Better Late Than Never

When I was in high school I trained for months to do one of those gymnastic moves called a “kip.” Try as I might I kept landing on my back, but despite the aches – not to mention embarrassment of looking like a beached whale flopping around – I persevered until one June day of my senior year I actually performed my first and only successful kip.

I harkened back to that exercise of near futility recently when I received a call from a CPA firm that I had been trying to get in and see for five years. Each year right after tax season I would place a call to the firm that ultimately went to voice mail and then followed up with an email that was opened and then, I can only assume, quickly discarded.

Needless to say I was stunned. They wanted our help with a succession plan as they had no one internally capable of leading the firm to the next generation. But as it turned out it was hardly a winning lottery ticket that just happened to fall into my lap.

For starters, the equity partners were what I can diplomatically call “beyond” normal retirement age. How beyond? Let’s just say each could remember when a gentleman named Jack Paar hosted The Tonight Show. For those unfamiliar with the name, he was succeeded as host of the famous nightly program by Johnny Carson. To put that timeframe in perspective, Carson began his 30-year run as late night king in 1962.

Second, the firm was vastly overstaffed and inefficient. How inefficient? Let’s just say they were dropping less than 20 percent to the bottom line. In the consulting business that’s what is colloquially referred to as a seller firm “with a lot of hair on it.”

Nevertheless I told them that with the right firm those obstacles could be overcome. I hope.

But this goes to a point we try to instill to attendees in every CPE session we teach. You can’t delay succession planning past the point where you even stop receiving mailings from AARP. Whenever I’m asked when firms should begin succession planning, I tell them from the day they open their doors. Since few rarely adhere to that strategy, ideally it should begin at minimum five to seven years from when one or more partners want to slow down from full time.

Because if  during the course of our conversation you tell me that Steve Allen or Jack Benny were once clients, it’s going to make for a great trip down memory lane. But by the same token also make my job a lot harder.