I want to be an equity partner

I recently had a call from a salaried partner in a 12 partner professional firm. Let’s call him ‘Andy’. It was a good few months since the last time we had spoken.

Andy is in his early forties and has been with the firm for around ten years. Last week during his annual appraisal Andy had raised the question as to when he would be invited to join the equity partnership. As a result he has been invited to a meeting of the equity partners to discuss the position. Andy told me that he had reviewed the useful material on this blog and would appreciate any additional tips I might be able to offer him.

I’ve listed five of these below for anyone else in a similar position:

1 – Put yourself in their shoes. What will they want from you?

2 – Consider your BATNA (Best Alternative To a Negotiated Agreement). If your application is refused what will you do? You want to avoid a spontaneous resignation that you later regret.

3 – Evidence your commercial approach. Whilst in theory you want to join the Equity group, you would first want to understand the terms that would apply and the liabilities that you would be sharing. Can you see the partnership agrement? Are there any onerous lease provisions? Annuity obligations? Uninsued lossses? If the senior partners will be retiring in the near future it is the newer partners who will have to share the burden of such liabilities.

4 – Be clear as to whether you are prepared to sacrifice the near certainty of your salaried share for a real variable share of profits or LOSSES. Although this should enable you to gain a more equitable share of the fees (and profits) that you introduce, this will be subject to the impact of losses elsewhere in the firm. Are you sure you don’t just want to secure a performance bonus? If not, be sure you can explain why not.

5 – How much do you want equity? How much capital can you afford to contribute? What if partners are all required to contribute £50k of capital? £100k? £150k? What if the firm doesn’t have an agreement with its bank to facilitate the (inevitable) loan to you that enables you to contribute the capital?

These tips all made sense in the context of Andy’s scenario. They will not all be appropriate in every situation. In particular much will depend upon the relationship that you have with the equity partners. If you’re in a similar position to Andy I hope you find these ideas of some use. If you’d like to have a quick chat before you attend such a meeting, by all means call me. I’d be delighted to help you if I can.

Like this post? You can now obtain my ebook containing loads more insights, short-cuts, tips and advice aimed specifically at accountants who want to STANDOUT and become more successful. You can buy the book or download a summary for free here>>>

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Are you an ‘Accidental Sales Person’?

Few ambitious professionals have ever chosen a career in sales. And yet, regardless of your professional discipline you will, almost by definition, have to be able to generate income. Inevitably that income will come from clients and you will have some, possibly a large, responsibility for helping to generate those ‘sales’.

My friend, Richard White, describes those of us who are in this position as “Accidental sales people”. We didn’t choose to work in sales but it is still an integral part of what we do. Richard’s view is that we will be more successful if we adopt a ‘soft-selling’ style rather than attempt to emulate the salespeople whom we hate. You know – those pushy people who try to persuade people to buy things they don’t want.

We need to ensure that our sales techniques are appropriate and that our prospective clients do not feel we are pressurising them to engage us for services they do not want. For this reason traditional sales training techniques are unlikely to be very effective when trying to help ambitious professionals enhance the results of their networking and client development activities.

I have long admired Richard’s ‘soft-selling’ techniques as they are very similar to solution based selling and consultative selling – being the approaches that I learned some years ago and incorporate into my mentoring programme. In essence the key point is to work with rather than against human nature. Rather than attempt to push your services, soft-selling demands that you first understand the primary motivations of your clients and prospective clients. Then, and only then, you should be able to make your services seem so compelling that they attract your clients to want to engage you.

The skills you need to develop are less a hard nosed approach to selling and more an understanding of human nature and a degree of patience.

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Do you earn less than you want to from your smaller clients?

What’s your answer to that question?

What about this one? Do you want more GOOD clients?

And this one? Do you want less frustration from your smaller clients?

Most ambitious professionals would answer ‘yes’ to all 3 questions.

That then leads onto the key question, which is: “So what are you going to do about it?”

The simple fact is that nothing changes just because we wish it to. If we want different outcomes for our business activities we need to do things differently.

I’ve long referred to the following quote in my practice management training courses.

“If you carry on doing what you’ve always done, you’ll carry on making what you’ve always made”

The managing partner of a 14 partner law firm recently told me that he’d tried everything possible to get a couple of key staff to change their behaviours.

They worked hard and were conscientious and loyal. So he didn’t want to let them go. We ran though a number of things he could consider but he claimed he’d tried them all and that none had made an difference. Based on when he was telling me I concluded that there were only two other alternatives:

To accept things were not going to change or to engage an external catalyst to help bring about the changes he sought.

How often do you wish things would change? What are you doing differently to help that change become a reality?

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How intelligent are ambitious professionals?

I was reading a report recently, from Kaisen, about characteristics of partners in professional advisory firms. The report concludes by noting that:

“what distinguishes partners from non-partners are ’emotional intelligence’ factors such as sensitivity to clients’ feelings and psychological needs, and the ability to trust people to ‘pick up’ on what motivates them as individuals.”

For my part though I tend to feel that there is a little too much generalisation in such statements. I know of plenty of partners who do not exhibit the qualities described above. Many of them are also deemed to be successful. Equally there are plenty of aspiring partners and ambitious professionals who DO exhibit those qualities but who will struggle to make partner in an environment that does not value them.

Most academics seem to agree that whilst IQ is one measure of intelligence there are many others that are worth considering – including Emotional Intelligence. Karl Albrecht considers there to be 6 types:

Abstract Intelligence – symbolic reasoning
Social Intelligence – dealing with people
Practical Intelligence – getting things done
Emotional Intelligence – self awareness and management
Aesthetic Intelligence – sense of form, design, music, art and literature
Kinesthetic Intelligence – whole body skills like sports, dance, music, or flying a jet

Conventional wisdom would probably suggest that ‘abstract intelligence’ is the one that is most frequently observed in high achieving professional people.

If you are an ambitious professional how intelligent do you need to be to succeed in your present environment?

 

Like this post? You can now obtain my ebook containing loads more insights, short-cuts, tips and advice aimed specifically at accountants who want to STANDOUT and become more successful. You can buy the book or download a summary for free here>>>

 

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What happens when the ‘rainmakers’ retire?

Most accountancy firms have at least one ‘rainmaker’ who combines all of the ‘finding’ skills I have addressed in other blogs.

Wouldn’t it be great if the rainmaker could act as a mentor of younger ambitious accountants in the firm?

In practice this doesn’t happen very often. On the contrary it seems that very few rainmakers are also good mentors and this is borne out by research referenced in Ford Harding’s book “Creating Rainmakers” where he offers a number of quotes including:

  • “He didn’t mentor much. I never went to a sales meeting with him”
  • “He wasn’t much of a mentor. In his mind, he probably had better things to do than to mentor people”
  • “Mentoring isn’t a terribly strong interest of his.He is available to answer questions, but he doesn’t take the initiative to shepherd people along.”
  • “He wasn’t interested in sharing his style and technique with others. He moved fast and was more of a loner. It was hard to follow what he did.”

What happens when such rainmakers retire?

How many younger and prospective partners are able to take their place? Is it fair to assume that ambitious accountants will somehow have picked-up enough to ensure a continual flow of new work?

All too often we assume that only technical skills can be learned. Soft skills, such as those required to find and win new work depend only on instinct.This can’t be taught or learned.

I’m sorry but I don’t buy that. For example, I wasn’t born a good networker or a good speaker (although I did get around quickly at Nursery school and was in school plays in primary school). I learned these skills just as I learned about auditing, tax and professional ethics.

Okay. Of course there’s a difference but I cannot accept that anyone is incapable of improving their non-technical skills.

If there are no suitably qualified mentors with sufficient time, knowledge and commitment inside the firm, perhaps the answer is to look outside.

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Great questions (part one)

Many ambitious professionals welcome the opportunity to expand their thinking and to benefit from identifying new ideas all by themselves.  You will also find that you can STAND OUT from your peers in a positive way by reflecting on key questions and then answering them honestly.

Here are some great questions I’ve benefited from in the past:

  •  What’s stopping you?
  • Where would you like to be in [5] years time AND what achievements would you want to look back on?
  • How important is this going to be in a year’s time?
  • What’s keeping you awake at night?
  • What would it take, specifically, to move forwards?
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Is the glass half full, half empty or…?

When you see a glass of wine do you consider it to be half full or half empty? (or are you a typical accountant and point out that the glass is twice as big as it needs to be?)

Ambitious accountants who are good ‘finders’ will tend to see the positive side of life.

They may not always have been optimists but they are likely to apply their knowledge, skills and experience to maximise the likelihood of achieving their preferred outcomes when networking, speaking in public, pitching for work and ‘closing the sale’.

Some people believe that optimism is a deep-seated personality trait. But is this true actually?

Psychologists have gathered compelling evidence that optimism is a skill that people can learn. At one extreme this might involve behavioural cognitive therapy (BCT) to replace negative thought patterns with constructive ones. This approach has been particularly successful in helping people fight depression which is closely linked to pessimism – the opposite of optimism. Effectively therefore it is teaching people to be more optimistic. But of course you don’t have to be ‘on the edge’ to learn how to be more optimistic. You do however need to be open to the idea. Such an attitude of mind will also help reduce the prospect of you coming across as boring.

Like this post? You can now obtain my ebook containing loads more insights, short-cuts, tips and advice aimed specifically at accountants who want to STANDOUT and become more successful. You can buy the book or download a summary for free here>>>

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Why gamble with your most ambitious staff?

A friend of mine, Stephen Harvard Davis is recognised as the UK’s leading authority on job transition and retaining top talent, He is the author of “Why do 40% of Executives Fail?”

The following observations were inspired by an item on Stephen’s blog in which he addressed the retention issues relevant to top executives in the corporate sector. Whilst some of Stephen’s points apply equally to ambitious accountants, I believe that there are also a number of crucial differences.

Replacing ambitious accountants can be costly and can easily involve as much as twice the salary in hard cash terms. Yet recent studies from the USA suggest that the opportunity costs when top talent leaving a company can be as much as twenty-four times the salary (Based on a salary of £62,000).

Most accountancy firms try to retain ambitious accountants by throwing money at the situation. Every single time I have witnessed this over the years the extra money only buys time; firms looking to poach the best partners and prospective partners will always pay more for potential because they have budgeted for the cost of the recruitment exercise and they are determined it should be successful.

I believe that there are four key steps to retaining your best ambitious accountants:

Step one is to recognise that top talent can be found at all levels within an accountancy firm. It’s not, and never has been, confined to the partner group. Once identified, however, top talent needs to be nurtured, developed and encouraged otherwise it walks. Partners (and managers in the larger firms) therefore, should be rewarded for identifying top talent, developing and nurturing it.

Step two is to understand the reasons for top talent leaving. This means learning what individuals want from their current and prospective role in the firm. Many firms view this as difficult because of the complexity of analysing human relationships. It also makes developing a one size fits all package of benefits difficult.

The result is that many accountancy firms ignore the real reasons for talent loss and blame attractive salaries and benefits on offer from competitor firms. Yet the fact is that top talent tends to be hungry for knowledge and experience and to seek out the firms that can offer them this.

Certain top talent can be therefore be categorised in three ways:

  1. “Knowledge nomads” moving from one firm to another seeking information that adds to their abilities;
  2. “Prospectors”, those that are looking for better career expectations; and
  3. “Relationship Migrants” who seek out a particular type of more senior experienced partner as a teacher and mentor.

Step three is to evidence the firm’s commitment to the individuals concerned in a way that motivates each of them. Top talent tends to be attracted by retention drivers such as, mentoring, coaching, training programmes and also by being able to contribute to the firm’s vision, direction and future. However paying lip-service to this communication will only create resentment. The engagement must be real and motivate the individuals concerned.

Step four is to provide constant feedback and stimulation. There is little point in hoping to retain one or more ambitious accountants if the partners merely pay lip service to their development process. Again external mentoring has a role to play here but partners cannot abrogate their own responsibility for finding out what motivates their star people and contributing to the process.

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When you need more than just technical skills

Whilst exam training focuses on developing technical skills most firms need managers and partners who also have a broad mix of business skills. As promotion is likely to depend upon such skills there are essentially only four options available to your firm. They will either:

  • pray, hope or make a wish that you magically develop all the necessary skills so they can justify promoting you;
  • send you on a range of generic personal skills courses and pray, hope or make a wish(!) that you pick up and practice sufficient tips to make the time and effort worthwhile;
  • arrange for you to receive personal, tailored mentoring that overcomes the problems inherent in the “courses” approach; or
  • recruit someone else who already has proven business skills across the board.

Some firms combine the last two options and arrange mentoring as an additional benefit to attract potential recruits. In such cases the mentor is usually an independent third party; this evidences the firm’s commitment to the new candidate and will be a positive supplement to the firm’s conventional induction process.

Mentoring by an internal senior partner with sufficient time, talent and commitment – or by a trusted third-party – can be equally motivating for managers, senior managers and even junior partners where traditional ‘hopes’ and courses have not enabled them to yet achieve their potential or to be as profitable as the other partners would prefer.

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