Research Results: How Firms Pay New Partners

Plus: 14 flaws of most comp plans.

By Marc Rosenberg
How to Bring in New Partners

Most firms are giving out raises of 10 to 15 percent when they promote senior managers to partners. But, of course, it’s not as simple as that.

MORE ON PARTNERSHIP: What Does Buy-In Buy? | How to Structure Partner Buy-In | Keys to Bringing in New Partners

There are essentially two the kinds of systems that firms across the country are using:

(1) The Formula and

(2) The Comp Committee. But let’s dig deeper into the data, which comes from

But let’s dig deeper into the data, which comes from The Rosenberg MAP Survey.
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7 Warning Signs for Your Firm

Man with head down on laptop keyboardIf it’s suffering these, a culture change is due.

By August Aquila

Accountability, according to the Merriam-Webster online dictionary, is “the obligation or responsibility to accept responsibility or to account for one’s actions.” Let’s explore what this definition means.

MORE ON LEADERSHIP FOR PRO Members: 6 Ways to Pay Partners | Work Together Better in 11 Steps | Drop Politics, Be Accountable | What Makes a Successful Strategic Plan? | Innovate or Die | Partners Love, Hate Leadership | 8 Ways Leaders Destroy Firms | How to Combine Two Firms after Merger: Carefully

First, there is an obligation. An obligation is a promise to do something. If a company has a financial obligation and fails to meet it, it may go into bankruptcy. If individuals fail to meet their obligations they also fall into a state of bankruptcy – i.e., failure.
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3 Questions to Evaluate Your Firm Culture

Silhouettes of three business partners talking against a window in an officeYou have to gauge this to effectively move toward partnership.

By Martin Bissett

This second C is a stormy and choppy one, often fraught with political icebergs but navigated diplomatically and with maturity, will lead you through.

MORE ON THE PASSPORT TO PARTNERSHIP: Learn to Read Your Firm’s Culture | 5 Ways to Get Buy-In for Firm Culture | Competence: More Than Technical Skills | Partnership: Competence Is Just the Foot in the Door | Are You Partner Material? Maybe Not

Case study on culture

Deborah had done well. She was bridging the firm’s culture gap and fulfilling its desire to be seen as an equal opportunities employer by becoming the practice’s standout rising star.
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How Many Partners Is Too Many?

Older businessman leaning back thinkingHint: probably fewer than you have.

By Domenick J. Esposito
8 Steps to Great

More often than not, CPA firms support too many partners relative to the firm’s revenue, profitability and its anticipated growth rate. That usually means, too, that the partners are doing a lot of work that could or should be done by staff.

MORE ON STRATEGIC PLANNING: Is Your Pyramid Upside Down? | Start with Sound Firm Governance, Economics | How to Develop Tactics for Your Strategic Plan | Taking a Balanced Scorecard to Your Partners | As Tax Season Ends, Strategic Planning Seasons Begins | The Big Eight: Harsh Realities for Firms Today | Seizing the $10 Trillion Opportunity | Learning to ‘Run with the Big Dogs’

Look at the average revenue per partner for the mid-market sustainable brands and you will see that the trend is to get more done with fewer partners, more staff and more effective use of technology.
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Learn to Read Your Firm’s Culture

Four young business people chatting outside office buildingBonus: 3 outlooks from our exclusive expert council.

By Martin Bissett

The Passport to Partnership study collated a number of responses from existing partners of accounting practices in a conversational style.

 

MORE ON THE PASSPORT TO PARTNERSHIP: 5 Ways to Get Buy-In for Firm Culture | Competence: More Than Technical Skills | Partnership: Competence Is Just the Foot in the Door | Are You Partner Material? Maybe Not

Examples that really stood out on the realities of individual variances in firm culture are showcased below.

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How Large and Small Firms Allocate Income

Dollar on Question MarkHow many of these 8 criteria does your firm use?

By Marc Rosenberg
Partner Comp: Art & Science

For purposes of this post, we will group CPA firms according to five different sizes:

MORE ON PARTNER COMPENSATION: Integrating Partner Comp with Strategic Planning Crash Course: Operating a Compensation Committee Partner Pay: Open vs. Closed Compensation Systems | The 3 Best Partner Compensation Formulas 11 Points in Designing a Partner Comp System | What Partners Earn and How They Earn It | Why Most Partner Comp Systems Are Performance-Based

  1. The Big 4. They are the ultimate of sophistication, running their firms as true, colossal corporations, regardless of their legal entity. Virtually none of this post relates to Big 4 firms.
  1. The Top 100 firms, excluding the Big 4. The 100th largest firm was $33 million in 2015.
  1. Multipartner firms from $15 million to $33 million.
  1. Multipartner firms from $5 million to $15 million.
  1. Multipartner firms below $5 million.

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