One of the major challenges to internal succession is the measurement of internal capacity and available talent against the projected timeline of the partner(s) succession. A simple test is to perform something like the below chart. Identify the role and responsibility of the projected timing and partner. Benchmark that against internal capacity, talent and readiness. Answer the question: “Can we make this work with what we have in-house?” If the answer is “No”, then evaluate the other components of this Internal Succession module to evaluate what is necessary to procure a solution. An external solution may be the answer or you may be very close to possessing the necessary tools to create an internal solution.

Partner Succession Projection

(RR=Role Reallocation RS=Role Succession)

Partner 1-3 years 4-7 years 8+ years


Some would ask why Partners D & E, though they have the same timing, are being designated differently; Role Reallocation v. Role Succession? This circles back to the ability of a firm to replace both role and responsibility. In the example above Partner E had a responsibility that could not be replaced with current in-house capacity or ability and therefore needed a different solution. In this case the role needed a succession solution and that might need to be an external solution. Another vital consideration when considering the timing to either reallocate the role or provide succession for the role is the number of times per year the retiring Partner interfaces with the clients for which he or she has responsibility. The less frequent the clients are seen the longer the required transition.

Another common challenge is that a firm does not take a progressive posture or develop a strategic plan until there is an issue. It is our opinion an internal succession plan is “firm insurance” as it helps to insure the continuity, profitability and longevity of the firm. Insurance does no good if you secure it after the catastrophe. This is also true of an internal succession “insurance” policy.

A significant challenge to internal succession is the profession is experiencing a decline in the number of CPAs seeking careers in public practice; the majority opts to seek careers in industry. There are a number of reasons why this is happening. To list those reasons serves no purpose except to say it is causing an issue with the ability to consistently attract younger talent.

It is our experienced opinion that smaller and mid-sized firms will need to take a much more active role to seek out partner mentoring, training or development programs for their professional and manager level staff. Most small and some mid-size firms are at a distinct disadvantage as they cannot lure talent from the regional or super-regional firms due to constraints such as professional upside opportunity or limited ability to compete with the larger firms on a net total compensation package offer, so it becomes incumbent upon them to develop their internal talent… or, understand they must seek an external solution.

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