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Heather Townsend and Jo Larbie, co-authors of “How to Make Partner and Still Have a Life,” explain the eight golden rules to achieving this potentially lucrative step.
Golden rule 1: Hit financial targets. The first rule of being a successful equity partner is covering your costs and share of the overheads; this is the very minimum expected. It is the equity partner’s responsibility to make sure that their team’s client work adds value to the firm through profit. Failure to meet your targets as an equity partner normally leads you to embrace the change to pursue avenues outside your current firm.
Golden rule 2: Grow your practice. Partners who don’t grow their practice will not progress up the equity ladder, so business development needs be a top priority. As a director or senior manager, you may have already demonstrated your potential in this area, but as an equity partner it is essential to frequently and consistently devote time to business development related activities. A partner without a following (except a highly valuable technical expert) is regarded as a “glorified director” who is vulnerable when times get tough. An equity partner cannot solely rely on other partners to generate and bring in work.
With many firms routinely expecting their partners to source referrals for other departments, an equity partner needs to make time to get to know the other partners; what they do and have to offer. The rule here is: “do as you would be done by.” You can’t expect referrals from other partners if you’re not prepared to do the same for them. It is important that partners share information on their capabilities with each other: formally at partnership meetings; via internal communications, such as newsletters, email and blogs; and informally around the beverage machine.
Golden rule 3: Develop your team and others. In our view, you can get to partner purely on your own merits. However, to make it as a successful equity partner, you need to have a strong team behind you, and time should be taken to develop everybody’s capabilities.
Passing on your knowledge and experience also ensures that you have a backing of capable people to whom you can confidently delegate work as your practice expands. If you’re going to hit the profit targets you have committed to deliver, doing all the work yourself may not be an option! Generally, in our experience, fee earners are always keen to work for a partner who involves and develops them.
Golden rule 4: Identify and develop your potential successors. It doesn’t seem quite right in an article about becoming an equity partner to talk about finding and developing your successor; however, a good equity partner will do just that. If a practice is going to remain profitable and sustainable in the long term, there needs to be good talent in the pipeline at all levels; ready, able and willing to make the next step up.
Golden rule 5: Be politically savvy, but not “political.” Anyone who has spent time in a partnership will know that there is a complex system of egos, constituencies, issues and rivalries. Even the best-managed firm suffers from internal politics spurred on by strong personalities, sensitivities and empire protectors. Equity partners, who are politically savvy, accept and deal with this environment by considering the impact of what they say and do to others. Being politically savvy allows them to work with other partners and get things done without triggering unnecessary negative reaction.
Golden rule 6: Have a plan and strategy for your part of the practice. One of the first things that we do when working with a practice is to ask for the following: plans for the business, i.e. marketing, attracting and retaining talent, plus a strategy for general growth. Some of these plans will be the responsibility of a firm’s support departments or management board, but a successful equity partner will have translated, aligned or cascaded their version from the firm-wide plans and strategy.
Too many equity partners either don’t have the focus or clarity that these essential plans can bring, or hold too much knowledge in their own head. This leads to wasted time and resources. To achieve many of the golden rules we have spoken about in this article, successful equity partners will need the discipline and diligence to plan, communicate, monitor and review their business, marketing and people plans for their part of the practice.
Golden rule 7: Look after yourself. With all the pressures and strains that an equity partner can handle on a daily basis, stress and long working hours are often the norm. Not the best way to maintain good health! Your team and other equity partners require you to be at peak performance. It’s a sad fact that far too many partners in accounting firms die prematurely from conditions that have been brought on or exacerbated by their work lifestyle. If you are going to enjoy the fruits of your labor long after you retire and work at peak performance, then you have to actively look after yourself.
Golden rule 8: Build your influence within the partnership. Any successful equity partner will have taken the time to build their network and influence within the partnership. Whilst technically all the partners are “in it together,” this is not always the case, and there are always differing views on how the partnership should achieve its goals. By putting in the effort to build a strong internal network, an equity partner is able to have a greater influence over how the practice is run while finding it easier to achieve their own particular goals and objectives.
Heather Townsend helps professionals become the “go-to” expert. Along with Jo Larbie, she is the author of “How to Make Partner and Still Have a Life,” and the author of the award-winning and best-selling book on networking, “The FT Guide to Business Networking.” They both regularly blog at “How to Make Partner.” Jo Larbie helps firms to successfully deliver business goals through developing their people. She is a leading thinker in the world of talent management for professional service firms with extensive experience in business and leadership development. Jo has been personally responsible for many hundreds of professionals taking the step up to partner.