RECENT CONSULTING PROJECTS

OF THE ROSENBERG ASSOCIATES

Converted a $9M firm from a formula method for partner compensation to the comp committee approach. Marc presided over their first meeting to walk them through the process, ending with the allocation of income.

Assisted a $15M firm in creating their first ever partner retirement/buyout plan. This was especially challenging because the firm’s founding partner was dominant in developing a highly profitable firm over many years.

Advised a $23M firm in considering upward merger proposals by two regional firms.

Facilitated the retreat of a $14M, 12 partner firm. The focus of the entire meeting was strategic planning and partner accountability.

Provided Expert Witness testimony on the validity of non-compete and non-solicitation provisions in the partner agreement of a large firm.

Conducted an on-line, Upward Evaluation Survey by the staff, of the partners and managers of a $5M firm. The Rosenberg Associates has developed its own proprietary on-line survey as an upgrade to a “paper survey” they have been using with CPA firms for over 10 years. This is the only substantive, on-line Upward Evaluation Survey in the CPA industry, designed specifically for CPA firms.

Performed a Practice Management Review of a 7 partner, $6M firm. Areas identified for future improvement included getting the partners to leverage themselves and work less billable hours, improving partner relations and communication, clarifying the managing partner’s role, nurturing the staff and succession planning.

Facilitated a merger of equals – a $3M firm and a $2M firm. There were many areas in which the two firms were highly compatible. But there were some challenging areas that needed work such as assessing the compatibility of the two cultures and several differences in the financial and governance structure of the two firms.

Provided Expert Witness testimony in the case where two partners in a firm split up and were in disagreement over how the value of the firm should be allocated between the two.

THE ROSENBERG ASSOCIATES’

NATIONAL E-MAIL ROUNDTABLE

We have assembled an elite group of 110 managing partners from across the country who respond to practice management questions posed by the various firms. We collect the responses and share the results with all members of the roundtable. Here are some recent issues that were addressed:

QUESTION #1: What are firms doing in the way of assessing penalties to partners who do not bill their WIP on a timely basis?

RESPONSE: Roughly 1/3 of the firms assess penalties and 2/3 do not.

Of the firms that assess penalties:

• One firm said: “Each partner gets a bonus of $1,000 if he/she bills his/her WIP on time. If a partner does not bill on time, his/her bonus gets reallocated to those who were timely.”



• Several firms factor weak billing into the determination of year-end compensation distributions.



• A few firms reduce partners’ paychecks by the amount of the excess WIP.

Of the firms that do not assess penalties:

• The common thread was that billing timely is part of the firms’ culture and therefore, financial bonuses and penalties are not needed.
  
  
• Two firms said penalties aren’t needed because the MP personally reviews partners’ billing on a regular basis.

QUESTION #2: Have any firms purchased insurance coverage for lawsuits from employees and prospective employees?

RESPONSE: Several firms had procured this coverage. Insurers included Camico, CPA Mutual, Beazley Insurance Co., Philadelphia, U.S. Liability Insurance Co. and Chubb. Coverage limits were mostly in the $1M range. The most common deductible was $5,000.

QUESTION #3: Do firms keep originals of engagement letters and rep letters or do they only keep scanned-in copies?

RESPONSE: Firms were split 50-50 on this.