Should Business-Getting Be a Criteria for Making Partner?
Before I do, let me say this loud and clear: I think it’s a good thing for firms’ partner criteria to include a provision for bringing in business.
But the issue isn’t whether or not requiring new partners to be business-getters is a good idea. The real issues are: (1) What is a successful firm to do if it’s up-and-coming staff aren’t business-getters? Close up shop and merge out of existence? I say no. (2) Aren’t there ways for firms to grow their revenues other than individual rainmaking? I say yes.
80% of mainstream partners at firms under $15M are not business-getters. So, requiring staff to bring in business as a prerequisite to becoming partner would eliminate the vast majority of staff from consideration. As much as firms would love to maintain the business-getting standard, most simply can’t afford to be so picky. They’ll never get new partners and they will eventually lose great managers.
A great way to develop a big client base is to have one to start with and build on it. In my experience, this is by far the most common approach to building a client base. The average partner today from firms $15M and less is age 53, manages a client base of $1.1M and earns $350 to $400K a year.
The majority of these partners were promoted to partner without being business-getters. Over time, they brought in some business themselves, had clients delegated to them and inherited clients from retiring partners and acquired practices. This was supplemented by cultivating client relationships and referral sources. In other words, they did a great job building on a client base they started with.
Gordon Krater, MP of Plante Moran, recently said:
“If you are a manager on a job, you’ll become responsible for the client as a partner because it’s easier for partners to build their book this way vs. going out and finding new clients. We actually limit our partners from having too large a book.”
Caveat #1: Anything in excess can be harmful. Firms have to be careful about tipping the make-up of its partner group too heavily towards non-business-getters. Otherwise, they may find themselves with a partner group that has no business-getters.
Caveat #2: Eat-what-you-kill firms beware. A liberal philosophy of transferring clients to new partners will be difficult for firms on the formula method of partner compensation. Partners won’t like transferring clients to new partners if their compensation suffers.
Aren’t there ways for firms to grow revenues other than individual rainmaking? Listen to what one of the world’s leading accounting firm growth and marketing consultants, Gale Crosley has to say:
“Complex market conditions are driving the need for a more sophisticated approach to growth, and a new model has evolved. The traditional growth model, which featured individual contribution by book-of-business partners, tactical maneuvers such as banker/lawyer lunches and a generalist market approach, is now old school. The new growth model, developing in many progressive firms, features a leader-driven approach, the development of marketing strategies versus random tactics, and a deep commitment to specialization, service delivery and the use of social media, cloud computing, video conferencing, and mobile technology. The most cutting edge firms are changing almost everything, including staff career paths.”
So, I’ll close by repeating: I think it’s a good thing for firms’ partner criteria to include a provision for bringing in business. But firms of today shouldn’t adopt this as a rigidly as they have in the past.
Our monograph, How to Bring In New Partners, is a step-by-step guide, with checklists and templates, for firms looking to bring in new partners.
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