Here’s what you’re looking for: Succession Institute

There’s a lot to consider whether merging up, down or laterally.

By Bill Reeb and Dominic Cingoranelli

Although we find that an internal ownership transition often can be your best bet, a merger makes sense in many cases. So, if this is the direction you are heading, we’ve highlighted some of the issues below that we think you ought to consider, with the first one being to really take a close and hard look at the compatibility of the organizations courting each other.

MORE ON PERFORMANCE MANAGEMENT: How to Compensate Your Managing Partner | The Job of Managing Partner: Empowered or Emasculated? | How the Best Managing Partners Turn Ideas into Reality | Make Accountability a Process | Accountability Requires Clear Expectations | Base Retirement on Today’s Operations

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Who Is a Likely Candidate for a Merger?

If you are going to consider a merger, which firms would seemingly be a good fit for your practice – i.e., your clients and your employees and if, applicable, partners?  The better the fit, the more likely you will be able to retain clients and employees, and the greater the chance for overall success of the merged firms.
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How firms are balancing base salaries against billable hours.

By Bill Reeb and Dominic Cingoranelli

The managing partner should have a compensation plan unique to that position focused on carrying out the strategic and tactical objectives of the firm.

MORE ON PERFORMANCE MANAGEMENT: How to Elect a Managing Partner … and How to Fire Them | Why Accountability Falls to Managing Partners | How to Implement Strategy, Step by Step | How to Decide Who Decides Pay | Accountability Includes Partners | Succession Plan Requirements | How Retired Partners Are Robbing their Own Firms | 4 Ways to Create More Capacity | Partner Retirement and the War for Clients | Succession: The Questions to Care About | Hazards of Not Reallocating Equity

Exclusively for PRO Members. Log in here or upgrade to PRO today.

While there can be some individual performance goals assessed, the bulk of the managing partner’s incentive package and focus should be on overall firm performance. The key here is that you don’t want an incentive system for the managing partner that is overly focused on individual goals because the real value of this position is in driving firmwide change.
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And why a five-year term is ideal.

By Bill Reeb and Dominic Cingoranelli

Often, firms elect a managing partner with a majority vote, but to dismiss a managing partner within their elected term requires a higher vote, commonly two-thirds of the equity vote. In some larger firms, the people running for managing partner might not be eligible to vote in this process, but in many others, everyone can vote.

MORE ON PERFORMANCE MANAGEMENT: The Job of Managing Partner: Empowered or Emasculated? | How the Best Managing Partners Turn Ideas into Reality | Make Accountability a Process | Accountability Requires Clear Expectations | Base Retirement on Today’s Operations | How Involved Should Retired Owners Be? | How to Find a Partner’s Replacement

The reason why everyone should be allowed to vote is simply that the smaller the firm, the more likely that removing the candidates being considered for the position puts too much control in the minority ownership of the firm. For example, consider the following six-partner firm scenario:
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