – Sharon Allen is off to retirement [Ed. note: PARTY! – Oh sorry, this is serious], and so is Jim Quigley. No tears for them…they have very rich retirement packages that will keep them wealthy for decades to come.
We’ve already been through our “Nominating Committee” process, where all the partners are able to be interviewed by committee members and submit nominations of individuals that they would like to see in different leadership roles. The elected individuals are the Chairman, the CEO, and a CEO “Alternate.” The CEO “Alternate” is there in the event that the CEO elect is also elected as the Global CEO (which will typically happen).
We’ll jump in here to make a quick point: our tipster reiterated to us that (s)he loves Deloitte and the motivation for reaching out to us is due to his/her commitment to the firm. (S)he even admitted that reaching out to GC seemed odd but clarified it to us this way, “It is akin to someone that loves their country and wants to improve upon it because we know we have the right to speak out and improve our country. Right now, our election process at Deloitte is broken.”
ANYWAY:
The thing that angers many partners – but few voice this concern – is that the Nominating Committee Process and the “election” of the Firm’s leadership is a farce. The “independent” Committee comes up with their recommended candidates after hearing the soundings of the partners. I should add that Committee is selected by the Board and Management. There is no “election” to approve the Committee. Then the Committee comes to a conclusion on ONE set of recommended candidates, and the Board approves that recommendation (shocking). Then, the partners get to vote “YES or NO” on the “slate” of candidates that is advanced. This “election” occurs in late February/early March. The leaders must be installed in June. So what if the partners said NO? What would the leadership team do then?? Guess what – they don’t care! Because they know the partners always say YES! It is so painful. And nobody is willing to challenge this process. Because – you have three camps of partners. (1) the camp that doesn’t care and never will because it “doesn’t affect my daily life; (2) the camp that is so rich in the number of units they have, they wouldn’t upset the apple cart because they make too much money to want to risk it even though they know it is wrong, and (3) the younger partners who fear retribution of having their “heads cut off” for speaking up.
Jumping in again – we spoke to a former Deloitte partner, who confirmed the broad details of the process and also the widely-held notion that the election process is a “farce.” This former partner also confirmed this is a feeling held by many partners, especially the freshly minted ones. In addition to the fear of retribution, he said that younger partners also feel apathetic, being of the mindset that the “nominating committee won’t listen to me” and they are being given “lip service” by leadership. Further, for many young partners, simply joining this exclusive club is exciting enough that few pay attention and, oh yeah, they have TONS of work to do. As for the “gray-haired partners,” our source confirmed their attitudes as well, saying that there would be little motivation to speak up when they are “riding out their careers” or have a lot vested with the firm already.
Getting back:
The thing is that these leaders represent our firm, manage our firm, and control our collective destinies. They also rig the elections. And they then tout, continuously, the importance of the “Sense of Partnership.” The truth is that Deloitte is not run like a partnership. Yes, the partners have capital at risk, we are owners of the “Firm.” But, we are not appropriately represented. We lack a true collective voice. We keep quiet for the “good of the Firm.” And, we are now going to embark on a new “BOLD LEADERSHIP” move that is being done to passify all the various interests of our firm (Consulting, Audit and Tax). The thing is – we don’t attempt to have our partners select the BEST leaders – but simply the leaders that a select few believe fit a set of criteria that are BEST for us ignorant partners. It’s a bit like the government telling us what is good for us.
It angers me. And, I wish that I could wake up every Deloitte partner and have them realize this. But – if I did this – I’d likely be fired. So, I’m sending this to you to see if you can help WAKE up our Partners!! They should VOTE NO to the nominating committees recommended leaders. We need to take back our firm, much like the American voters took back our country.
[Signed,]
An anonymous Deloitte partner who cares deeply about our Firm and our culture.
Our “anonymous Deloitte partner” speculated that 75% of partners share his/her feelings on this. What’s been the catalyst to all this frustration? Well, the former Deloitte partner we spoke to said that it’s a partly the nature of the governance process itself but it has been made worse by how leadership handled layoffs and the economic crisis during 2008-2009. As you may remember, Deloitte leadership admitted that the May ’09 layoffs were handled poorly last spring, however, morale amongst partners remains extremely low.
Just to add a few more things from the “anonymous Deloitte partner” – when we asked about the details of the nominating process, the response we received was that while it was a “cordial” and that the partners that serve on the committee feel as though they are doing “God’s work,” but ultimately it is a “falsehood.” The former Deloitte partner confirmed this, who told us he had a friend who served on the nominating committee who joked with him about flying around the country, “listening to crap,” throughout the exercise.
When we asked about the firm’s leadership considering a more democratic process (i.e. partners are nominated by vote), that doesn’t appear to be on the table because another firm does it that way, “In situations where our CEO has been asked about the process, Barry Salzberg stated that our firm doesn’t want a divisive culture where certain partners get their feelings hurt in a race for the CEO spot or other positions. ‘That’s not part of our culture. That is what PwC does, and we don’t want to do that.’ “
Stepping back from all this (we realize it’s a lot), if we were a run-of-the-mill Deloitte partner, it be pretty difficult to see this as an equitable process. As we said at the outset, being a partner means having a say in how the business is run. Granted, when you’re talking about a firm as large as Deloitte, there has to be centralized leadership but wouldn’t you want a direct voice in determining who that leadership is and not simply up or down on a list of names handed to you? It sounds like a lot of partners at Deloitte are feeling shut out of this process. Maybe some don’t care but many new and aspiring partners probably do (Millennial attitude and all) and this lack of true representation will certainly make some think twice about their long-term careers with the firm.
Wouldn’t it be something if a firm chose the other way to retain talent? “What other way?” you may ask: Fix what’s broken about the whole profession and business model!
Plan ahead, staff, equip, and train your employees so 80 hours weeks crunching stale, boring numbers are the exception rather than the norm.
For some reason the dinosaur firms can’t get this. Maybe after the partners have to eat into their profits enough, they’ll give that other avenue a try. For now, the most they can do is the old “throw more money at them” move. It’s not going to work so well when other, more attractive industries offer so much more for the employee’s time and effort.
The 80 hour work weeks are done on purpose. I was not in Assurance so I am speaking from second-hand knowledge here; but I was under the impression that it’s only parts of the year that they are working crazy hours? If so, how does the firm balance out staffing so that if they hired up for busy season, how do they balance it out during the non-busy parts of the year where they don’t have staff sitting around doing nothing?
The partners never have to think about aptly responding to changes because well performance is based on favoritism and not merit.
I have been at the same small to mid-size firm for over 30 years. I have never be rewarded monetarily, or any other way, for my time or my loyalty. I perform audit, review, comp, writeup, corp, partnership, NP, individual tax projects, along with heading up client accounting software implementation and training. I am a well rounded, experienced senior accountant who works independently and without a lot of supervision. Because I am not a CPA I am not able to be placed in a management position within my firm. However I know more in the way of accounting than most, if not all, than the incoming hires that come in as college graduates that have passed their CPA exam and need to get their hours in for certification. I do my work, I do it well, and I do whatever I can to better the firm. Sounds like I’m patting myself on the back but this is not the point I’m trying to make.
What bothers me now is a concern that these green individuals are hired with signing bonuses, and salaries that match close to mine, and they have ZERO experience. They bring them in as staff, and after 1 year, already they are dubbed Senior, and after 2 years, most make Supervisor. Now they make more than I do and still can’t do any analytical work on their own or prepare a simple tax return without a hand hold. They are put in a niche department and placed on a pedestal, and are not trained to be well rounded accountants. Why you ask? Because the firm doesn’t want to lose the young CPA who may leave you to flit from one firm to another. Ridiculous money and benefits thrown at them so they are retained. It has become the Big Game.
I say to all firms out there, look at your longtime, loyal, experienced staff, and reward them accordingly, as once they don’t feel appreciated, they will be gone, and you won’t have anyone left that can pick up any type of accounting / tax project and run with it, without a lot of hand holding and overseeing.
Or offer the BENEFIT and PROMISE to the new young talent, that you will train them to be well-rounded. Place them for a time, in every department within the firm, so they can do anything, and learn to actually love what they do in this industry. Keep it interesting and challenging, instead of offering up a droll niche of accounting procedures to perform day in and day out. No wonder they leave!
Not explicitly called such, PwC’s “targeted skills bonus” announced during the firmwide webcast on 9/30 has essentially played out to be a retention bonus, paid across all levels at the discretion of office/practice leadership. Due to be paid 3/31/2022 for those who want to stick around through another busy season. Conversations started taking place a couple weeks ago for those who were “targeted”.