Building an Accounting Firm... to last

This week I saw an ad for a merger between mid-sized accounting firms. And it got me thinking...

Great professional service firms are able to grow into great businesses. This may require merging practices from time to time. The Big 4 accounting firms are a great example, having merged their way into an oligopoly for their market (serving public companies).

For many accounting (and legal) firms, survival of their business beyond the second (or first) generation of partners hardly ever happens. In my opinion, while the founding partners may be great rainmakers and are able to build their empire by themselves, they are not able to transfer responsibility and clients to the next generation.

Which is really a shame. We speak to a number of practising professionals that after a significant period of time with their firm, are looking to change their employer. They tell us that even though they enjoy their current firm, they are looking to leave because they do not see room to grow. They are afraid their senior rainmaker partners will eventually retire or pass on, without giving them the opportunity to become a senior rainmaker themselves. So these solid professionals leave to greener pastures, usually leaving the weaker ones to stay behind and close the lights.

Retention of professionals in a firm starts with giving them real opportunities for growth, and not being afraid to transfer knowledge, know-how and clients. Successful senior partners should be hitting the golf course often when they hit 55, giving their team members opportunities to shine.

The senior partners I know that are enjoying their years as they move to (or beyond) retirement, have a team of smart, dedicated and competent people running the firms that they built. Their firms are built to last. Is yours?