When it comes to retirement, the main goal is to maximize your exit while leaving the future open to new possibilities.

In the autumn years of a career in accounting, the professional at a midsized or large firm will have a different set of priorities than the small or sole practitioners whose retirement we profiled in our November issue. Is their staff strong enough to continue running the business? Will clients continue walking in the door after they’re gone? Does the professional truly want to stay retired? There’s a lot to review, but with the right strategy and mindset, the large-firm accountant can make retirement serve their own needs.



A popular option for the retirement process is the internal succession. With already-familiar staff on hand to pick up where the retiring accountant leaves off, the process can offer more peace of mind than selling to an outside buyer. But in preparation for this transition, you need to make the proper arrangements.

“If your plan is to sell internally to other owners and employees, the value of your interest is heavily dependent on a proper transition of your duties, which often are heavily oriented to client relationships,” said Terry Putney, chief executive officer at M&A consultancy Transition Advisors. “You need to have a plan in place to keep the ship sailing in the same direction after what often is the most key employee in the firm, the retiring owner, leaves the firm.”

However, you need to plan for this transition far ahead of your exit, and you need to have the staff who will handle future responsibilities on deck long before they actually have to. “A problem which is getting worse all the time is the lack of available talent to take over retiring owners that don’t want to sell,” continued Putney. “The plan to find and develop the talent needs to be long-term. You can’t flip a switch on a few years out and expect an instant answer.”

August Aquilla, chief executive of Aquila Global Advisors, has a number of specific factors in mind to choose the next generation of top brass. “Successor candidates should be 15-20 years younger than the current leader,” he urged. “Map out a developmental plan for each successor candidate [and] be sure to include the following areas: operations, marketing, client service, and strategy, as well as a leadership development plan. Establish performance standards and evaluate them semi-annually. Give them the opportunity to make a visible contribution to the firm [and] provide them opportunities to learn new skills outside of the firm. Give the successor candidates some leeway — they will not fulfill all your expectations. Just remember, neither did you!”



As retirement is hopefully not a spur-of-the-moment idea, there are several layers of your business to consider as you leave it in another’s hands, whether through a merger/sale or internal succession. Having a list of goals to accomplish before your retirement not only ensures a more worry-free process, but also strengthens your firm’s overall image.

Marc Rosenberg, a consultant, author and speaker on firm management and strategy at Rosenberg Associates, offers some easily accessible goals before it’s time to leave. “Have a [firm] specialty or niche,” he advised. “It doesn’t need to be anywhere near 100 percent of your practice; 20-30 percent is fine. The more that a seller is a specialist than a generalist, the more attractive the practice will be.”

Rosenberg also advised developing a leveraged practice to delegate to the staff: “If the solo works 1,500-2,000 billable hours a year, consisting mostly of staff-level work, the seller seeking to work at the buyer after the sale will not have much to do because the buyer will insist that staff-level work be done by staff.”

Industry consultant Jay Nisberg suggested not forgetting your own personal responsibilities towards the firm. “Understand what your retirement benefits are, per your agreement, before you start making the mental election of retirement,” he said. “You should start talking to firm management to let them know what you’re thinking about; a lot [of firms] require you to talk to leadership before you go. Retirement is not a surprise thing. Thirdly, you have to think about two groups of people: your clients and the people you’re mentoring. You’ve got to ask yourself, ‘How will my clients be best served?’ and ‘Am I bringing someone along that we can transition into leadership of the client?’”

“The most important thing to achieve before finally stepping out the door is to make yourself unneeded,” said Aquila. “Here are the primary goals: Safeguard the long-term health of the practice; ultimately plan for your retirement security; prepare for and install a successor; and let go of a business that you spent a lifetime building.”



Of course, some retirees don’t like to relegate the rest of their lives to the golf course or garden. For those who still have the itch to keep working, but perhaps not as much, there certainly are options to entertain.

“A classic reason for selling is that the sellers have reached 65 or older, have grown tired of the work grind and feel it’s time to retire while young enough to do ‘other things,’” Rosenberg explained. “But the key question is: What are those other things? What will sellers do with themselves after they stop working? Will the point come soon where the seller misses the work? Do they want to sell the firm outright and stop working ‘cold turkey,’ or do they want to have the flexibility of working full- and/or part-time after the merger?”

“A lot [of professionals] like to stay on,” said Nisberg. “’Can I work out some kind of deal to work less?’ Can I work with the firm, and can I be relevant?’ The one thing I think to do is to remain relevant. Maintain a consulting position; go on working with a client of the firm. Continue to work with people [you] know and like, and make some money doing it.”

Aquilla concurred: “Many people will start a second career or even a third. Accountants have a wealth of knowledge and contacts that will make them valuable assets as they age.”



The one constant opinion among our experts is that the future retiree needs to be aware, here and now before the retirement, of their work environment. When they leave the figurative set of keys for the next professional to take, did they do all that needed to be done?

“Future retirees seeking an internal solution need to make a realistic assessment of their firm’s readiness,” said Putney. “Do they really have the necessary talent on board; are the terms of their owner agreement reasonable; and do they have a plan in place to transition all of the duties of the retiring owner so the firm can not only survive but thrive after they leave?”

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