Why today 1 in 5 firms links client loss with payout reductions.
By Marc Rosenberg
Many things have changed during the history of the CPA profession. Twenty or more years ago, the majority of firms valued their goodwill at one times fees and at the same time, had a provision in their retirement plan to reduce the goodwill benefits of a retiring partner if her clients left when she exited the firm.
By contrast, today the average goodwill valuation is roughly 80 percent of fees, and only 20 percent of firms have a provision that links client loss with benefits.
Let’s analyze each of these two changes.
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