Law Firms Mull Canceling Partner Payments to Boost Liquidity Amid COVID-19 Concerns

As the COVID-19 pandemic has already caused one U.K. law firm to cancel partner payments, a U.S. legal consultant is advocating a similar move for other firms.

Leaders at Gateley, one of six publicly listed law firms in the U.K., announced via the London Stock Exchange that shareholders would not receive their March 31 dividend of 2.9 pence per share, The American Lawyer reported. The move is designed to “maximize the group’s short-term liquidity,” the firm said. Gateley’s share price dropped from 222 pence per share to 122 pence per share in two weeks.

The statement continues that activity has reduced since March 1 as a result of the disruption “caused by the COVID-19 pandemic to our clients and to our staff.”

In the same publication, a legal consultant encouraged law firm leaders to consider deferring payments to partners to ensure financial solvency.

Hugh Simons writes that the move will instill confidence in partners that management’s top priority is the financial viability of the firm. “How am I so confident about this? Because I was directly involved in deferring partner payments in the wake of the dotcom crash; we never regretted the move.” Simons formerly served as a senior partner at The Boston Consulting Group and COO and policy committee member at Ropes & Gray.

His suggestion: “If, thanks to the timing of your financial year, you’ve not paid partners their most recent profit share, then it behooves you to withhold it.” He also suggests telling partners through a series of conference calls rather than in a group email since the intention is to assure partners and answer all questions thoroughly.

“On balance, mid-July, with appropriate wording about flexibility to possibly defer further in a mechanism yet to be determined, is probably the way to go,” Simons explains, noting that payments deferred until July 15 will coincide with the new tax filing deadline. “Disasters only happen when you run out of options; preserving cash preserves options.”

Let us know what you think about this.   What are your plans?

Send us your thoughts.

 

Alexander Thompson Arnold Names CIO

Alan Watson

Alan Watson has been appointed to the newly created role of chief information officer at Union City, Tenn.-based Alexander Thompson Arnold (FY18 net revenue of $26.6 million).

Watson previously served as principal consultant at Digital Simplicity and EVP-CIO of ChanceLight Behavioral Health, Therapy & Education. He was also awarded a Citrix Innovation Award for excellence in collaborating, networking and virtualization for his work creating customized learning resources in a secure, highly regulated environment.

“As ATA continues to grow and evolve, we saw a need to position ourselves as an innovative accounting firm that uses technology to create a strategic advantage for our firm and our clients,” MP John Whybrew notes on the creation of the CIO position.

More news from Alexander Thompson Arnold

KPMG Names Rick Arpin OMP in Las Vegas

Rick Arpin

Rick Arpin has been named OMP of KPMG’s Las Vegas office and is now responsible for its strategic direction and market growth.

“Rick Arpin brings more than 25 years of strong leadership and experience providing audit services to public and private global corporations in a broad array of sectors, including gaming, hospitality, entertainment, retail and sports,” says Mark Hutchins, KPMG’s Pacific Southwest regional MP. “Rick’s deep commitment to serving our clients, developing our people and making a difference in the Las Vegas community makes him the perfect fit for the managing partner role.”

“I am honored and I look forward to working with our tremendous team of partners and professionals across the firm to help our clients adapt and thrive in today’s environment, whether driven by economic forces, changing customer patterns, disruptive technologies or the rapidly evolving regulatory environment,” says Arpin.

Arpin arrives at KPMG from NRT Technology, where he served as senior vice president of its interactive division. Prior to that, Arpin spent 16 years with MGM Resorts International, holding several key leadership roles.

More news from KPMG

Create a Wow Factor Workplace for Remote Employees: Ways to Nurture Employee Engagement

When you create a culture of ‘wow,’ it makes a powerful impact on all employees – including the growing number of people who work away from the office. Deb Boelkes shares a few of her best practices for inspiring and empowering your remote workforce.

In 2020, there’s a good chance at least some of your employees work from home, a coworking space or some other distant location. And while the arrangement has benefits for all parties, the trade-off is that remote workers get far less (if any) face time with leaders and coworkers. This may lead you to wonder: Can you truly engage remote employees? Is it possible to shape a positive company culture that encompasses everyone?

Boelkes says yes – and the solution lies in your ongoing pursuit of the “wow factor.” This is her terminology for those “Best Place to Work” leaders who consistently motivate and inspire employees, fill them with purpose, challenge them, and make them feel safe and supported.

“Many companies don’t work to deliberately shape a positive culture,” says Boelkes, author of The WOW Factor Workplace: How to Create a Best Place to Work Culture. “They think it will just happen, but that’s rarely true even when everyone is in the same place. And if a company has remote employees, the need to get intentional about culture-building is intensified.”

Engaging remote employees comes down to making them feel like they belong and are part of a cohesive team. They should feel valued and understand that their contributions are seen and appreciated, and that they are making an impact. That’s job No. 1.

Boelkes says there are plenty of simple engagement practices that make your virtual team members feel supported, connected and empowered.

Make sure remote employees know why they’re there. All employees should know (and embrace) the mission, vision, values and objectives of the company. They are a big part of how you convey the sense of meaning and purpose that’s so vital to engagement. Talk about these guiding factors explicitly and regularly. These things can change and when they do you need everyone in the loop. Additionally, make sure remote employees understand how their work aligns with and supports goals of the company, division and department.

“All team members need to know what they do really matters and that their efforts ­– and results – make a difference,” says Boelkes. “Acknowledge them in the way they prefer to be acknowledged.”

Never leave them hanging or assume they know what’s going on. This is vital, says Boelkes, especially regarding decisions made at upper levels. The biggest complaint most large or multi-site companies hear from employee satisfaction surveys is lack of communication from senior leaders. Don’t be a micromanager but do communicate, communicate, communicate…and be consistent in your messaging from the top down.

Make yourself available (on their timetable). Managers need to make sure meaningful one-on-one conversations with remote reports happen. Out of sight (and off-site) should not mean out of mind or out of the loop. Be willing to be flexible versus forcing employees to adapt to your schedule and communication style.

“Find out what works for your remote reports,” says Boelkes. “Some team members may prefer to establish a fixed time each week to catch up while others may prefer to call in for a quick update as project schedules permit. Let the employee know when you will be available and how they can get a message to you if it’s critical. Otherwise, be there for them.”

Be proactive about removing their roadblocks. If something is preventing a remote worker from being able to do their job efficiently, make sure they know to immediately come to you. In fact, ask them regularly if they need anything. It’s the manager’s job to remove any obstacles impeding team members’ efforts and to get them the resources and information they need.

Bring all team members together often. If possible, have an all-hands, on-site meeting at the start of a major project or at the beginning of the fiscal year. At the very least, schedule weekly all-hands team calls to update everyone on what’s going on, to see who needs help, to announce major accomplishments and recognize team members, and to brainstorm new approaches.

“Team members need to know each other,” says Boelkes. “They need to know what the other members are working on, and how they can help one another. They need to trust each other. Regular meetings can help achieve all of that.”

Remember: face to face matters, so make it happen however you can. You may not be able to meet in person often, but try to make it happen at least occasionally. And of course, conferencing technology like Zoom, WhatsApp or FaceTime can be incredibly valuable in helping remote employees connect and engage with the rest of the team. “Observation of facial expressions and body language can be just as important as hearing the words being spoken,” says Boelkes.

Don’t let meetings become time-wasters. Call meetings only when necessary and keep them succinct. When preparing for a remote team call or video conference, ask individual members ahead of time what, if anything, they want to present, what they want to hear or learn, and if they have anything to share. Then stick to the agenda.

Encourage team members to connect with one another regularly. “Feeling like part of a team is vital,” says Boelkes. “The boss doesn’t have to be the one who coordinates everything. Make sure they feel free to text, phone or email each other when they have questions or need guidance or feedback.”

Pair new employees with a “buddy.” Newer employees need more hand holding – especially if they’re telecommuting. Among other training, the buddy’s job is to make sure the employee knows who does what on the team, who is an expert at what, and who to go to for what.

Be sensitive to cultural differences. Not everyone interprets communications the same way. Cultural differences can occur regionally within the same country but may be especially problematic between major geographic regions and countries. If this occurs, managers must really listen for understanding, then reframe and restate what they heard, and ask the remote worker to do the same.

“Managing multi-country team members can be difficult if members never have on-site meetings over multiple days during which people can get to know each other,” says Boelkes. “When possible, it’s helpful to know locals or expats who are from the remote region and can interpret what may be intended or how things could be interpreted in various situations.”

Occasionally, oversee employee/client interactions. From time to time, managers should try to participate live when an employee has important events with a customer or client; listening to the clients’ feedback is just as important as employee feedback. While it is important to show trust and confidence in the team members serving the client, it is equally important to acknowledge when things need improvement or when action must be taken.

When in doubt, reach out. If things aren’t feeling right with an employee, they probably aren’t. Meet in person for a heart-to-heart off-site and talk through their concerns or problems. And again, as a general rule try to get together in person at least once a year if not quarterly; these meetings keep the lines of communication open.

Request feedback (from your customers AND your remote workers). During one-on-ones with each remote employee as well as during one-on-ones with clients, ask for honest feedback. Then based on that feedback, strategize ways the organization could better leverage the skillsets of the team members while moving the organization closer to its goals.

Know when an employee isn’t suited for remote work. Pay attention to signs that an employee is not cut out for being a remote team member. For example, they may frequently turn in work late, get distracted or lose sight of the project at hand, or need frequent interaction with coworkers.

“Some workers need daily live interaction to do their best work,” says Boelkes. “Be attuned to this and don’t be afraid to make changes to ensure the employee is in the right environment with the needed support and/or freedom.”

Finally, make sure every employee knows you have their best interests at heart. Be a heartfelt leader.

You can’t inspire anyone – in-house or otherwise – until you start leading with your heart,” concludes Boelkes. “Check in with your own passion and make sure it informs all of your interactions. Your heart-driven engagement will spread to your workers near and far, and together you will make a difference.”

February 2020 Transformation Survey: Employee Transformation

“Transforming while performing” is the mantra of firms today, ensuring current performance while re-tooling and re-engineering the firm for the future.

In February, IPA began gathering information on staff transformation in a mini-survey series. Here are a few results from the 49 respondents, mostly MPs, firm administrators and human resources leaders.

What does employee transformation mean for your firm?

1) Increased Technology Training

2) Cultural Changes

3) Focused Retraining / Reskilling Firmwide

4) Hiring Staff with Talents Beyond Traditional CPAs

5) Updating Firm Processes

6) More Clearly Defined Firmwide Strategy

7) Accelerating Advancement Opportunities for Staff

8) Firm Structural Changes

9) Rethinking who can be Admitted to Equity Partnership

10) Flattening / Changing the Traditional Organizational Chart

Currently, where is your firm in the process of employee transformation?

1) Exploring Options and Needed Changes

2) Have Implemented Plans in Some Departments

3) Creating a Plan, But Have Not Implemented Yet

4) Have Successfully Implemented a Firmwide Plan

What specific skills / changes are needed to meet the challenges your firm is facing?

1) Increased Firmwide Innovation

2) Increased Employee Engagement

3) Career Development Coaching and Advice

4) Cross-Functional Collaboration

5) Increased Agility

6) Redesign of Firm Processes

7) Increased Technical Skills Firmwide

What metrics / indicators does your firm use to track your transformation efforts?

1) Profitability Metrics

2) Employee Retention / Turnover

3) Employee Engagement

4) Productivity Metrics

5) Positive Behavioral Changes (firmwide)

What challenges is your firm facing in the process of employee transformation?

1) Lack of Clear and Defined Strategy

2) Partner / Owner Resistance

3) Unavailable Talent

4) Cultural Resistance

5) Financial Constraints

Tab Bradshaw Joins Anchin as New Leader of Redpoint Cybersecurity LLC

Tab Bradshaw

New York-based Anchin Block & Anchin (FY18 net revenue of $102 million) has hired Tab Bradshaw as COO of its affiliate, Redpoint Cybersecurity.

Redpoint provides security, digital forensics, incident response and cybersecurity transformation services.

Bradshaw is a senior strategy and technology executive with over 17 years of experience in cybersecurity, leading consulting engagements and working closely with design teams. Prior to joining Redpoint, he was principal of cybersecurity at a large management and technology consulting firm. While there, he specialized in helping government clients ensure that information, assets, technologies and data were adequately secured.

As businesses grow, so do the risks of cybersecurity threats,” says co-MP Russell Shinsky. “Tab’s ability to address complex cybersecurity challenges and solve problems related to cyber threats and attacks across industries strengthens Anchin’s advisory service offerings.” He adds that Bradshaw’s expertise covers the intelligence, aerospace and defense, homeland security, health care and financial services sectors.

Redpoint offers Offensive Security Certified Professional (OSCP)-certified penetration testers, or ethical hackers, who approach companies as an attacker would. The Redpoint team also provides incident triage and investigation support, recovery and remediation, threat hunting, simulations and security awareness training, attack visibility and analysis, and cloud security consulting.

More news from Anchin Block & Anchin

CliftonLarsonAllen Opens Southern California Office

CLA (FY18 net revenue of $954.6 million) has opened a new office in Irvine, Calif.

The Southern California office will serve several industries, including real estate, construction, private equity, financial institutions, and manufacturing and distribution.

“We have been serving clients in this area for many years, and we are eager to create more opportunities with our fast-growing team,” says Randy Wells, managing principal of CLA’s Southern California offices.

In addition to Wells, CLA leaders who will be working out of the Irvine office include:

  • Greg Barragar, principal, manufacturing and distribution
  • Manny Trelles, principal and director of real estate transaction services
  • Lisa Adams, principal, financial institutions and manufacturing and distribution
  • Tanya Valle, principal, construction and real estate
  • Jim Merk, managing director of brand and marketing
  • Paul Chon, director, real estate
  • David Novak, director, construction and private equity

More news from CliftonLarsonAllen

Ernst & Young LLP Announces Jeremy Vaughan as Cincinnati OMP

Jeremy Vaughan

Big 4 firm Ernst & Young announced that Jeremy Vaughan has been named the new OMP for Cincinnati, effective April 1.

Vaughan, who will succeed Julia Poston upon her upcoming retirement, will lead approximately 400 professionals in the Cincinnati office.

“With Julia at the helm, the firm established itself as a go-to resource in the Ohio Valley to address today’s business challenges. As Jeremy steps into his new role, we have full confidence he will continue to lead our clients and people through today’s transformative age,” says Julie Boland, EY vice chair and MP for the U.S. Central region. “Jeremy has a long history with our firm and is passionate about not only growing our local markets and industry sectors, but also the professional development of our people.”

Poston, who started her career in 1982 as a staff auditor, retires in June with a legacy that includes numerous leadership positions, including the Cincinnati/Dayton, Ohio, OMP, assurance leader for the firm’s Ohio Valley region and the Central Region Center for Board Matters leader, as well as being a member of the firm’s partners advisory council and other committees.

“I am honored to have the opportunity to lead the Cincinnati office and hope to further the significant and impactful initiatives Julia led,” Vaughan says. “Fostering a strong environment for professional development is extremely important to me and for the EY organization. It gives our employees the chance to continuously learn and grow in order to better serve our clients.”

Vaughan, based in Cincinnati since 2010, has deep experience in business transformation, restructuring and process improvement projects in the consumer sector. Vaughan is a leader in the EY organization’s U.S. and global consumer sector teams.

More news from Ernst & Young

KPMG Selects Paul Knopp as Next CEO

Paul Knopp

KPMG has announced that Paul Knopp will serve as the Big 4 firm’s next chair and CEO for a five-year term starting July 1, while Laura Newinski has been elected deputy chair.

Knopp, a 36-year veteran of the firm, leads several of the firm’s most complex global audit engagements. Newinski, vice chair of operations, has held several leadership roles in the tax practice of the New York-based firm, which reports FY18 net revenues of more than $9.46 billion. The KPMG partnership ratified the election of Knopp and Newinski on March 2.

Laura Newinski

Knopp and Newinski will succeed Lynne Doughtie and P. Scott Ozanus, who have served since 2015 as U.S. chair and CEO and deputy chair, respectively. Both will retire later this year. Doughtie previously announced that she would not seek a second term.

“I have had the pleasure of working closely with Paul for many years, and I can attest to his values-based leadership,” Doughtie says in a statement. “He is a thoughtful, confident and decisive leader who inspires people at all levels. Laura is a proven leader who has a long and successful track record driving operational excellence, transformative change and growth for the firm.”

Knopp says it is a pivotal time in the firm’s history. “We have a tremendous opportunity to bring value to our various stakeholders through our one-firm approach during these transformative times.”

Knopp has served leading global companies in the manufacturing, life sciences, transportation, professional services and technology industries. He has served on KPMG’s board of directors, including serving as lead director.

Newinski joined KPMG in 1988. She is responsible for technology and financial matters for the firm and oversees its operations. She also serves as COO for KPMG’s Americas region. Prior to her current role, Newinski served as the national MP of KPMG’s U.S. tax practice and also held other regional leadership roles for the practice.

“The best part about working at KPMG is our remarkable people,” Newinski says. “Our people serve our clients with excellence, support one another and their communities, and find solutions that have impact.”

More news from KPMG

Modeling The Right Behavior When Deadlines Are Tight And Stress Is High

Jim Proppe

Jim Proppe

Accounting firm leaders are expected to motivate their tax teams to succeed and deliver excellent customer service all year, but the runup to April 15 is particularly challenging for everyone involved.

With more work than hours in the day, tax season is inherently stressful, and tons of hours are inevitable. With April 15 ahead of us, what lessons can be learned so MPs, partners and other leaders can keep everyone on task throughout the year, lower stress and care for themselves at the same time?

INSIDE Public Accounting asked for insights from Jim Proppe, MP of Southfield, Mich.-based Plante Moran and Larry Autrey, MP of Fort Worth, Texas-based Whitley Penn.

They say that the idea of work-life “balance” is different for everyone, but anyone in a supervisory position should learn what works for them, practice self-care and show staff what that looks like. If managers or partners are exhibiting stress through difficult behaviors, it does not go unnoticed.

Larry Autrey

Larry Autrey

“It does have an impact,” Proppe says. “If the team sees you on overload it cascades down and they start experiencing the same thing – whether it’s true or not.” It may even derail their partner aspirations. “We need to make sure that we’re letting them see how much fun we are having,” he says.

Here’s how both Proppe and Autrey, leading hundreds or even thousands of employees, take care of themselves and their teams when the stakes are high.

Ask for Help – At Plante Moran, each partner can lean on two peers who serve as an advisory team, helping the partner set goals, prioritize and develop plans to improve. “The advisory team is very entrenched in what the partner has going on throughout the year, so they can be an outlet when the partner is on overload,” Proppe says. Additionally, each staff person is assigned a partner as a mentor or coach to help find a customized solution to blend the personal and professional. “It’s a big investment of time, but we think it really pays off, we really do,” Proppe says.

Step Away – MPs encourage staff to schedule time off, not just hope a break will pop up. They do the same. For Proppe, it’s scheduling down time just like any other appointment, except “those are written in ink – they’re not moving – the rest of it is in pencil.” When Autrey was in college, his dad would suggest a long drive to de-stress. It stuck. Today, Autrey grabs an iced tea and although the drive from Fort Worth to Houston is for work, “by the time I get back I’m good.”

Flex, But See the Downsides – “No one says when you come in and when you leave in this profession – at all levels,” Autrey says. “To me, flexibility takes away the stress.” Autrey says the reality is that tax season is far less stressful than it used to be. “For better or worse, staff are saying to us, ‘We’re not working like you did when you were a staff person,’ and we’ve had to build the firm around that.” The danger is, it can mean more work, and more burnout, for managers and partners. “We’re all trying to keep an eye out for those people,” he says. The tax team management meets every Monday and shifts work around to ease the overload. At Plante Moran, one of the dangers for staff is feeling they can’t take time off since PTO is not set, it’s flexible. Proppe says his biggest fear is staff taking too little time off.

Beware of Post-Tax Season – Proppe says the biggest disconnect for staff is not during tax season, but in late April and May. The expectation is 40-hour weeks, but often they need to work more to catch up on the work put on hold.

Accept that Tax Work is Not for Everyone – Autrey says tax season was his favorite time of year, and that’s still true for many on his 300-member tax team. “Those people do well in the profession.” Some leave thinking they’ll lower their stress with a job in industry, say in a controller job, but they find there’s a ‘tax season’ at the end of every month to close the books. Autrey also left public accounting, but returned in three months. “I’ve got the illness, it’s terminal. I love every bit of it.”

At Plante Moran, staff members who are unhappy can work with their partner to find a different office, or different job within the firm or within industry. The only ‘failure’ is when a staff member announces a departure unexpectedly. “This profession is not for everybody,” Proppe says. “It’s exciting, I love it, but it’s not easy.”