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September 30, 2023

If You Are a Partner in an Accounting Firm With No Succession Plan, You Are the Problem

Among the colossal misconceptions that many accounting firms make is that there is a lack of talent to succeed the generation of owners and partners. We've talked about this in the past and the problem is that the "talent" desired is not real. Back here in the present, people are still worried about succession and still wondering when someone else is going to step up:

The percentage of multiowner firms with succession plans has decreased. Despite the aging of the CPA profession and the fact that four years have passed since the last [AICPA Private Companies Practice Section] succession survey, firms seem to have made little progress formalizing and implementing succession plans. Almost half of leaders of multiowner firms said they are developing initiatives to hand more work to lower-ranked members of their staff, but some said staff members aren't prepared to handle important tasks.

You hear that, people who might want to be partners one day? YOU AREN'T READY. Maybe if you accepted the fact that accounting firms have been run a certain way for the last three decades and you simply agreed to foolishly continue running firms in a similar fashion for three more decades you might ascend to the lofty heights of partnership, but until then, there will be doubts.

This is, of course, stupid and what's even stupider is that it seems that a lot of partners aren't even trying. It's like they're so sure that younger professionals are going to screw things up that they can't trust them to do anything:

Instead of managing and developing new business, partners at CPA firms are performing too many tasks that should be handled by lower-ranking staff members, according to Bill Reeb, CPA/CITP, CGMA, the CEO of the Succession Institute, which administered the succession survey in partnership with the PCPS. (See the sidebar "Strategies for Succession" for other experts' suggestions for firm leaders to effectively transition into retirement.)

"If you take a four-person firm and the partner does 80% of the heavy lifting, when they leave, there is nobody to pass the work off to, and there's nobody that has the technical capability to do it," Reeb said. "There is no succession plan."

Are these partner so self-loathing that they're going to work themselves to death? Take a chance, accounting firm partners! That young and hungry manager can take some of that work off your hands. Yes, it's a risk to relinquish some responsibility to younger professionals who might be in over their heads for awhile, but guess what? They'll live! It'll be fine! Your stupid firm will go on and you can relax a little.

This is so simple, it's embarrassing. Promote a few people, you morons.


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