Is your firm poised for long-term success and viability? Do you even know what that looks like for your firm? The reality is that most CPA firms have their work cut out for them if they want exiting partners to retire comfortably and future leaders to flourish. In the new edition of this popular book and its companion workbook, Reeb and Cingoranelli impart the same no-nonsense advice on succession planning and management that they share with their clients, providing you with the benefits of their years of experience, research, and methodologies. Volume 1 covers fundamental succession and management concepts to ensure that every partner and manager is on the same page and working toward a shared vision. After reading this book you will be able to: Take steps to maximize your firm’s value Shore up your business strategy and operations Remove personal preferences and entitlements from partner discussions Build a strong partner group Ensure your firm survives the departure of key people by creating or improving your succession plan, and more!

Table of Contents:
1 Why Now? 1 Why Does This Matter, and Why Now? 1 Why CPAs Don’t Develop Successors As They Should 4 Crisis Succession Planning 5 Orderly Succession Planning 6 Component Parts of an Orderly Succession Plan 7 Chapter 2—Start With Strategy 7 Chapter 3—Clean Up Your Operations 7 Chapter 4—Identify and Describe Your Business Model 8 Chapter 5—Examine Retirement Benefits 9 Chapter 6—Describe Governance, Roles, and Responsibilities 10 Chapter 7—Establish Voting Rights, Decision Making, and Equity Distribution or Redistribution 10 Chapter 8—Define the Managing Partner Role 10 Chapter 9—Build Capacity for Long-Term Sustainability 11 Chapter 10—Transition Client and Referral Relationships 11 Chapter 11—Describe the Admission to Ownership and Development Process 11 Chapter 12—Build a Strong Partner Group 11 Chapter 13—Establish Processes and Procedures for Retired Partners Still Working for the Firm 12 Chapter 14—Define the Maximum Payout Process and Other Buyout- Related Issues 12 Chapter 15—Create a Partner Accountability and Compensation Plan 12 Chapter 16—Address Death and Disability in Your Buy-Sell and Retirement Policies 13 In Conclusion 13 2 Start With Strategy 15 Strategy Should Drive the Rest of Your Decisions 15 Thinking Strategically 16 Strategic Planning Overview 17 Getting Started 17 Core Philosophy 18 Long-Term Vision 18 Strategies, Action Plans, and Metrics 20 Some Typical Strategic Initiatives 21 Partner Accountability and Compensation 21 Attracting, Retaining, and Developing People 21 Growth, Business Development, and Client Retention 22 Infrastructure, Consistency, and Efficiency 22 Improved Communication and Transparency 22 In Conclusion 23 3 Clean Up Your Operations 25 Get the Basics Right 25 Information Systems and Performance Metrics 26 Performance Metrics 26 Strategies for Improvement That Will Yield High Return on Investment 29 Create Capacity at the Top 29 Improve Your Overall Profit Stream 32 Charge Clients a Fair Fee 33 Manage Through the Trough 36 In Conclusion 36 4 Identify and Describe Your Business Model 39 Eat What You Kill Versus Building a Village 39 The Problem With Replacing the Superstar 42 Modes of Operation Within the EWYK and BAV Models 43 Survival Mode 44 Safety Net Mode 44 Success Mode 44 Continuation Mode 45 The Most Commonly Found Disconnect 46 Modes of Operation Summary 46 Important Distinctions Between the EWYK and BAV Models 47 In Conclusion 49 5 Examine Retirement Benefits 51 The Nuances of a Fair Retirement Benefit 51 Determining the Value 52 Other Issues to Consider 53 Mandatory Sale of Ownership 54 The Importance of Vesting 56 Actions That Should Negatively Affect Value 59 In Conclusion 60 6 Describe Governance, Roles, and Responsibilities 61 Creating Accountability 61 Enabler One: Decision-Making Authority 62 The Problem 62 The Solution 63 Enabler Two: Standard Operating Procedures Foundation 63 Enablers and Synergy 64 Enablers and Firm Size 66 Enablers in Firms of Up to $2Million to $3Million 66 Enablers in $3Million to $10Million Firms 67 Enablers in Firms in Excess of $10Million Dollars 69 Decision-Making Authority 70 Voting Control Properties 70 Organization Infrastructure Properties 70 SOP Infrastructure Properties 71 Administrative Policies 71 Accountability Policies 72 Processes 73 Avoiding Common Traps 73 In Conclusion 74 7 Establish Voting Rights, Decision Making, and Equity Distribution or Redistribution 75 Voting and Decision Making 75 To Vote or Not to Vote: That Is the Question 75 Formal or Informal Votes 76 Types of Votes 77 Equity Ownership and Why It Matters 78 Equity Reallocation 78 Equity Allocation and Reallocation: What, Why, and How 78 Determining Equity Allocations 83 In Conclusion 86 8 Define the Managing Partner Role 87 Defining the Managing Partner’s Role 87 Why the Managing Partner Is the One Charged With Implementation and Accountability 89 Electing and Dismissing the Managing Partner 92 The Term of the Managing Partner 93 Firing the Managing Partner 94 The Managing Partner Compensation System 95 In Conclusion 95 9 Build Capacity for Long-Term Sustainability 97 The Importance of Building Capacity Through Your People 97 Developing Real People-Management Skills 98 Learning How to Develop People More Quickly 99 Motivating Your People 100 Culture and People Development 101 Competencies Form the Foundation 101 Examples of Some Competency Definitions 103 People Development in Three Steps 104 Setting People Up for Success Through Clear Expectations 104 The Effect of Your Expectations on Others’ Performance 107 Values Matter 108 Reporting Models 108 In Conclusion 109 10 Transition Client and Referral Relationships 111 Why You Need Solid Transitioning 111 Benefits of Proper Transitioning 112 A Transitioning Process 113 Penalties for Not Transitioning 115 Referral Sources 116 Sample Transitioning Plans 116 Transition Compensation Plan 117 In Conclusion 118 11 Describe the Admission to Ownership and Development Process 119 Who Should Become Owners in Your Firm? 119 Career Paths for Prospective Owners 120 New Partner Admission 121 Admission to Equity Ownership 122 Nurturing New Partners 122 Dead Weight 123 In Conclusion 124 12 Build a Strong Partner Group 127 Turnover Basics 127 Cranking the Vise 127 Terminating a Partner 128 Leaving and Going to Work in Industry 129 Leaving and Competing 130 Other Issues 131 Employment Agreements 131 Total Loss of Retirement Benefits 131 Terminations for Cause 131 Severance Packages 132 In Conclusion 132 13 Establish Processes and Procedures for Retired Partners Still Working for the Firm 133 Continuing to Work After Sale of Ownership 133 Boundaries Are Necessary 133 Annual Contracts 135 Retired Partner Employee Compensation 136 In Conclusion 137 14 Define the Maximum Payout Process and Other Buyout-Related Issues 139 Personal Liability of Remaining Owners for Retired Owners’ Full Payout 139 Specific Recourse or Cures Should a Retired Owner Not Be Paid in Full 140 Sale or Merger of a Practice 140 Ability of Retired Owners to Block Mergers or Total Sale of the Business Unless Retirement Obligation Is Paid in Full Prior to Transaction 141 Ability of Retired Owners to Block the Sale of a Line of Business Unless Retirement Obligation Is Paid in Full Prior to Transaction 142 Partially Funded Retirement Plans 142 Maximum Payout Provision 143 Purchase Price of Other Companies and Real Estate 143 In Conclusion 144 15 Create a Partner Accountability and Compensation Plan 145 Accountability: It Should Apply to Everyone 145 Setting Clear Expectations to Create Accountability 146 Commitment to Results 147 Delegation or Dumping? 147 Revisiting the Notion of Accountability 147 Accountability for Partners 148 Accountability Requires Action and Commitment 149 Accountability and Performance Variability 150 Objective Performance Criteria 150 Subjective Performance Criteria 151 Establishing the Accountability Process 151 Benefits of Implementing the Accountability Process 152 Who’s in Charge? 153 Performance Pay for the Managing Partner’s Allocation 155 In Conclusion 156 16 Address Death and Disability in Your Buy-Sell and Retirement Policies 157 Now Is the Time 157 Policies Dealing With the Death of a Partner 157 Policies Dealing With Disability 159 Policies Dealing With Partial Disability 159 In Conclusion 160 Conclusion 161