Advisory | | Oct 06, 2021
Every accounting firm goes through a lifecycle in which partners approach the end of their careers and emerging leaders take on their responsibilities and relationships. When properly managed, this can create a win-win-win situation.
The partner can retire with peace of mind, a rising professional advances in his or her career, and the organization benefits from a seamless transition in leadership without compromising the level of service delivered to the customer.
Of course, this isn’t as simple as it sounds. Several things need to happen to make a successful changing of the guard possible:
- Partners approaching retirement need to be able to let go and pass down what they know to the next generation.
- Younger professionals need to be assertive in recognizing these opportunities, articulating their intentions, and backing up those intentions with hard work.
- Organizations need to work with both senior partners and rising professionals to facilitate these transitions and communicate the benefits to all involved.
Let’s break this down a bit and discuss some of the obstacles that get in the way of a smooth transition from the retiring partner to the next-generation leader.
Demonstrating Aspirations and Work Ethic
During an interview on our podcast, I asked the managing partner of a law firm how she landed her first job. She said that she put on a business suit, printed a stack of resumes, went to the top of the Empire State Building, and worked her way down until she was offered a job.
When I was a young professional interviewing with the partner of an accounting firm, they would ask me where I saw myself in five years. I said, “In your position.”
Today, when I ask the same question to some members of the younger generation, they say, “I want to work as little as possible but make as much money as possible.”
As someone who rose through the ranks the old-fashioned way, this irks me a bit. While there are exceptions, too many young people seem to be content to show up and go through the motions while expecting unearned compensation increases.
Not only was I willing to work hard to move up the ladder, but I was willing to go somewhere else if those opportunities didn’t exist at the firm where I was working.
I’m not saying the younger generation doesn’t have a work ethic, but like many things their definition seems to be a lot different than mine. They seemed to be more focused on working smart, which is great, but if you want to be a leader and advance in your career, you have to work smart and hard.
In addition, those who do work hard and aspire to be partners almost never step up and voice their intentions. They don’t seem to have the confidence and recognize opportunities created when older partners approach retirement.
What ever happened to being a self-starter? When did initiative become a bad thing?
Nothing would make me happier than having a rising professional approach me and say, “When a partner retires, whether in my office or somewhere across the country, I want that role. Tell me what I need to do to prepare.”
Successful people understand the rewards of hard work. They’re not afraid of hard work. What organizations like Prager Metis need is for these individuals with a strong work ethic to express their desire to join the next generation of partners and leaders. We as an industry must find a way to encourage this.
Demonstrating the Benefits of Becoming a Partner
Part of the reason why so few young people express their desire to become partners is that management and partners have done a poor job demonstrating the benefits of becoming a partner.
A partner is perceived as all work and no play, with endless hours sitting at a desk in the office. It’s a stereotype of a lifestyle that people would not want, especially younger generations who value the kind of work-life well-being I discussed in a previous article.
The reality is that partners typically live a good life. Just like rising professionals should be assertive and voice their goals and aspirations, partners shouldn’t be shy about showing what they’ve been able to achieve in life.
When I was a junior accountant, the managing partner of the firm would host company parties at his home. I remember taking a look around and thinking, “I could get used to a life like this.”
Partners tend to have comfortable lifestyles including nice homes. They’re able to retire securely without financial stress. They have the means to support causes that are important to them and set aside money for their kids and grandkids.
I’ve always considered a partner at an accounting firm to be a working-class professional. I realize we’re not breaking our bodies when we go to work, but we’re working hard at what we do. It’s a profession that has helped lift a lot of people and families to a better place.
We as leaders just need to do a better job communicating this to younger generations, who should be willing to work hard to step into the role of partner and excel.
Implementing a System to Enable Seamless Transitions
Ultimately, it’s up to the organization to prepare partners for retirement, find replacements for those retiring partners, and make sure the partners’ responsibilities and relationships are handed off to the next generation.
Succession planning and mentoring are certainly part of the equation, but understanding the psychology involved with preparing for the day when a partner walks out the door is important.
At Prager Metis, we want younger generations to come forward and tell us what they want to achieve. We have those opportunities and want to fulfill their aspirations if they’re willing to put in the work.
As part of this process, we’ll provide rising professionals with experience managing client relationships. We’ll give them opportunities to solve problems.
Most importantly, we’ll allow them to fail. You learn far more from failure than success, and every successful person had a mentor who allowed them to fail, learn from the experience, and become better.
When a partner is preparing to retire, the partner, their successor, and the organization all have important roles to play to facilitate a smooth transition. All three need to work together to make it happen.