CPA INSIDER

How to achieve partner unity

Managing an accounting firm is a team sport.
By Cheryl Meyer

Gregory Porter, CPA, co-founder of Berntson Porter & Company PLLC, in Bellevue, Wash., knows the value of teamwork. Years ago he played football as a defensive tackle for the Washington State University Cougars, where he was named to the National Football Foundation & College Football Hall of Fame Scholar-Athlete Team. Later in life, he co-founded his own public accounting firm, which has now grown to 19 partners and 110 employees. His firm's partners, much like his former teammates, he said, want to win and embrace one another's successes, but also support each other through failures.

Creating partner unity, he noted, is "not a whole lot different than sports. If your goal is to grow 10% to 15% per year or retain a level of profitability, you can't do it unless everyone is pulling on the same oar."

How should partner unity be defined? "It's an agreed-upon set of values," said consultant Steve Erickson, CPA (inactive), who specializes in resolving partner and people issues at accounting firms. It's about partners giving "unanimous approval of any program or venture or decision," said Porter. And, according to Gary Adamson, CPA, president of Adamson Advisory, a CPA practice management consulting firm based in Centerville, Ind., "It means realizing that my personal views may not always win," but that the betterment of the firm takes precedence.

There's a lot of buzz these days about partner unity, and the importance of establishing cohesive firm leadership. When partners are on the same page, firms propel forward, as opposed to remaining stagnant. Growth, in turn, can help firms attract and retain coveted employees, since the chances of promotions increase. (One of the first things "the young people we're hiring out of universities want to know is, 'Where is this bus going, and do I want to be on it?,'" said Adamson.)

In firms lacking such unity, partners may operate in silos instead of as team players. They may exhibit passive-aggressive behavior, or they may stop improving their work, thinking that goals and performance measures don't apply to them. And partners in these firms often distrust their fellow owners, said Erickson. These factors can cause staff turnover, internal discord, and loss of revenue. "There's a direct correlation between partner unity and trust and profitability," he noted.

Firms can take practical steps to increase partner unity. Erickson, Porter, Adamson, and Rita Keller, president of Keller Advisors LLC, a CPA management consultant in Dayton, Ohio, share their best tips:

Choose the right leadership. Some firms choose managing partners out of a sense of obligation. But choose leaders not only for their longevity, but also for their drive, interest, and desire to turn your practice "into a golden company that has huge growth opportunities," Porter advised. The right leader can help unify the remaining partners.

Formalize partner selection. Establish a thorough process for partner selection. At Berntson Porter, employees apply to be considered for partner and then participate in a path-to-partnership program (known as the Principal Path Program), Porter said. "There's a lot of coaching that takes place," he noted. "We don't take everyone, and at the end of the program we vote on whether or not [someone] will be made partner."

Establish regular avenues for communication. If your firm is small, partners can and should meet at least once a month, Keller said. Due to potential scheduling conflicts, midsize firms with eight to 15 partners should meet at least quarterly and hold unofficial lunches (with no minutes taken) in the odd months. Every partner should speak up in these meetings, and healthy discussions and disagreements can be positive. The point of these gatherings is to communicate and "report on management activities and items, and where a consensus is needed they build consensus," she noted. "When partners don't meet, communication suffers and you can see a firm slowly sink into a silo-like culture. Hearsay becomes commonplace."

Also, hold a partner retreat annually, she suggested. This gathering is a great time to discuss the firm's upcoming goals.

Partners can also use a retreat to resolve old disputes and improve tense relationships. "If the issues are difficult or overly emotional, hire a professional facilitator or mediator for assistance," Erickson advised. "This effort will create the foundation needed for partners to participate in improving your firm."

Follow the same path. Each partner's goals and efforts should reflect the firm's direction and strategy — and what is expected of partners should be defined early on. "All partners should know the goals of all the partners, which also encourages collaboration," Adamson noted. "Understanding what accountability means between partners is key."

Keep gripes behind closed doors. It's not good practice for partners to stay silent in meetings and then grouse later. "Speak up in the meeting and not in the hallways," Keller advised, recommending that partners avoid venting later to employees not involved in the decision-making process.

Partners also need to accept decisions made by the partner group, whether or not they agreed with them. "Grumbling outside of your own partner group is just a recipe to make your firm extremely undesirable," Porter said. "It's a cancer that infects the entire firm."

Develop a decision-making process. Don't throw an issue on the table and watch partners react and wrangle. Instead, put a practice in place for making key decisions. "I suggest that firms develop a decision matrix for each essential operational position in the firm, which defines the decisions that will be made at that specific level," Erickson said.

That's exactly what happens at Berntson Porter. For instance, partner compensation decisions start and end with the firm's executive committee, while decisions about who is admitted into the Principal Path Program start with the two founding partners and president (also a partner), but end with equity and income partners and the chief operating officer.

"The decision-making process starts at the highest level appropriate (or as defined by our LLC agreement), and trickles down to the appropriate final consideration level (or as defined by our LLC agreement), requiring consensus at each successive level," Porter said. "Regardless of where the final decision takes place, there is transparency of the issue and the decision to the entire principal group, and where appropriate, the employees through our monthly 'fireside chats.'"

Establish a performance-based compensation system for partners. Ensure this system is linked to your firm's strategy and goals, and if necessary, incorporate leadership training and coaching for partners. "Did Tiger Woods have a coach? Of course he did," Adamson said. "Why should we be any different? We can all perform better."

Cheryl Meyer is a freelance writer based in California. To comment on this article or to suggest an idea for another article, contact Courtney Vien, a JofA senior editor, at Courtney.Vien@aicpa-cima.com.

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