The war for top partner talent at CPA firms has never been as hot as it is today. A new generation of star players has emerged, and post-COVID, they are willing to consider switching firms for the right opportunity. These future leaders are ready to lead now, and they want to lead at the best firm possible.
Every firm has its stars within its partner group, and everybody in the firm knows who they are. These individuals drive a vastly disproportionate share of firm growth and profitability. Adding to these ranks through lateral partner recruiting can contribute rapidly to your firm’s future success. Missing the opportunity to acquire this type of talent can weaken your competitive position dramatically.
What do star players look like?
Solid players, like many of your partners, maintain good client relationships, manage a meaningful book of business, do great work, mentor staff well and have superior technical skills. Star players do so much more. They are charismatic business builders. They have large networks. They deliver client value beyond the usual compliance services. They create new offerings within their specialties and aggressively bring them to market. They improve delivery processes to give the firm a competitive advantage in the marketplace, even against larger, highly reputable firms. And they have a knack for recruiting and mentoring high-performance teams that outperform the rest of the firm. You see these stars in action every day. What a coup it would be to find more of them.
What does it take to recruit star players?
Raise the bar: The first step is raising the bar. If you want a star player, make that clear to whoever is doing your recruiting. Describe the specialty, the personality, the track record and the expectations you will have for the partner. Don’t just use superlative words and phrases in your description. Create a story describing what stars may have done to vastly differentiate themselves from others, and tell the story in the context of the particular business area for which you are recruiting. If a candidate’s story, like your description, doesn’t jump off the page, don’t pursue the candidate, and make it clear to the recruiter that, moving forward, you only want to see star candidates for this position.
Create the right position: The second step is creating the right position. Star talent will not switch firms to wait in line. If you are serious about recruiting at this level, then you need to clear a path for the candidate. You should identify a well-defined leadership position and be prepared to communicate the size of the opportunity and the firm’s willingness to invest in its growth, and otherwise support the star recruit’s effort to hit the ground running and have an immediate impact. Recruiting opportunities fail quickly when firms equivocate about the role because of the perceived need to placate incumbents who are not star players. So, please don’t start a recruiting effort that you are not prepared to finish.
Pay market value: The third step is paying stars what they’re worth. It will take a meaningful increase in draw, a sizable amount of initial firm equity and a clear path to further firm equity awards based on understandable performance metrics. If you are not prepared to step up to this bar, then don’t look for stars. Stars know their worth. They will move for greater opportunity, but not for less than their value in the market. If you are not prepared to reward stars at this level, they will quickly conclude that you either don’t believe in them or don’t recognize their abilities. We’ve seen this happen too many times. So, avoid going out on a limb, only to conclude that the candidate is too expensive. Instead, get good internal commitment up front, or pass on the opportunity.
Pay for the star’s clients: The fourth step is to be willing to buy the star’s book of business from their previous firm. Star players should have large books of business. A book of $4 million to $5 million is not unusual, and clients will likely want to follow the star to your firm. Because of non-compete restrictions, be prepared to pay one-year-cash-basis-revenue for this business, spread out over a few years. When you make this investment, you help ensure star players’ success because they will be able to build rapidly, starting from what they’ve already accomplished, rather than starting from scratch. This also shows the star player that you are willing to invest and makes him a top player among his peers from day one — a much better result than a ground-zero restart in a new culture. If the business you are buying is solid and profitable, you will be paying once for an annuity stream that will increase over future years.
Pay for the star’s team: The final step is to be willing to pay for a star player to bring the best talent from their team at their prior firm. In light of non-compete restrictions, this will probably also require a buy-out from that firm of one years’ base pay for each person who moves to your firm. It’s well worth the investment. If you get the best part of the star’s team to come, they will be assured to be highly productive from day one, and it will set the stage for recruiting further talent to an already standout team.
Star partner-level players are available in the market today in even the hardest to recruit specialties. Your ability and willingness to attract them will play an essential role in the future success of your firm. Before you move forward to find them, make sure you’re prepared to demand that recruiters find you star players, create the role and the opportunity that will attract them, reward them properly, buy out their current book of business and allow them to bring their best people to your firm, even if there is a short-term financial cost.
Richard Stanger (rstanger@stangercarlson.com) is the CEO of StangerCarlson LLC. Geoff Bruskin (geoff@stangercarlson.com) leads the recruiting practice at StangerCarlson LLC. You can contact them by email or at (914) 494-7358.
