Managing an accounting firm is not an easy task, due to the nature of the ownership and the fact that, too often, everyone thinks that they are in charge.

But in reality, no one really has the power and control to lead and manage effectively. The majority of firms have a managing partner in title and responsibility, but often without the authority and power to lead effectively and efficiently.

Accountability and discipline are the keys to improving performance and growing the firm. I believe that most people’s intentions are good; however, often they get caught in the day-to-day tactical issues and fail to focus on the big picture or strategic goals.

Let’s look at the key areas in evaluating your managing partner. The areas should also be part of the managing partner’s job description. The primary areas are:

  • Leadership;
  • Profitability;
  • Strategic planning;
  • Team building;
  • Learning/training; and,
  • Asset protection.

Each of these areas is important and worthy of further discussion. The size of your firm, the number of partners/owners, and the existing management team will influence the areas of importance. Rate your managing partner on the following 30 questions, using this scale: EE for exceeds expectations; ME for meets expectations; and NI for needs improvement.Leadership
1. Does the managing partner function as the firm’s visionary? Does she have the proper balance between long-term vision and current results?
2. Does she spend an adequate amount of time thinking about what the firm should look like in three years? Can she make a decision promptly and effectively?
3. Does she communicate the vision to all stakeholders (partners, staff and clients)? Does she communicate regularly and consistently? Can the managing partner provide confidence and sustain employee morale?
4. Does the managing partner participate in associations and attend practice management conferences in order to keep the firm informed of best practices and industry trends?
5. Is the managing partner visible in the community and does she represent the firm well? Is she a good role model for members of the firm?

Strategic planning
6. Does the firm have a written strategic plan with priority goals, measurements, action steps, assigned parties and due dates? Does the budget properly address the priority goals?
7. Does the firm have a written marketing plan and budget that integrates with its strategic plan?
8. Does the firm have a written technology plan and budget that integrates with its strategic plan?
9. Does the firm have a written human resources (staffing) plan that integrates with its strategic plan? (You must get the right people on the bus, the wrong ones off, and everyone in the right seat.)
10. Does the managing partner involve the right people in the planning process? Can he build consensus?

Team building
11. Has the managing partner empowered a firm management team including administration, marketing, technology and human resources? Does he hold them accountable?
12. Does he resolve partner conflicts and counsel partners as needed?
13. Does the managing partner utilize testing such as the Kolbe Index to build efficient and effective teams?
14. Does the managing partner limit the number of personnel reporting directly to him (generally five or less)?
15. Does the managing partner enforce the one-firm concept, as well as firm standards, policies and procedures?

Learning/training culture
16. Does the managing partner support a learning/training culture?
17. Does she require firm personnel to develop a “teachable point of view,” or TPOV, in order to transfer knowledge? (Training and learning is a two-way street.)
18. Does the managing partner ensure that partners and staff attend learning sessions?
19. Does the managing partner teach and ensure that the firm’s culture is consistent among offices?
20. Does the managing partner continue to learn and grow personally?

Firm profitability
21. Does the managing partner manage to the strategic plan and budget?
22. Does he require all personnel to develop quarterly game plans? Does he hold partner’s accountable for their quarterly game plans?
23. Does the firm have a retirement plan that will ensure its continuation?
24. Does the managing partner ensure enforcement of firm policies regarding billings, collections and partner performance?
25. Does the managing partner terminate non-performers and those who do not train and develop other personnel?

Asset protection
26. Does the managing partner keep the shareholder and employment agreements current?
27. Has the managing partner addressed succession planning? Is there a firm plan in place?
28. Does she regularly review insurance coverage and monitor risk management?
29. Does the managing partner negotiate and review material legal agreements?
30. Does the managing partner have a current employment agreement with the firm?
While these 30 questions are not all inclusive, they should serve as a starting point or sample for you to develop your own firm’s evaluation form.

Other issues
A significant issue in many firms is the expectation of the managing partner to manage the firm as well as manage a book of business. Many managing partners do not want to give up their book of business due to the fact that it is a security blanket, as well as the fact that they like dealing with clients. In larger firms, the firm is best served if the managing partner transfers his book of business to other partners and focuses on firm business.

An employment agreement for a fixed term of years (generally a three-to-five year term) is appropriate. If the partners decide to vote the managing partner out, he has a “golden parachute.” Likewise, the managing partner should expect to inform the partners at least a year in advance of retirement or if he intends to relinquish the role of managing partner.

As important as defining what you expect your managing partner to do is documenting what you believe she should not be doing. A simple question like, “What are the three things the managing partner should stop doing?” is as relevant as any of the above 30 questions.

Hopefully, this will get your firm thinking and acting on formalizing the process of professionally managing your firm. This is advice you would give your clients. Apply it in your own firm and experience improved performance and teamwork.

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

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