Partner Accountability Begins With Firm Strategy

Partner accountability is a concept that most firms grasp, yet few accomplish properly. Accountability should start with the following hierarchy:

  1.  Identify the firm’s strategy.
  2. Develop a clear understanding of what is expected of each partner (individual goals), both subjective and objective, that are drafted by the line partners but modified as needed and approved by the MP.
  3. Provide a significant compensation stick the MP can use to affect the desired behaviors, and;
  4. A willingness on the part of the MP to financially reward partners who do what is expected and punish those who don’t, up to and including termination, if they act as an anchor to almost every initiative.

As soon as we mention the above process, the response is usually, “Okay … this makes sense, but tell me how to implement this strategy.” The answer? “It is hard to do when the most significant information in the process – identifying the firm’s strategy – is missing.” For example, take the common scenario that your partners are spending too much time working in the office and not spending enough time in front of their clients.

Based on experience, firms could be much more successful addressing an issue like this by shifting their strategy to incorporate several approaches.

  •  Stop partners from spending so much time doing lower-level technical work.
  • Require partners to spend more time with clients to be more visible and thereby creating more opportunities for the firm to assist those clients (business generation).
  • Require partners to spend time training, coaching and mentoring staff to improve the technical competence of the group so that more difficult technical work can be delegated to them.

Now that these approaches are outlined, let’s look at how they might be reflected in an accountability process. The MP should solicit input from each partner before finalizing the partners’ individual goals. For the above example, you might see the effort below from the MP to drive the individual partner goals:

  •  Create a matrix of key clients and require visits by each partner to the clients they manage. The partner(s) are required to make these visits, gather specific information based on a predefined process, report back to the MP (this also could be monitored by the marketing committee, or the marketing director), update the client relationship management (CRM) system, and strategize regarding likely future opportunities or resources required to adequately service these clients.
  • Work with each partner to determine clients to be moved to other partners or staff.
  • Work with each partner to identify clients that need to be removed or reconditioned in order to continue to be serviced by the firm (this could be rate/realization, collection, one-off engagement or one of many other issues).

The Compensation Stick

The partner compensation system is an essential way to drive accountability. It is here that you want to set up rewards to motivate the partners to do what they decided as a group to pursue for the firm’s strategy.

So, if doing a better job at training and mentoring is part of the individual partner’s strategy, then you have a clear behavior for that partner to get paid. When you say you want one behavior, but pay for a different behavior in your compensation system, you will get the latter behavior. Put your money where your mouth is.

If you assume that a partner’s total compensation is $300,000, then we suggest that the goals for this individual partner make up about 15 to 20% of his/her total compensation. Conservatively, this would amount to around $45,000, which you could break up into $15,000 increments for accomplishing the goal assigned related to each of the bullet points above.

In the end, partner accountability is simple. You must:

  • Be in a position to review, monitor and hold each partner accountable.
  • Be willing to identify, define and share expectations with each partner.
  • Have metrics to provide the appropriate rewards or punishments for the actual behavior demonstrated by the partner group.
  • Monitor and coach the partner group to help maximize earnings.
  • Have the authority and responsibility to do this.
  • Be willing to do the job – the good, the bad and the ugly.

Lessons Learned

The most important lesson learned: When a partner will not work within the system, when he/she cannot put the firm first, and when he/she is a boat anchor to every suggested change, the partner group must have the guts to let these people go.

If you find yourself in this place, you will find that accountability is not that hard, but rather is simply good management, adopted by all. Good luck!  

Copyright ©2010 Succession Institute. Bill Reeb, CPA, CITP, is a nationally recognized management consultant with almost three decades of experience specializing in assisting firms work through practice management, succession and leadership development issues. Bill frequently keynotes at national conferences and has been recognized by many organizations as one of the top consultants to the profession, with IPA listing Bill as one of the Top 10 Most Recommended Consultants. You may contact Bill at bill@successioninstitute.com; (512) 338-1006, ext 102, or at www.successioninstitute.com.