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Don’t Let Retiring Partners Double Dip

Marc Rosenberg, CPA / June 17, 2020

Here’s a question that frequently arises in my consulting engagements:  What are your thoughts on partners wanting to work for the firm in a non-partner role after they retire, who continue to control “their” clients while receiving deferred compensation and a salary for their work? The answer is rooted in the maxim:  “No transition…no goodwill.” …

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Partner Buyout Nuances: Queries from Firms

Marc Rosenberg, CPA / February 8, 2020

Partner buyout plans can be difficult to navigate. We want to be fair to our partners, and we want to be treated fairly in return. In the process, differences of interpretation inevitably arise. Here are some queries we’ve recently received you may find instructive: Partner’s Question:  As founder and rainmaker of our firm, I have…

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Is Mandatory Retirement a Best Practice?

Marc Rosenberg, CPA / January 20, 2020

I’ll start with the punch line.  Yes, it is a best practice. But only if your firm’s vision is to stay independent into the next generation by developing future leaders and retaining retirees’ clients. If you are a small firm with partners who love what they do, have no hobbies to pursue in retirement, and basically want…

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The Essence of a Well-Crafted Partner Buyout Agreement

Marc Rosenberg, CPA / September 23, 2019

CPA firm partner retirement/buyout plans have always created angst among partners.  Prospective and young partners often question the plans because they see themselves paying into some sort of Ponzi scheme, wondering if their payday will ever come.  The departure of impactful retiring partners seems to jeopardize the future viability and hence, value of the firm. …

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Signing A Partner Buyout Agreement: A Spectacular Investment for New Partners

Marc Rosenberg, CPA / August 14, 2018

Sounds counter-intuitive, doesn’t it?  How can assuming a significant debt obligation be a great investment?  Bear with me. For years, CPA firm partner retirement/buyout plans have been controversial.  Buyout plans have been around for decades, with trillions of dollars paid to retirees during that time.  It’s a practice that works.  So why is there controversy?…

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Retiring Partners – Double Dipping?

Marc Rosenberg, CPA / August 14, 2017

A reader’s question: Our firm has started to buy out a key partner, who is 65.  After giving notice of his retirement and after he “retired,” he is still managing and controlling his clients and has begun the transition process. He is still doing some non-billable management work, too.  He plans to stick around until…

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Is Mandatory Retirement Still Legal?

Marc Rosenberg, CPA / June 19, 2017

  Laws seem to be moving towards making mandatory retirement illegal due to age discrimination.  Can CPA firms still safely provide for mandatory retirement in their partner agreements? Let’s be clear what mandatory retirement means in practice. The extreme definition, used almost exclusively at giant firms, is that partners must retire cold-turkey, or close to…

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The Mandatory Retirement War – A Reader’s Response

Marc Rosenberg, CPA / August 29, 2016

Last week, we received several comments to our post on mandatory retirement, evidence that this concept is indeed controversial. This week, let’s drill down further. Firms’ positions on mandatory retirement vary widely.  According to the 2016 Rosenberg Survey, 88% of firms over $20M have mandatory retirement compared to only 60% of $2-10M firms. My mother…

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The Raging War Over Mandatory Retirement

Marc Rosenberg, CPA / August 22, 2016

Few topics today are more fiercely debated at local CPA firms than mandatory retirement. Here are the two camps: What’s-best-for-the-firm:  First and foremost, we need to think long term to perpetuate the firm. We need an orderly transition of clients and firm management to new leaders. We need a predictable progression of staff from entry-level…

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Ask Yourself: Why Are You Successful?

Marc Rosenberg, CPA / June 13, 2016

I recently bought a new car.  I was sitting in the office of “the finance guy,” who just turned 30 and seemed astonished when I told him what I do for a living.  He clearly was ambivalent about being “the finance guy.”  He asked me:  “What do I do to be successful?” What follows may…

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