Partners Can Be Complacent And Ego-Driven, But Their Success = Firm Success

Without the support of the partner group, MPs can’t move their firms forward. The realities of gaining consensus among hard-driving professionals with different working styles, skills and drivers can be more challenging than even the most insightful firm leader could anticipate. One MP says, “It’s like herding cats, and it’s very difficult to get all partners on the same page because not everybody has the same value proposition and not everyone is motivated by the same metrics.”

No MP owns a how-to guidebook on juggling the multiple – and sometimes competing – priorities demanding their attention every day. INSIDE Public Accounting, therefore, asked more than 70 MPs to offer anonymous insights on the frustrations, challenges, joys and rewards of the top job. In a 12-question survey, they offered unfiltered, candid insights. Here are responses to just a few of the questions.

What are two of your biggest frustrations with the partner group? Two themes – egos and complacency – immediately emerged from MP responses to this question. Some MPs say partners think their way is the only way. They fail to see the benefit of trying a different approach, close themselves off from other points of view, second-guess decisions (after failing to participate in the discussion), and stay in their comfort zone of client service without committing to professional development, marketing, timely billing and collections.

One MP said two or three partners are so negative “they’re like a cancer.” Some partners think they’re “too busy or too important to follow the rules,” says another.

However, with the success of the partners goes the success of the firm, and MPs are quick to acknowledge the massive amounts of work they handle, the numerous clients they serve admirably and the demands they address without fail.

Frustrations With Partners IncludeLack of Participation “They don’t speak up. When we need them to vote it’s like pulling teeth to get them to respond on time.”

Lack of Accountability “Partners like to measure others but don’t like to be measured.” Another MP says, “Too many of our partners are cruisers. Some of these, though, think they are dynamos and they aren’t.”

Self-Centered Thinking One MP is frustrated by “getting them to work together as a team, and not be so concerned about themselves.” Another says, “Partners think they are suited for all jobs because they are successful in one or two areas.” Another disappointment? “Partners who occasionally want to be MP, but only when they don’t like something specific but don’t want any part of the running of the firm on a daily basis.”

Hanging on When it’s Time to Retire “They seem to want to continue to come to the office, take up a large office, and distract staff and have no desire to step away. This can hold back some of the younger partners and potential partners.”

Failure to Use Time Wisely – A top-notch partner, one MP says, should “discuss issues with other partners when they arise and not behind their back, seek to interact more with fellow partners, be joyful in what you do and how you carry yourself, and help others at all times when asked.” Another MP comments that partners often complain about being overloaded with work. “As a result, they can’t hit their goals, or do this or that. What I find is that they’re not looking inside and prioritizing, pushing down or making good choices.”

“What’s the most valuable piece of advice you would share with an MP?…Don’t try to be popular, say many MPs who responded to this question. “You have to make what you feel is the best decision for the firm and don’t take unhappy partners or staff personally,” one MP says. “They will get over it.”

MPs, in various ways, advised new executives to make the tough decisions, but be respectful. Communicate clearly and often, and put the long-term best interest of the firm above selfish or short-term gains. Always.

More advice from the trenches…

  • Don’t Rush – “Be patient. Making changes is like moving a battleship so take it slow and do it right.” Another MP says, “Think more. Do less.”
  • Be Direct – “Establish up front that you’re not going to put up with negativity, complaining, etc., or they’ll be brought up before the executive committee.”
  • Think ‘Big Picture’ – “Communicate, communicate, communicate. There has to be someone in charge that creates the vision and rallies the employees behind it.”
  • Get Support – “Find four or five other managing partners or consultants that they admire and respect and build close relationships with them. That gives them a sounding board outside his or her own partner group. Other MPs are also great sources of new ideas that can be implemented.”
  • Learn the Role Before Taking It – “Just because you’re a good accountant doesn’t mean you know how to run a business.”
  • Watch the WIP – “If you don’t bill, you don’t collect money. If you don’t collect money, you can’t pay the bills.”
  • Manage Your Time – “Block off chunks of time to work on administrative duties and client duties. Constantly switching back and forth is difficult and draining.”
  • Stay Focused – “Work hard, never lose the trust of the partners who are willing to trust, and don’t let the naysayers distract you.”
  • Be Open – “Understand you need to learn as much as you can about how to work with different types of people.” Another MP agrees. “Get to know all your partners, and determine what really motivates them, and what is it that they care most about at the firm. Do not play favorites, and don’t allow little partner groups to form and break down the vision of the firm. Rather, bring their concerns to the table, and resolve them.”

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Restivo Monacelli Appoints Kevin Hundley as MP

Kevin Hundley

Kevin Hundley

Providence, R.I.-based Restivo Monacelli (FY18 net revenue of $7.2 million) has announced that Kevin Hundley has been appointed MP, succeeding Edmund Restivo Jr., who remains with the firm as a founding partner and will continue to service clients.

Hundley joined Restivo Monacelli in 2003 as a manager in the audit and accounting department, and was admitted as a partner in 2008. In that role, he oversaw the firm’s largest practice group and managed a growing team of professionals.

As MP, he will be responsible for the firm’s strategic direction and providing leadership on overall firm matters. Among his priorities are advancing exceptional client advisory service and building a strong culture so that the entire firm is engaged in Restivo Monacelli’s progress.

“Kevin will be an excellent steward as we evolve into a second-generation firm,” Restivo says. “His skills, leadership style and focus on promoting a client-focused and entrepreneurial environment will make him an exceptional managing partner who champions our vision for future growth.”

Hundley has more than 20 years of experience in public accounting. Prior to joining Restivo Monacelli, he began his career and was a manager in the Columbus, Ohio, office of Crowe.

The 2020 IPA Accounting Firm National Benchmarking Surveys are Open for Participation

The 2020 INSIDE Public Accounting (IPA) Annual Survey and Analysis of Firms is now open to all accounting firms in North America. The results of the annual survey are compiled in the IPA National Benchmarking Report. The data is also used to rank the IPA 100, 200, 300 and 400 firms, and the coveted IPA Best of the Best firms. If you would like to participate, please contact our office.

More than 550 accounting firms, ranging in size from $1 million to more than $1 billion in net revenue, participated in IPA’s 2019 Annual Survey and Analysis of Firms. All firms in the U.S. and Canada are encouraged to take part in one of the longest-running benchmarking surveys on accounting firm management.

Firms who would like to participate – at no cost – can contact IPA for details. Participating firms will receive an executive summary of the IPA National Benchmarking Report and will be eligible to be named a 2020 Best of the Best firm or an IPA Top 400 firm.

DEADLINES FOR SURVEY SUBMISSIONS – FIRMS WITH FISCAL YEAR-ENDS OF…

…May 2019 through December 2019: May 4, 2020

…January 2020 through March 2020: May 29, 2020

…April 2020: June 15, 2020

Note: IPA will not accept any submission after June 30, 2020.

THE 2020 IPA SURVEY AND THE INTERNAL OPERATIONAL SURVEYS ARE OPEN FOR PARTICIPATION

In conjunction with the National Benchmarking survey, IPA has launched the Firm Administration, Human Resources and Information Technology surveys. These surveys dig deeper into the operations and best practices of participating accounting firms across the U.S.

Your firm must complete the IPA Benchmarking Survey and Analysis form in order to participate in any of the internal operational surveys (Firm Administration, Human Resources and Information Technology). If you would like to participate, contact our office.

BENEFITS OF PARTICIPATION

If you fully participate in the survey, your firm will be included in one of the largest annual management of an accounting practice (MAP) survey in the country. You will:

  • Become eligible to be ranked among this year’s top firms in the IPA 100, IPA 200, IPA 300 and IPA 400.
  • Become eligible to be named an IPA Best of the Best firm.
  • Receive a complimentary copy of IPA’s August 2020 newsletter, which highlights the annual IPA 400 firm rankings, along with a detailed financial and operational analysis of the IPA 100 firms.
  • Receive complimentary imagery and press releases if your firm is named an IPA 400, a Best of the Best firm or a Fastest-Growing firm.
  • Receive an electronic complimentary copy of the 2020 Executive Summary of the IPA National Benchmarking Report. If you participate in any or all of the internal operational surveys, you will also receive a complimentary executive summary when published in the fall.
  • Receive preferred pricing on accolade reprints for marketing purposes.
  • Receive preferred pricing on the 2020 IPA National Benchmarking Report, the internal operational reports and other benchmarking tools.
  • Be given preference as a source for articles written by IPA throughout the year – an excellent opportunity to market your firm.
  • Gain a competitive advantage and grow your firm with industry insight from the independent benchmarking leader in the nation.

CONFIDENTIAL DATA – WHAT YOU CAN EXPECT FROM INSIDE PUBLIC ACCOUNTING

All confidential firm data, including salaries, compensation, income, etc., will be held in strict confidence and will NOT be shared or publicized in any of the final reporting. We take extreme pride in our ability to collect this data to assist the profession and are now celebrating nearly three decades of surveying accounting firms across the globe.

Please contact IPA at survey@plattgroupllc.com with any concerns or questions. IPA conducts a thorough review of each survey submission for omissions or errors and will reach out to the contact person named on the submitted survey form for any clarifications / updates. Some data, such as firm name, MP(s) name, firm net revenue and organic growth may appear in the IPA newsletter (if accolades are given).

Former Grant Thornton CEO Mike McGuire to Retire

Mike McGuire

Chicago-based Grant Thornton (FY18 net revenue of $1.87 billion) has announced that the former CEO, Mike McGuire, will retire in February.

McGuire served as Grant Thornton’s CEO from 2014 to 2019, transitioning to the role of CEO emeritus last August. He was succeeded in the CEO post by Bradley J. Preber.

One of his accomplishments during his tenure was improving firm culture and investing in a brand development program. Under his leadership, the firm added large clients, recorded record revenues and produced audit-quality results that are some of the best in the accounting profession, the firm says.

“Participating in this work as a teammate, partner and leader has been the greatest honor of my professional life,” McGuire says in a statement.

Preber adds, “Mike has been an outstanding colleague and leader for our firm – and a good friend to all of us – for the past 17 years. Without his leadership, we would not be the firm we are today, with a clear opportunity to compete and win at the highest levels of our profession.”

Before taking the helm at Grant Thornton, McGuire served in several leadership posts, including national MP of markets, industry, people and culture. He joined Grant Thornton in 2002 after 20 years at Arthur Andersen.

More news from Grant Thornton

HW&Co. Names New CEO and Merges In Finkler & Company

Brandon Miller

Brandon Miller

Cleveland-based HW&Co. (FY18 net revenue of $19.2 million) merged in Finkler & Company CPAs of Middleburg Heights, Ohio, on Jan. 1 – the same day that a new CEO took the reins.

Brandon Miller, president and CEO, succeeds John P. Fleischer, who has served in that role since 2014. Fleischer will stay on as a principal in the firm’s health care practice.

Miller started at HW&Co. as an intern in 1996 while a student at John Carroll University in University Heights, Ohio. Prior to being appointed CEO, he served in various leadership positions at the firm.

Commenting on the merger, Miller says, “Finkler & Co. provides HW&Co. the opportunity to expand our presence in Cleveland and adds to our expansive list of manufacturing and distribution, construction and real estate, and health care clientele. Gregg Finkler and his staff have exceptional talent and we look forward to integrating their staff into our team.”

The Finkler team joins more than 110 HW&Co. professionals serving clients across Ohio and the United States.

“We’re excited for the opportunity to partner with an organization with the resources and reputation of HW&Co.,” says Finkler, who founded the firm in 1988. Finkler will serve as MP of the Middleburg Heights location.

In addition to the Cleveland office, HW&C also operates from Beachwood, Westerville and Mentor, Ohio.

Denver-area Stratagem Joins Wipfli

Milwaukee-based Wipfli (FY19 net revenue of $362.5 million) one of the top 20 accounting firms in the U.S., announced its acquisition of Stratagem (FY18 net revenue of $9.2 million) of Lakewood, Colo., effective Jan. 1.

The deal adds 56 Stratagem employees to the firm’s Denver-area presence.

“Colorado’s marketplace is booming due to a high concentration of professionals, incubators and accelerators that encourage business growth, and significant venture capital investments in the market,” says MP Kurt Gresens. “As a firm that focuses on serving privately held businesses in a variety of industries, Wipfli views Colorado as one of our key markets for geographic expansion.”

Founded in 1983, Stratagem provides advisory, accounting and tax services to hundreds of privately held businesses and individuals in Colorado with focuses on serving construction and real estate businesses, nonprofit organizations, governmental entities and high-net-worth individuals. Stratagem was named one of IPA’s 2018 Best of the Best accounting firms because of its superior financial and operational results.

Stratagem CEO Paul Leroue says, “By joining Wipfli, a firm with a similar service philosophy and reputation, we will have access to the firm’s national resources and broader capabilities to offer our clients, while continuing to provide them with the personal service that they expect from our firm. It will also provide our employees with enhanced training and professional development opportunities as they progress in their careers.”

Wipfli first expanded into the Denver market in February 2018, when Denver-based Bauerle and Company joined Wipfli. Wipfli now has more than 2,400 associates and 51 offices.

More news from Wipfli

Sikich Expands into Washington, D.C., Area with Acquisition

Naperville, Ill.-based Sikich (FY18 net revenue of $168.7 million) has agreed to acquire Alexandria, Va.-based Halt Buzas & Powell (HBP), which just marked its 50th anniversary.

The deal, scheduled to close Dec. 31, marks Sikich’s entry into the Washington, D.C., and Baltimore metro markets and expands its presence on the East Coast.

“Adding the talented HBP team will strengthen our accounting, tax and audit services and advance our growth across the country,” says Sikich CEO Chris Geier. “HBP’s expertise in not-for-profit accounting and their outsourced CFO services complement our team’s strengths.”

HBP offers audit and assurance, business consulting, outsourced accounting, tax and information technology services to business across industries. The firm specializes in working with not-for-profit organizations and government contractors. It has specialized experience offering outsourced CFO services to public charities and trade associations.

“The synergies between our firm and the Sikich team will allow us to bring new opportunities to our clients and employees,” says HBP MP Andy Powell. “Much like our firm, Sikich places great emphasis on trust, integrity and commitment to client success.”

Approximately 50 HBP employees will join Sikich and continue to work from their offices in Alexandria and Crofton, Md. Powell and Marco Fernandes have been admitted to Sikich as partners.

This deal comes on the heels of Sikich’s acquisitions of Freyberg Hinkle Ashland Powers & Stowell, a CPA firm in Brookfield, Wis., Scanlan & Leo of Oak Brook, Ill., and technology consulting firm NexGen Consultants.

More news from Sikich

IPA’s Culture Assessment Reveals Blind Spots In Accounting Firms

After asking 2,000 firm employees to describe culture at their workplaces, a few generalizations emerged: partners view their culture more positively than most everyone else; respondents expressed low opinions about firm agility; and as firms grew, staff engagement decreased.

Kelly Platt

These were some of the findings from INSIDE Public Accounting’s 2019 annual culture assessment of 21 firms, ranging in net revenue from under $10 million to $100 million. Results, broken out by gender, years of service, department and job title, were outlined by IPA publisher Kelly Platt in a Nov. webinar.

While culture seems intangible, like an invisible glue that holds firms together – 12 core measurable qualities drive and define culture, according to IPA’s partner in the culture assessment effort, CultureIQ. The core qualities of culture are Agility, Alignment, Collaboration, Customer Centricity, Empowerment, Engagement, Growth Development, Innovation, Quality, Recognition Rewards, Trust and Integrity and Work-life Balance.

Culture may be best summed up by the answer to this question: “What does it feel like to work here,” Platt says, advising webinar attendees to ask staff to give a one-word answer to the question. IPA’s 2020 assessment, set for May and November, can help uncover the answers. The data can help firm leaders bring culture top-of-mind, develop a well-defined, positive culture, boost brand awareness and increase retention.

Platt focused her discussion on three of the cultural core qualities that are directly tied to profitability: agility, alignment and engagement.

Agility, the ability to sense and plan for change, scored low overall, Platt says, particularly among women and the administrative/support staff. Employees with more than 20 years of tenure at firms between $20 million and $30 million ranked agility lower than other employee groups, she says. The survey did not ask respondents why they scored any of the cultural qualities the way they did, Platt says, but firm leaders can use the data to uncover what is driving the lower scores.

Respondents generally gave alignment high scores, she says. “What does it mean to have alignment? In a nutshell it’s the bridge between the employees and the firm.” When firms are aligned, everyone is working together on firmwide goals, not just individual advancement. Equity partners as a group scored alignment “off the charts,” with 91% scoring alignment positively, but tax staff ranked alignment lower.

Using this data, partners can ask themselves, and their firms: “Why the disconnect?”

Engagement may be one of the most important aspects of company culture. Platt cites Gallup research that found 70% of U.S. employees are not coming to work fully committed to performing their best. “That’s a very powerful statement,” she says. She adds that 85% of employees quit because of their relationship with their direct manager.

Overall, the nearly 2,000 survey respondents scored engagement relatively high, and higher than data collected from other financial services firms by CultureIQ. Engagement dips in the largest firms, the assessment uncovered, particularly among firm professional staff and the 3- to 5-year tenured group, a vulnerable group that needs attention because they’re asking themselves hard questions about whether they want to stay in public accounting or move on, Platt says.

Some similarities emerged when it came to scoring empowerment. Again, all partners scored this quality higher than all other demographics. Women and the 3- to 5-year group, on average, scored empowerment the lowest of all 12 culture qualities. Women feel most empowered in the smallest firms and least empowered in the largest firms. Women are 11 percentage points behind male respondents in firms of more than $30 million.

Platt also touched on how employees feel about growth and development. The 3- to 5-year and 11- to 20-year group scored this quality lower than all other demographics in the 2019 assessment. Women scored the quality lower than men, and the administrative/support staff ranked growth and development the lowest of all employees. “This is an area of concern for the profession as a whole,” Platt says.

Innovation was scored far higher than Platt expected, with 76% responding positively. “I was shocked by that, that’s a huge positive change in the profession,” she says. However, as seen in other areas, the 3- to 5-year employees lag behind.

Leaders would do well to pay more attention to recognition and rewards, since it was the lowest-scoring core quality for all respondents, Platt says. Consistent with other qualities, the administrative and support staff, the 3- to 5-year employees, women and tax professionals all scored this area lower than others.

Surprisingly, work-life balance scored consistently among all assessment demographics, with 3 in 4 respondents scoring this quality positively. Platt attributes this to the investment in alternative work arrangements over the last several years is paying off. “We’re vying for good talent and to retain it, and we’re finding innovative ways to adjust to the needs of employees and clients.”

The data uncovered in the IPA Culture Assessment provides a basis for determining where firms are excelling and where they are falling short. She advises firms to survey their staff annually and create employee-led committees to make recommendations on how to improve on the existing culture. Although the tone comes from the top, initiatives that come from management are less likely to succeed than those that provide employees at all levels with a sense of engagement and empowerment.

In a tight labor market, the ‘you’re lucky to have a job’ management style is no longer working. Employees must look forward to going to work or they will work elsewhere, she says.

“Bring out the best in your staff, and you’ll bring out the best in your brand.” To understand the assessment results in more detail, download a complimentary executive summary.

The Excellence in Firm Culture Assessment dates for 2020

are for May 1-15 or Nov. 2-16.

 

 

Clarus Partners Merges with Blue & Co.

Columbus, Ohio-based Clarus Partners (FY18 net revenue of $6.3 million) has merged with Carmel, Ind.-based Blue & Co. (FY18 net revenue of $83.2 million).

The deal was completed Dec. 1. The combined firm will operate as Blue & Co., and Clarus partners Barry Adelman, Michael Stevenson and Matthew Kaufman, will join Blue & Co.

The combined staff of Blue & Co. and Clarus Partners will total more than 450 professionals in 11 offices across Indiana, Ohio and Kentucky.

“Expanding the Columbus, Ohio, office is a strategic initiative of the firm, and combining with Clarus will help us on the road to achieving that initiative. We believe the expertise and reputation of both firms complement one another and offer a friendly, client-first culture,” says Brad Shaw, managing director of Blue & Co.

Stevenson adds that he believes the combination will not only help expand the commercial market in the Columbus area, but also provide growth opportunities for the firm’s associates.

Clarus Partners was founded in 2007 and serves clients with a range of business services.

More news from Blue & Co.

Tate & Tryon Merges with RSM

Washington, D.C.-based Tate & Tryon PC (FY18 net revenue of $26.8 million) has entered into an agreement to merge with RSM US LLP (FY19 net revenue of $1.4 billion) on Jan. 1.

Tate & Tryon will focus on improving and increasing services to clients, who will have full access to RSM’s teams, resources, strong national and global brand and expanded services, including technology, management, financial, risk and transaction advisory capabilities.

RSM is the fifth largest audit, tax and consulting firm after the Big 4, according to INSIDE Public Accounting’s 2019 ranking of largest accounting firms in the nation. RSM has 11,000 people in more than 87 U.S. cities, four offices in Canada, and access to more than 41,000 people in 116 countries through the RSM International Network.

“As one of the first D.C.-based CPA firms to focus exclusively on serving the nonprofit industry, we have always aimed to be the best at helping our clients stay a step ahead to not only survive, but thrive, with strategic insights, services and technology solutions. As part of RSM, we can meet our clients’ needs even more comprehensively while providing the same exceptional service they expect and offering our people new opportunities for growth and development,” says Charles Tate co-founder and MP of Tate & Tryon.

“Tate & Tryon had several national and regional firms that wanted to enter into a deal with them,” said Allan Koltin, CEO, Koltin Consulting Group, Inc., who advised both firms on the combination. “While all firms were impressive, in the end, the leaders at Tate & Tryon were most impressed with RSM’s culture, leadership and the potential growth opportunities for their people. Both Tate & Tryon and RSM are already recognized as two of the preeminent firms serving nonprofit organizations in the Greater Washington, D.C. market, and this combination will make them an even stronger force in the marketplace.”

More news from RSM