What young CPAs need to know about succession planning

Here’s why it’s important to take initiative and be prepared.

December 15, 2015

Partners at small to midsize public accounting firms have a wealth of information at their disposal about succession planning and how they can best prepare for the future.

But emerging leaders—the 20-something and 30-something CPAs—are often left in the dark about succession, how it works, and how they can plan for that possible day when they are asked to take the reins of ownership. 

“Young people have a tremendous opportunity to step up in a lot of these firms,” says Gary Adamson, CPA, president of Adamson Advisory, a CPA practice management consulting firm. “But we have to connect the emerging leaders to the current leadership. There is a disconnect.”

Thus, it’s imperative that young CPAs take the initiative to find out all they can about their firm’s succession plans. Most partners, sources say, are often so busy focusing on their own clients that they don’t spend much time discussing succession with the firm’s next generation of leaders.

Why should young CPAs care about this? First, they may want to become decision-makers some day, and have input into the firm’s direction. “And let’s face it—that’s where the money is made,” says Sandra Wiley, a shareholder at Boomer Consulting Inc. “If you want to make some serious money, you have to be a partner.”

So how do young, driven CPAs prepare themselves for succession in small to midsize firms? Sources offer the following tips to handling this often tricky and political subject:

Self-evaluate. You may dream of becoming a partner, but make sure that’s what you truly want before focusing on succession. Learn more about the roles, responsibilities, and expectations of partners. Know your strengths and developmental opportunities as they compare to a partner role. Spend time reflecting on your future and what lights you up in the profession. Determine if there is alignment with what you want in your career and your personal life. “Consider things other than just career and money,” says James Metzler, CPA, CGMA, founder of the Metzler Advisory Group LLC.

Evaluate the firm. If the partners are only 50 years old and you are 35, it could be a long wait to becoming partner. Look ahead and make sure that the path to partnership is open. If the partners won’t retire for 20 years, find out if the firm is open to adding a new partner.

Focus on soft skills and prep for leadership. Strive to have excellent technical accounting skills, in addition to having savvy soft skills that help in dealing with clients and colleagues. This helps young CPAs get noticed and prepared for succession. “A young person has a lot to learn about leadership and client relationships and supervising people,” Adamson says.

Find an advocate in the firm to discuss succession planning. “Find the partner you feel the closest to and start having those conversations,” Wiley says. “You can do it without offending, as long as the person that you are asking is someone who is your trusted advocate in the firm.” She says conversation starters can include the following: “I have a special interest in consulting with clients, but I have no idea where to start. Could you tell me how you started in your practice?” Or, “I wonder what a career path at the firm could look like for me?” Or, “The firm has a niche in construction, and I have a good base knowledge, but how can I increase my knowledge in a way that would lead to a higher level in the firm?” Meet with the advocate at least once a month and be diligent about this, even if the advocate is not.

Most importantly, be interested and entrepreneurial. Sit down with a partner or mentor at the firm and ask a long list of questions, in some cases even during the interview process if you see yourself at a firm long term. James Wurbs, CPA/PFS, says questions include: “What kind of succession plan do you have? What are the plans for the future? What do you look for in a partner? Do I need to bring in a certain book of business? How much money do I need to buy in?” Wurbs, 44, became a partner in Dunning & Associates CPAs, LLC, about five years ago.

Young CPAs can also ask: Is there a mandatory retirement age? How does the firm operate? What niche should I focus on? And will you invest in me and do you offer leadership training skills for your staff? 

“Don’t be afraid to ask questions and show interest and have a thirst for what you have to do to grow in your firm,” Adamson says. “Don’t just sit back and expect someone to come and grab you and turn you into the next partner. You have got to show that desire and you’ve got to want it.”

Cheryl Meyer is a freelance writer based in California.

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