Partner's Report for CPA Firm Owners

Do you know the "cultural indicators" that can increase your firm’s professional liability exposure? Even though you and your fellow partners may be avoiding the risks of ineffectual firm management, incompatible practice areas, and ineffective training, there are other risks that may be overlooked. These include:

• The firm has no current partnership agreement.
• Partners devote little time to professional development.
• Partners put fellow owners at financial risk without the owners’ knowledge.
• Partners and other firm leaders don’t know how profitable other partners, clients, or practice areas have been over time.
• The firm has no transition plan for retiring owners.
• Partners are unaware of future firm plans and are unsure whether they want to remain.
• Partners lack shared goals.
• Firm leaders are not apparent, and groups of partners or individual partners refuse to be managed.
• Compensation systems place undue emphasis on and reward personal production.
• Partners have no plan for the firm’s survival once key leaders retire.
• Practice management systems are stand-alone, so CPAs can’t share calendars, case management, conflicts systems, or trust accounts systems.
• The firm does not have a system of accountability in place.
• The firm is weighed down by unpleasant and unprofitable clients who require too much of partners’ time.
• The firm’s monthly cash flow is strained, it’s sometimes difficult to meet payroll, and there is a need to borrow from client funds to bridge the gap.
• Personal agendas take priority over firm interests.
• The firm relies on an "eat what you kill" reward system.

Source: PR staff