State boards should add a new tenet to ethics and licensing rules.
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Nathan Garrett, a former president of the National Association of State Boards of Accountancy, is calling on his beloved profession to make prejudice and racial discrimination a matter of the profession’s ethics code and licensing rules.
Are you building a business or buying a job?
Eckelkamp
Hoisted from Comments: In “The Profession’s Four Biggest Dilemmas,” I talked about succession, staffing, commoditization, and the information glut. Here, Joe Eckelkamp at Eckelkamp and Associates in St. Louis, submits his take on succession.
– Rick Telberg
I’d add one more dilemma for any firm that has a hard time identifying itself apart from its ownership, and that is: What would happen if you ran off and joined the circus tonight (so much less morbid than “died in a car accident”)? The solution is one I struggle with myself, even though I focus on it often. The obvious solution, a practice continuation agreement, is often difficult to achieve.
As you know, I firmly believe (pun intended) that until CPA firms start running themselves like the real businesses they are (and like the Big 4 has done at least since I joined E&Y way back in 1980) instead of “collectives” or confederations, they’ll forever face at least the first two dilemmas you identified. Making hiring the right people the firm’s current leadership’s single highest priority and then putting in place a structure that allows them to become leaders as they grow, with or without ownership, is absolutely essential for all but the very smallest of firms (1-3 professionals, including the owner[s]). There are outstanding people out there who just have no interest at all in being owners but who are absolutely outstanding leaders.
Those who have transitioned from upper management in industry to a CPA firm normally expect addressing this to be needed. It’s firms formed almost solely to create job(s) for the principal(s) that face the hardest decision. Over time their mindset shifts from seeing it as their job and start seeing it as an opportunity to sell (which should not a dirty word) the asset they created. None of this is necessarily a bad thing; just a different paradigm.
I was at a roundtable where the owner (who I respect a lot) of another $500,000 to $1,000,000 firm actually said he planned to just give the firm to the employees at retirement. As we talked, it was obvious he hadn’t considered that as giving away $1,000,000 that would otherwise have gone to his kids and that the employees might not want ownership.
