The economy has brought attention to accountability and performance management in the majority of firms, and accountability starts at the top.

Are your partners holding themselves accountable? Do they allow themselves to be managed, or are they continuing to operate as they always have? These are important questions, and ones that I see many firms avoiding for any number of reasons, most of which are myths and generally damaging to the firm. The answers to these questions determine both profitability and the ability to grow, as well as firm culture.

From surveys, we have learned that many firms don't conduct formal partner evaluations. No wonder these same firms complain about how they have no one to replace their older partners and are not developing succession plans that will ensure the growth of the firm and opportunities for younger professionals. In many cases, older partners are waiting too long to transition clients to younger professionals. This generally is not good for the client or the firm. Better-managed firms tend to have mandatory partner retirement ages in their agreements. Low performers are clearly the beneficiaries of accountability avoidance.

The reasons most often given for not holding partners accountable are:

1. It takes time and we are busy.

2. I am about to retire as managing partner and I just don't have the energy.

3. Our partners are making good money.

4. Our firm is very conservative. We don't believe in confrontation, and accountability causes confrontation.

5. Our partners are older and our culture is hands-off.

6. Our firm is very small and we are more like family.

7. Our firm is very large and there is already enough red tape.

8. We are a very progressive firm and we don't like to boss people around, especially our partners.

The common thread that runs through all of these reasons is that the firm (partners) obviously does not value firm management.

This is where leadership comes into play, and the leaders of the firm must step forward and provide direction, even if it isn't popular with one or more of the partners. In order to hold people accountable, management time is required and must become a priority. A common excuse of partners is that they don't have time to manage. Based upon firm metrics from 2009, there is plenty of non-chargeable time in the majority of firms. Firms were less than 48 percent chargeable in 2009. How better can they utilize this time than through improved management/accountability and training?

By not holding your partners accountable, you are promoting mediocrity, rather than excellence. According to a survey by Gartner Group, the return on training is five hours of increased capacity for every hour of training. It is not a secret that many partners could use more management training. We hear this consistently from managers who attend our P3 Management classes.


Firms have two basic options when it comes to underperforming partners: Address the issue and do something about it, or ignore the issue and hope that it will improve. Hope is not a strategy, and I can almost guarantee that performance will not improve without communication and focusing on changes in behavior. Most management problems in a firm are behavioral and not technical.

We see five primary reasons that cause partners to underperform:

1. They should have never been made a partner. In other words, the partner selection process is flawed.

2. The business of accounting has changed and the partner has not kept up - for whatever reason. There is a natural tendency to resist change.

3. The firm's vision has changed and the partner does not share the vision.

4. The partner has "burned out" for any number of reasons. Some partners will retire without telling anyone, and remain at the firm as long as they are allowed to do so while underperforming.

5. The economic model has changed and the partner does not have the skills to manage larger projects and people. Technology can often replace people who focus on transactional relationships, rather than the role of the trusted advisor. This often occurs in mergers.

None of the above reasons indicate that the partner is a bad person, but the fact remains that they are underperforming, and you must make a management decision to either ignore or address the issue, whatever the reason.

If you choose to address the issue there are some positive actions you can take, but they won't be easy and will require time and difficult conversations. The tendency in firm management, too often, is to avoid difficult conversations. If you have underperforming partners, the following steps will help address the problems in a positive manner, and the outcome will probably be in the best interest of the firm and the underperforming partner. At first, this may be hard to believe or understand, but in the longer term both the partner and the firm will be better served.

The steps are as follows:

1. Develop or update your firm's strategic plan, revisiting your core values, vision and mission statements. Define your strategic objectives and identify initiatives that will support the objectives. Set due dates and assign responsible parties.

2. Develop 90-day game plans for all partners, focusing on production, training, processes and client satisfaction.

3. Conduct 90-day accountability reviews and update your 90-day game plans. Performance evaluation is the responsibility of the individual partner, not human resources or the managing partner. Goals should be specific and measurable.

4. Utilize a partner evaluation system that focuses on leadership, management, strategic planning, team-building, learning and training, firm profitability, and asset protection. We recommend the use of 360-degree partner reviews. Partners have unique abilities, so don't expect everyone to perform equally in the above areas.

5. Develop a compensation system that directly rewards for performance and dramatically reduces the compensation of underperforming partners.

6. Make the hard decisions, if necessary, and counsel underperformers out of the firm.

This requires the leadership and management of the firm to focus on the problem and communicate directly and frequently with the underperforming partner. HR and legal should be apprised of the situation. With training and commitment of the partner, they can change, but many won't. This is where many firms err. They often wait too long to make a decision and act. Accountability is a process and not a slogan. Executing difficult decisions in a timely manner is part of the process.

Do what is in the best interest of the firm and the chances are very high that the decision will be a good one. Procrastination is your enemy.

Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.

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