Don’t Try This At Home

I’ll have to admit it took a bit longer this year than in the past, but apparently getting three extra days to finish up the stockpile of 1040s has put most people at least a week or two behind with regard to preparing their firms for the rest of 2016.

Case in point: last week I spoke to a three-partner firm in the Northeast whose owners’ ages are, in ascending order, 55, 62 and 68. And perhaps to no one’s surprise, least of all mine, they have no one on the bench to assume the reins when the older partners begin to slow down. Their technology is, to be kind, about a decade past a much needed upgrade  and their revenues have been either stagnant or falling (depending on the year) for at least the past five years.

Perfect, an ideal candidate for an upstream merger, an aging firm that with the help of a larger practice with greater resources and expertise could slowly begin to resurrect it.

Wrong.

One of the partners told me that they had a meeting last week and decided their solution was to…wait…to hire a young CPA who can step in!

In fact, they discussed retaining an executive recruiter to help them with just that.

I could have phoned this one in.

I calmly told them, that it was a sound strategy except for one or five minor details that obviously had been overlooked.

First, there are about 50,000 CPA firms across the country in search of the exact same type of candidate – with about 49,990 of them being a more attractive place to work than their antiquated practice.

Second, for the sake of argument, let’s say they are successful in hiring a younger CPA – with or without a book of business. Do they know if he/she is “partner ready” with the requisite skill set to assume an ownership role? If not, how long until they are?

And lastly and perhaps more importantly, what happens when the older partners begin to slow down. No matter how talented a candidate they or anyone else brings aboard, they won’t have the capacity to take on their work as well as the work of the exiting partners.

My argument was greeted with a muted “Oh.”

My advice was to play both ends, let the headhunter try and find you someone and at the same time, begin the process of meeting potential successor firms.

He promised he would speak to his partners about it. That’s accountant-speak for another month or two of unproductive meetings and my guess is that they’ll stubbornly stick to the hiring strategy.

I’ve learned that when it comes to accountants, you can’t count on anything, but the one absolute certainty is that I’ll have a few more discussions about this before the end of the year.