Succession Strategies for Your Firm


According to the 2016 Succession Survey conducted by the AICPA Private Companies Practice Section, less than half of all firms have succession plans in place. And among the many firms that do have agreements in place, critical issues are not being addressed in those agreements. In addition, many solo firm owners have stated that they plan on retiring at the age of 70 because they have no plans for what will happen to their firm once they actually leave. 

Why succession planning is on the backburner 

While it’s important that partners understand the day-to-day of what’s happening in their firm, too many partners are focused on executing responsibilities that should be left to lower-ranking staff members. This could be a result of many factors, such as unconsciously being used to handling everything from A-Z or simply because they want to have their hands in all the pots. 

Of course, it’s incredibly important to ensure that quality services are being offered to fuel current client relationships as well as attract new ones. And partners should be focused on managing and developing new business to help the firm thrive long after they’ve gone. However, this is all to no avail if they are not spending time training their next generation of leaders to maintain the legacy they’ve built. Partners need to prioritize succession planning now and see the bigger picture. 

Strategies for Succession Planning 

It can be daunting to develop a succession plan that reflects your vision for your firm 10-20 years from now. However, utilizing some of these strategies can be helpful to take a step forward in the process. 

Evaluate and re-think your firm’s mission and values

Successful succession planning must evolve around your firm’s core values, beliefs, and overall mission. If it’s been a while since you’ve visited this, it’s time to reevaluate. If your firm’s goals have shifted, especially since its inception, then adjust accordingly and make sure everyone is on the same page. This will be helpful determining what you’ve done, where you are, and where you want to go in the future. It will also shape the cultural changes you want to see as you develop a pipeline of future firm leaders. 

Identify your next group of leaders or potential partners 

Create a list of attributes and qualities that you’re looking for in future management and partner roles. If you haven’t already, begin combing through your staff and identify these individuals. Let them know their future looks bright and can have a wealth of opportunities if they continue to work hard and stay with the firm. It also doesn’t hurt to let them know their efforts don’t go unnoticed. After all—there can be no succession plan without any successors! 

Develop training specific to your firm’s needs & vision 

Mold your next tier of leaders by enrolling them in training and/or additional certification classes. Develop these courses and assign these certifications by looking at the skills and capabilities they will need to be equipped with to lead the firm toward more growth and stability. Take into consideration how technology and industry demands will alter the accounting landscape in terms of market share, client expansion, service diversity, globalization, etc. 

Ensure critical items are addressed

This is where things can get really nitty gritty. It’s a big umbrella to categorize all the various areas you need to address in succession planning, but it’s a start. Here are important factors to consider: 

  • Leverage staff effectively and efficiently. Take into consideration the tasks that lower-level staff should be doing to keep future partners focused on other important aspects of firm business. 
  • Put policies in place. Don’t allow personal life to conflict with business. Therefore, clarify acceptable roles and pay for retired partners as soon as possible and when no one is on the verge of retiring so they are not swayed by personal desire. 
  • Protect the firm’s assets. Implement penalties for partners who are leaving that are taking other staff or clients with them. Make sure you put in enough time to protect the firm. 
  • Keep clients happy. Whatever your succession planning happens to be, make sure it’s a smooth and streamlined transition for your clients. They should be notified and only encounter a very small bump in the road when the transition is occurring.
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