Accounting firms tend to think about succession in terms of retirement dates. Ira Rosenbloom thinks leaders should move the starting line much earlier.
In the latest episode of the INSIDE Public Accounting Podcast, host Rob Brown sits down with Rosenbloom for the first of a two-part conversation about succession, ownership and preparing the next generation of firm leaders.
Start the Transition Before Retirement
Rosenbloom, a former managing partner who now advises firms on succession, strategic planning and profitability, argues that firms should begin transitioning senior partners’ roles and equity well before they leave the profession. Rather than treating ownership as something transferred at retirement, he favors a gradual transition that gives emerging leaders time to take on equity and develop alongside experienced partners.
That doesn’t mean experienced partners become less valuable. Rosenbloom sees the years leading up to retirement as an opportunity for senior partners to spend less time on administration and more time transferring the skills that helped make them successful: client relationships, mentorship and business development.
Make Ownership Worth Choosing
The ownership model itself may also need to change. Rosenbloom says younger professionals are weighing partnership against flexibility, quality of life and the responsibilities that come with ownership. Firms may need to rethink models in which a small number of partners hold large ownership stakes, instead creating opportunities for more people to take smaller stakes and participate in the firm’s future.
That matters as firms prepare for continued partner retirements. IPA data cited in the episode shows firms expect an average of 2.6 equity partners to retire per firm next year. Rosenbloom says firms hoping to perpetuate internally need to demonstrate that they’re investing in the business, including HR, technology and other infrastructure, rather than simply preparing to fund current partners’ exits.
Develop Successors Before You Need Them
Building successors also can’t begin when someone is nearly ready for partnership. Rosenbloom recommends developing entrepreneurial and client-facing skills much earlier in an accountant’s career, giving emerging leaders repeated opportunities to learn how experienced partners manage relationships, identify additional services and advise clients.
“You’ve got to invest in your business. In order to progress, you’ve got to invest.”
For Rosenbloom, that investment is ultimately what turns succession from a future event into an ongoing leadership responsibility.
Part two of Brown’s conversation with Rosenbloom continues tomorrow.
