Appointing a new equity partner can be an effective way to underpin the continued growth of a firm, particularly when they bring an existing fee base with them. This can mean increased profitability, increased stability or increased problems, if you do not pay attention to the terms.
One positive effect of Covid-19 has been a freeing up of the labour market for high-end professional staff – most notably in the accounting profession, which is something we have not seen in decades.
Some firms are tightening their belts and shedding senior staff in response to market conditions.
Somewhat paradoxically, the result is that this may be a good time to consider growing your business by adding a partner.
For practitioners transitioning to retirement it can provide an opportunity to extend their life in practice (and hence their income.)
However before you make this step it's important to ensure that your offer is not out of step with the market as this could drive away quality candidates.
A case in point (and the reason I’m prompted to write this article) is a conversation I recently had with a very capable and qualified CA with 15 years of experience. He called me after walking away from a partnership opportunity because the offer terms were poorly formulated and incomplete. The firm he was dealing with lacked clarity on the offer and the result was an experience that the candidate described as "totally unprofessional".
For the firm (who is presumably still seeking a qualified partner) that’s a lost opportunity.
When a firm is attracting a partner candidate many do not realise that there is a significant step up in requirements as compared to the recruitment of a non-equity professional staff member.
At this level you are attracting someone who is looking to go into business with you. You are not just advertising a position - you are making an offer that will be seen and judged alongside other offers in the marketplace.
You are in competition with all the other firms for the best partner candidates. Preparation is essential in order to make your best first impression.
This is where we can help. Practice Exchange has been constantly active in the partnership space for many years and we're able to provide guidance to help you formulate your offer, including:
- the kinds of deals currently being offered to attract partners
- how these deals are being structured
- what candidates are currently seeking positions
So if you’re considering taking advantage of the pool of skilled professionals seeking partner positions, take heed and be prepared well in advance.
If you’d like to talk in details about partner opportunities, feel free to contact me (Mark Witt) at Practice Exchange on 1300 722 452