Most Accounting & Advisory firms were founded by managing partners who were great rainmakers, developing a disproportionate part of the firm’s new business. Some of these legends are still in place. Most have been succeeded by future generations of managing partners who are heavily involved in firm management, particularly for firms that have reached a size approaching $100 million in revenue. This mirrors other industries where management-focused CEOs have succeeded the firms’ evangelical founders. Is this a good thing?
In part yes, in part not necessarily. Larger firms need to be managed and the managing partner needs to play a key role getting this done. They also need lots of partners contributing to the firm’s new business to support a scalable growth model, and making this happen creates a greater need for management. Yet, there are certain key things that will not be done well without active managing partner external involvement:
Exploring acquisitions. — More and more, firms are growing by acquiring other firms to add key talent, expand into broader consulting areas and broaden geographic presence. Doing this properly requires active managing partner involvement — long before is a real deal on the table.
The success rate in finding great targets is heavily increased when the networking and broker discussions are led by a managing partner. If your managing partner knows the managing partner of a potential target, the odds are much higher that trust can be built as the foundation for a possible deal. This takes constant and effective networking with smaller firms.
Similarly, there is just no substitute for having your managing partner look a broker in the eye to commit your firm to a search and to let the broker know the confidence that is being place in him. Look at the firms that are making successful acquisitions. Their managing partners are actively involved at every stage of the process.
Partner-level recruiting. — If you want great candidates to take you seriously, your odds increase quickly if your managing partner is leading the charge. First, recruiters will pay much closer attention to your searches. Second, potential candidates are almost guaranteed to agree to meet with your managing partner. And, once this meeting takes place, the managing partner is best at sizing up the candidate and lining up the best partners for follow up meetings.
Top talent at the partner level is tough to get. Each hire is like a mini-acquisition — often better because no dead wood is involved. If you want to win at this game, your managing partner needs to open the deal, stay at the table and close the deal.
Meeting with Important Potential Clients. — Particularly in the middle market, client owners are impressed when the managing partner shows an interest in their business. Many senior executives have told me that a key element influencing their choice of accounting firm was the personal commitment of the firm’s managing partner. To quote an owner of a privately held company: “their managing partner takes my calls. That’s the kind of access I need from my closest advisers.” Your managing partner doesn’t need to pound the pavement chasing business, but he does need to show up and say the right thing if your firm wants to close more new business.
Meeting with Existing Clients. — Your firm’s client relationships will be strengthened if your managing partner meets with key clients. It will also make your managing partner more effective. As one managing partner recently put it: “clients make me smart. They keep me in touch with the market, what’s really going on. When I call them for a reference or to settle an issue, I’m talking to a friend. That really helps.” How much time should be devoted to this? A good benchmark is to shoot for a client meeting a week on average.
We can’t stress how important it is for managing partners to get our there, leading the firm externally as well as managing it.