One or multiple partners in your firm are 6-24 months away from retirement. Generational demographics and industry trends make this a near certainty.
I know this, and YOU know this. Do your CLIENTS know this?
The planning and preparation for a partner retirement takes years to be done correctly. Clients will take the news best if they hear it before the changes that will need to be made along the way suddenly or drastically impact them. If your partner announces to a client that his retirement will be in two years, introduces the new partner, and makes assurances that the strong manager on the team will remain the same (or perhaps that the strong manager will BE the new partner) and then service continues smoothly, all is well! You have a high likelihood of retaining that client.
If, on the other hand, your partner is retiring and the client learns about it from an invitation to a bon voyage cocktail party, they will be likely to spiral down the “what will this mean for me?” trail that may end with them finally calling that CPA in their networking group that has been patiently waiting for exactly this occasion. There may be a way to keep this client, but it might come at a cost.
Yes, these are the two extremes of the possible retirement plans. My point is that time stops for no one and that retirement date is coming. And as much as we respect and are grateful for that retiring partner’s contributions to the firm over many years, there is a silver lining. You’re opening up a spot for someone new to join the ownership ranks.
(Pause for dramatic effect)
If your thoughts upon reading that sentence went to the smiling face of the manager you’ve been grooming over time who will be over-the-moon excited to take on full responsibility for a book of business as well as firm management responsibilities, congratulations.
But I happen to know that most of you are not in that position.
So, today, right now, I encourage you to take a few minutes to consider the next two years for your firm’s leadership. Write down the name of the retiring partner, his major clients, what types of questions only he can answer (if, for example, the retiring partner is your most technically savvy tax partner or an industry expert), what important external relationships or memberships he has, and your strongest managers familiar with his clients. Repeat this for every partner retiring in the suggested 24 month window.
Now send a calendar invite for a partner meeting (or add this agenda item to a regularly scheduled partner meeting). Prepare to discuss the fact that the partner is retiring, the clients and areas of intellectual prowess you’ve listed during your prep time today, and the strengths and weaknesses of the managers who may want to be partners. Make strides toward getting everyone on the same page of realizing that a retirement plan must begin now. Then, the real work begins:
- Make a plan and agree to hold each other accountable. Appoint one person to be “in charge” so it doesn’t become that everyone – and therefore no one – is responsible.
- Draw a quick calendar (by quarter is fine) that spans from now until each retirement date. On that calendar make a plan for important milestones in the transition.
- Decide on a message to tell clients and set deadlines for these conversations.
- Start to build on the strengths and develop the weaknesses of your managers. Inform them that they are partner-track material, discuss what partnership entails, and discover whether they are interested in this path. Don’t take anything for granted!
- Communicate internally with everyone. Yes, everyone! Your staff knows who will retire next and they’ll feel more confident knowing you have a plan than if they think you don’t.
- Keep this on the agenda for your partner meetings to ensure that progress continues.
- Discuss contingencies since it’s nearly impossible for Plan A to work as smoothly as you might hope.
This is a multi-faceted plan as you can see. But is it marketing? I would argue yes. A well-defined retirement plan involves message development and communication, manager coaching and development, internal and client communication, and brand continuation. And that’s without focusing on the details like a letter to clients, event planning, or website and social media updates.
I write this to motivate you to do the hard work that will enable your firm to remain a success through this period of transition. Just as you advise your clients on issues like this, now you’ll have to apply your knowledge to your own organization. It will be much harder than you think. So, if you need to, find outside help, like your clients do with you.
There are two steps most important in this process… 1. Get started. 2. Don’t stop until you have a cocktail in your hand at the bon voyage party.
If you have questions about this process, or if you want to add me to your party guest list, contact me!
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