Partner Intangibles
Marc Rosenberg, CPA
It’s often been said that it’s more important what a partner does with his/her non-billable time than billable time. Since a large portion of billable work performed by partners can be done by a staff person, firms need their partners to delegate billable work so they can focus on growing the firm, making it more profitable and successful. Examples of intangibles are practice development, developing staff, managing the firm, cross-selling, teamwork and living/breathing the firm’s core values.
A quick check of The Rosenberg Practice Management Survey shows that 80% of all partners posted 1,200 or less partner billable hours. One of the main reasons for this being less than half their total hours is to free up their time to perform the intangibles.
If performance of intangibles is so important, how should this be factored into the firm’s partner compensation system? In recent years, more and more firms are acknowledging the important of partners’ intangibles and are finding a place for it in their partner compensation systems. But they struggle with how to measure and evaluate performance in intangible areas. It can be done; it just takes a little more work. For example, upward evaluations of partners by staff are a good way to measure the partners’ impact on staff development. Formal written goal setting programs are another way to measure intangibles.
I would love to hear how your firms recognize the value of partner intangibles. How do you factor intangibles into your partner compensation systems?
For my free handout listing 27 Intangible Performance Attributes for Partners, contact me and I will gladly send you a copy.
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Sorry, the survey does not have this data. We tried to survey this a few years ago. I know you will find this hard to believe, but the data we got back from firms was SO BAD, that we decided to drop the question. However, I CAN tell you from my consulting experiences with firms, that accrual basis capital of most CPA firms is 20-25% of net fees, with the vast majority of this number A/R and WIP. If you are the one in a hundred CPA firms that has significant bank debt on your books, then capital will be lower.
Thank you.
Thanks for asking for it. It’s already in the mail to you.
Thanks for asking for it. It’s already in the mail to you.
I’m quite pleased with the information in this one. TY!
Hi Marc – Would you please send me the intangible performance attributes for partners? Thank you Roxane
Please send me the Intangible Performance Attributes for Partners.