Alternative Facts: How Partners Stretch the Truth

A presidential advisor known by all infamously invented what is now an everyday term.  When asked to defend blatant lies, with a straight face, this advisor said the falsehoods were “alternative facts.”

Partners and their firms aren’t immune to creating alternative facts.  Here are some examples:

ARE YOU ACTIVE IN PRACTICE DEVELOPMENT?

Alternative fact: “I’m constantly talking to clients and referral sources about getting business from them.”

The truth:  This is a defensive gesture.  They know that practice development is important but they simply aren’t comfortable doing it.  Since they aren’t willing to admit this, they cite lines such as the one above.  Like most things, if the attitude isn’t there, the results won’t be there either.  80% of all partners at firms $10M and under do very little to bring in business, content to sit back and wait for business to come to them.  But they are quick to cite the alternative fact above to their fellow partners.

WHY ARE YOUR BILLABLE HOURS SO HIGH?

Alternative fact:  “If I do the work myself, it gets done quicker and better.  This way, the work is done at my billing rate, which makes more money for the firm.  Besides, the firm does a lousy job of hiring good people and training them.  So they are of limited use to me.”

The truth:   Many partners do staff-level work themselves because (a) they like it, (b) they don’t trust the staff to make mistakes, (c) they are not comfortable or skilled as delegators and trainers and (d) the firm’s compensation formula pays handsomely for billable hours.  All of this leads to partners’ taking a pass on the training of staff, thus hindering their development, resulting in the staff’s inability to perform work at a level expected by the partners.  A vicious cycle.

CPA Firm Partner Compensation: The Art and the Science is the go-to source for firms seeking “answers” to all the challenges of allocating partner income.  CPA Firm Staff:  Managing Your #1 Asset helps firms hit a home run in managing all aspects of managing staff.  CPA Partner Retirement/Buyout Plans is a must-read for firms needing to revise existing plans or create new agreements.  CPA Firm Management & Governance guides partners who want to run their firms like a real business.  CPA Firm Mergers:  Your Complete Guide was written because every year, thousands of firms consider mergers but have little or no experience with one of the largest transactions in their lives.  What Really Makes CPA Firms Profitable provides best practices in optimizing partner earnings.  How To Bring In New Partners is written for firms wishing to admit new partners but don’t have a modern, competitive method for doing so.

DOES YOUR FIRM HAVE A SUCCESSION PLAN?

Alternative fact:  “Sure we do.  It’s very simple:  We want to stay independent and pass on the firm to new partners.”

The truth.  That’s not a plan.  It’s a dream.  A wish. Succession planning is one of those things that doesn’t occur merely by “saying” you have a plan; firms must actually have a plan to make it happen.  Plans are detailed and in writing.  Plans include proactive systems and processes for developing future leaders.  Plans provide for effective mentoring of staff.  And most important, there must be accountability for implementing the plan’s action steps.

HOW IMPORTANT ARE YOUR STAFF?

Alternative fact:  “They’re just as important as our clients.  Without them, we couldn’t service our clients.  Our partners are able to manage large client bases because we excel at doing a great job with our staff.”

The truth: Today, it’s trendy to say staff are just as important as clients.  But it’s probably a good example of firms failing to walk the talk.  Most partners spend insufficient time helping staff learn and grow because (a) they are too busy with client production, (b) lack the skills to mentor staff and (c) participate in partner compensation systems with sparse recognition for developing staff.

DOES YOUR FIRM HAVE A STRATEGIC PLAN?

Alternative fact:  “Of course we do.  We talk about it all the time.”

The truth:  Talk is cheap.  If you asked partners and staff at most firms to cite the firm’s mission/vision, they couldn’t come close.  To “have” a strategic plan, a firm needs to have (a) a written plan document, (b) SMART goals that support achievement of the firm’s vision, (c) partner accountability and (d) rewards for those who achieve their goals. Without these, strategic planning is an alternative fact, not the truth.

THE GOOD NEWS IS THAT PARTNERS CITING THE ALTERNATIVE FACTS ABOVE CAN BE CURED WITH STRONG LEADERSHIP AT THE TOP