Years ago if you asked partners in a local accounting firm what was the biggest problem facing the firm, you probably would get similar answers from most. The biggest problem for these firms was finding and retaining seasoned experienced professionals. This wasn't a temporary situation, but one that went on for a number of years.

The solutions that were tried included the offering of flex time, greater use of part-timers, higher salaries in some cases, and the offering of partner status to keep experienced staff from leaving.

And therein lies the seed for what, I think, after talking to a number of partners in accounting firms, is the new No. 1 problem. In that process of naming new partners to keep experienced professional staff, different levels of partnerships were created with varying amounts required for buy-ins, and with varied equity ownerships. The overriding consideration appeared to be an incentive program and "golden handcuffs" to ensure retention.

I believe there that was not sufficient attention made to the capital contributions of those individuals to the firms and their potential to bring in new business.  The argument could be made that many smaller firms had no choice in the matter. But the outgrowth is that a typical firm might have three partner types. One that is near retirement and might be just coasting, those that have been partners for a number of years and who are bringing in the bulk of the business, and finally, partners for only a few years, many of whom probably came in under relaxed standards.

The problem is that the middle group of partners often feels they are outnumbered, money is being drained out by retiring partners, and the new partners are not making or even expected to make a significant contribution to the growth of the firm.

One option being considered by these high-producing partners is the demise of the firm, usually through a merger with a larger firm. Another possibility for those partners is leaving and taking the majority of their book of business with them. However, the reaction that I most commonly see from these partners right now is simply an unhappy realization that a problem exists.

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