The most famous living Beatle, Paul McCartney, turns 70 this June. Twenty years ago, when he was 50, his manager suggested that 50 was a good age to retire, saying, "You really don't want to go beyond 50. It's going to get embarrassing. "
In the March issue of Rolling Stone, McCartney made it clear that he had no plans to stop touring or recording when he countered the argument that it was time to make way for the young kids, insisting that the young kids make way for themselves.
McCartney's right: The date on your birth certificate shouldn't determine how long you get to keep contributing. All Baby Boomers (born between 1946 and 1964) -- inside and outside of public accounting -- should take heart from this. As long as they're contributing, we need them. We want them.
But how do you define "contributing?"
In McCartney's industry, it's pretty easy to judge. The music business is fiercely competitive; when Sir Paul runs out of hits (and fans' nostalgia for him), he'll have to stop. So McCartney has a huge incentive to keep producing. If he doesn't, his career is over.
But that's not how it works in public accounting. Leading consultants have repeatedly observed that in many firms, older partners are hanging out longer, sucking up resources from rising stars.
Why do firms hang onto their one-time hit-makers, long after they've stopped producing hits? A few reasons.
First, accountants are nice. Too nice. Partners avoid having difficult conversations that would hold themselves and their peers accountable. It just doesn't seem gentlemanly to say to a guy you've worked with for 20 years, "Hey, your numbers suck. Maybe we should cut your compensation and spread it around to the up-and-comers who are actually rocking it"
Second, many firms promoted partners who didn't have the right stuff. Maybe they didn't want to lose someone's technical skills. Or Jeanine had been at the firm for so long that it just seemed like the right thing to do. (Plus, having a couple more female partners might be good for recruiting.) The result is that many of our firms' partnerships are bloated with people who don't pull their weight, are terrible role models for the next generation, are difficult to work with, or just aren't that competent.
No matter why they were promoted, the truth is that it's very difficult to fire a partner. We treat partnership like university tenure -- once you're in, it's very, very difficult to get booted out.
Third, public accounting is the only place where partners can make the kind of money they make. Your best-paid partners could never earn multi-millions in private industry. Being a partner in a CPA firm is the highest income bracket most CPAs could ever achieve. So if you're money-motivated (and a lot of partners seem to be overly focused on partner income these days, based on the number of conferences and consultants dedicated to the topic), you're not interested in building a firm; you're interested in building your fortune.
And that leads to my last point. CPA firms are no longer the apprenticeship-oriented places they were intended to be. Two generations ago, becoming a partner at a CPA firm was as much a responsibility as a reward. As a partner, you had a responsibility to put the best interests of the firm ahead of your own interest. You had a responsibility to ensure that the firm was more valuable when you left it than when you started. You had a responsibility to bequeath something awesome to your next generation.
But after Andersen's collapse and Sarbanes-Oxley's windfall, that model shifted. Partners now spend more time debating their rewards (compensations, mergers, buyouts) than talking about their responsibilities.
And that's a darn shame. In pursuing a more "corporate" model for our firms, we've also become too earnings-focused, too compensation-focused. We've lost our soul.
So, what does all of this mean for next-gen CPAs? First, don't expect Boomers (partners or not) to move out of the way to make room for you. Boomers are running scared. They haven't saved enough for retirement and their confidence in their firm's ability to meet their payout is sketchy. That's one reason for today's merger mania: Boomer partners whose firms aren't profitable hope that a merger or acquisition will bulk up their retirement income.
Partners have to decide if they want to make most of their money during their careers or in their retirement. Right now, they're trying to do both. (Shame on them.)
So, next-geners will have to make a way for themselves. Your firm isn't going to do it for you. If you're better than your elders, the market will find a way to reward you.
I've seen this countless times in the decade I've been working with CPA firms: A true superstar is overlooked in their firm, and eventually another firm scoops them up. Or they leave their firm and start a booming consulting practice.
But you can't just sit passively and wait for this to happen. You have to put yourself out there. Do you have an amazing skill that your current firm doesn't value? Are you a master at using social media to drive business development? Are you an amazing recruiter? Are you a whiz at cross-selling? If you've got the chops, don't sit back and wait for your firm to notice. Share your knowledge. Offer to speak at conferences -- even to other firms! Start your own blog, or post on others' blogs. You have to start branding yourself, regardless of whether you think you need to or not.
No one is going to hand you a crown and a scepter just because you're next in line. That's not the way the world works; power never moves out of the way. At some point, you're going to have to take the reins yourself. You're going to have to lead. You're going to have to not only be better than those ahead of you in line, you have to own it. And that's going to make some people mad. It always does. But stay with it, and let your results speak for themselves.
You have to make a way for yourself. Don't expect Boomers to do it for you.
Rebecca Ryan is a futurist who helps progressive clients navigate key trends facing their firms. Reach her at (888) 922- 9596 ext. 702 or rr@nextgenerationconsulting. com. Read her blog here.
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