Are They Partner Material or a Lifetime Employee?

Not long ago I was discussing internal succession with the managing partner of a firm in the Midwest. During the course of the conversation, the elephant in the room emerged when I asked point blank if there was anyone on his bench who could step up to an equity role and be part of the succession team.

He thought about it for a while and said there was a long-time employee who could conceivably assume partner status. He’d been with the firm nearly 20 years and had performed well. But admittedly there was one serious roadblock – he was not credentialed.

This was a moment I like to call “windshield reality” – where the verbal effect can often mirror the impact of being thrown through a car windshield in an accident.

I told him in no uncertain terms that the candidate has made a commitment only to being his employee, not to the accounting profession or else in two decades he certainly could have found the time to get his CPA certification.

He thanked me for my analysis and went on to admit him anyway. I would be interested to see where this firm is in say, five years.

Aside from “what’s the multiple?” one of the more frequent questions I’m asked is what qualities constitutes partner material? Now, there’s no blanket answer for that one, as obviously the circumstances surrounding the admission of a new partner will vary from firm to firm.

But I’ve taken the time to compile a short checklist on some of the characteristics of evaluating potential candidates for an equity role.

1. Client Management: Can manage an expected level of client relationships profitably and effectively; has a loyal following of clients.
2. Personal Productivity: Is personally productive in producing services to clients at the level expected by the firm.
3. Growth: Is able to develop new client relationships and expand services to existing clients at a level expected and required by the firm to grow.
4. Technical Skills: Has developed the technical skills necessary to provide exemplary service to clients; ideally is known as an expert in an important area of service both within the firm and to the outside community.
5. Teamwork: Puts the firm’s interests ahead of their own interests; promotes a team attitude.
6. Professional Involvement: Is involved in the profession to promote the interests of the firm.
7. Communication Skills: Excels in both written and spoken communication skills.
8. Personal Investment: Strives to continually improve is willing to invest the time necessary to advance their skills and is open to input from others regarding their need for improvement.

Now obviously this is not all an “all or nothing” list when vetting someone for an equity role, but if said person in a 20-year employee without the CPA acronym following his/her name, then it’s probably advisable to re-evaluate your strategy.