Posts Tagged ‘cpa-firm-partner-retirementbuyout-plans’

Over the years, we have worked with a number of small firms that had the following dilemma: What to do when the partners are all in their 60s and none wishes to buy out the other? This problem is particularly acute with two-partner firms, though can be troublesome for other firms with multiple partners wanting…

We always tell people that we’re one firm smarter than the last firm we worked with. As consultants, we learn from our clients and our 25 years of CPA firm client experiences are shared with every firm we consult with. The title of this blog is one of those learning moments. A circuit breaker is…

The first question many of you may ask is: What in the world is AAV? I’ll try to keep it simple. It’s one of six methods that CPA firms use to compute the goodwill-based buyout for a retiring partner at a multi-partner firm. About 64% of multi-partner firms use either the Multiple of Compensation Method…

We often get questions from readers of our books related to the practice management topics that are important but unfamiliar for practitioners. Below is a question we’ve heard more than once on valuing the goodwill for a partner buyout, and our thoughts. QUESTION – PART 1: I’m a partner with a local firm. I have…

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.” …

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…

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. …

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…

  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…