I thought I would share with you my general definition of a partner’s roles and responsibilities. While I am not suggesting that this is the only effective definition of a partner’s roles and responsibilities, I am suggesting that it is, at the very least, a best practice definition. Since my practice area focuses on how to better run a CPA practice, logically, starting at the top with the firm’s partners is the right beginning. So without further adieu, generally, here is what I expect from the partners:

• Partners are responsible for client account management. This includes:
  
  • Maintaining client satisfaction with, and loyalty to, the firm,
  • Continuously updating their understanding of client’s priorities,
    
  • Meeting with “A” clients at least 4 times a year, “B” at least 2 times a year
    
  • Identifying additional services that would be beneficial to those clients
    
  • Providing a high-level oversight of the work performed for those clients
  • Billing and collecting fees
• Pass down the regular contact and billing/collecting responsibilities of “C” clients and potentially some low level “B” clients to managers
• Maintain a constant connection with key referral sources
• Leverage the work being performed for the clients you manage. Partners do client management first, Managers do project management first, staff does detail work.
• Focus on developing people and building a right-side up pyramid
• Implement firm strategy
  
• Price projects above firm established minimum levels of realization, move “D” clients up or out, stop clogging the firm with bad work
• Actively promote and comply with firm-wide initiatives

Clearly, in order to live up to this role, partners have to spend time meeting with, listening and trying to understand what keeps their top clients awake at night (i.e., understand the concerns and opportunities they are trying to address at this time)? The importance here is not about selling services (which you will), its not about looking for services your firm offers (which will happen), but about uncovering issues regardless of whether or not you are able to resolve them. The great news is … “simply by understanding the needs of your clients, you can live up to our profession’s mantra of being your clients most trusted advisor.” You become the first point of contact when your client has a business problem. Most CPAs are already the first point of contact regarding a financial problem, but that is far different. By understanding what is keeping your clients awake at night, you put yourself and your firm in the place of most potential to 1) help them, 2) to refer other professionals to help them or 3) to just be supportive. All of this builds stronger client loyalty as well as higher satisfaction.

In order to fully understand the role outlined above, I need to take a minute and define what I mean when I mention A, B, C and D clients. The narrative below should shed additional light on the partner role identified above.

1. An A client is often defined as one of 15 to 20 percent of the clients that make up 70 to 80 percent of the firm’s revenues. If you sorted your clients by revenues for last year, you would quickly identify those clients that generated substantial fees for your firm. An A client is one that you are probably adequately serving, one that will continually have new projects for you to do, and one that generates sizable revenues for your firm.
   
2. A B client is one that you are right now most likely underserving, but who has an opportunity to generate sizable revenues for your firm. For example, you might have a business client for whom you only do tax returns. However, based on what you know of the business (for example, they might be $5 million in size or have a 100 employees), you could easily provide them thousands of more dollars in needed services.
   
3. A C client is a client that does not have much additional service opportunity other than what you already do, and the revenues generated are small. However, they are good clients, do not have complex situations, pay you on time, pay average or better fees, and are pleasant to work with. The best description of this group of clients is they are your typical individual tax-return-only clients. Don’t confuse the C rating with school and assume they need to become B clients to make the grade. A firm can have all C clients and do very well.
   
4. A D client could seemingly fall into any of the classifications above. However, these clients present at least one of a number of possible problems. They most likely are unprofitable to the firm as a result of poor rates, realization, and/or utilization. They also might be hard to work with because they are abrasive, late payers, never timely so they always create scheduling problems, always want special accommodations, require services that are too difficult to provide (e.g., the client who is the one governmental audit you perform, which is very inefficient work for you), or only pay your last bill as a incentive for you to start their next project. None of these issues alone automatically classifies someone as a D client. For example, you might have someone that always pays you late, but you charge premium fees for their work, which makes him/her an acceptable client. Or, someone may constantly negotiate fees, but nevertheless involves you in big projects that are profitable. Generally speaking, most firms know quickly who falls into their definition of the D category. At the end of the day, you do not want any D clients. This means that your objective is to either find a way to convert them into C clients or better, or introduce them to your fiercest competitor. In the latter instance, these clients can then waste your competitor’s resources instead of yours.

The most fundamental role of a partner, and in some firms the managers, is centered on client relationship management. Here is more definition around this critical function:

• For “A” and “B” clients, a partner or manager should be assigned as each client’s “relationship manager.”
• Quarterly update meetings should be scheduled for all “A” clients and at least semiannual meetings with all “B” clients. At some point, these meetings will become billable, but in the beginning, the investigation necessary to fulfill to role of relationship manager can be done through a lunch outing.
• Each relationship manager, through regularly scheduled meetings, should be able to rattle off their clients’ top 5 priorities for the coming 18 months. Client relationship managers should know what is keeping their clients awake at night (i.e., the concerns and opportunities they are trying to address at this time)? By the way, an important part of this process is to uncover issues regardless of whether or not the firm is able to resolve them. Think of the relationship manager as the general contractor. For issues that the firm can address, the contractor brings in his/her own people to complete. For issues the firm cannot address, subcontractors (or friendly outside professionals) are referred to provide the necessary assistance.
• Referral sources should be rated as well as clients. “A” and “B” referral sources should have a relationship manager assigned to each with the expectation of regularly scheduled contact.

The above scheduled contact and reconnaissance is accomplished through “active” marketing. The firm is in danger of losing “A” and/or “B” clients when a partner or manager in charge of these relationships cannot at least articulate each client’s priorities. Although the firm will not likely incur these losses overnight, you can bet that critical client needs that go unserviced for too long will attract attention from competition. And with each passing day, with CPA firms continuing to broaden their scope of services, that competitor is likely to be another CPA firm.

Also noteworthy is that it always surprises me how many firms expect professionals to refer business to them, but who do not reciprocate. Providing a referral for a needed service helps the client (they get access to needed skills), helps the firm (referrals out create more referrals in) and underscores why the CPA is the clients most trusted advisor (because the client can easily access the relationship manager’s professional network).

For “C” clients, “passive” marketing is the best way to keep that group enlightened about the firm’s service offerings and active as a quality referral source.

If a client is classified as a “D,” then the client relationship manager of that client needs to develop a strategy to convert them a “C” or better. That strategy could be as simple as:

• We will bill them at 95 percent of the standard rates this year and see whether they want to remain a client.
• We will transition this client to one of our senior staff to manage and bill because the client’s needs are better suited to the senior’s experience level and billing rate.

Alternatively, the strategy could be as drastic as the following:

The partner needs to inform this client that the account must be paid current and kept that way or the client needs to find another accountant.

I don’t believe in firing clients. I believe in making client relationship manager and the client accountable to sustaining a profitable relationship. If the client wants the relationship to be one sided (in other words, profitable only to him/her), then adjust the policies and billings to where they should be and let them make their own decision. Don’t be surprised how many of your “D” clients have become that way because you created an operating environment that steered them in that direction.

As you can see, my message is that partners, and in some firms, managers, need to take their client relationship management responsibility seriously. In most firms, this role is purely an economic assignment. I believe the relationship manager role is the foundation of the firm’s success and should be formalized with CPAs being held accountable. For example, consider the tax partner … the walking tax library for the firm. When this person is the relationship manager for a client, he/she CAN NOT decide to ONLY talk about tax related issues. If that tax partner is the partner in charge of a client relationship, then he/she is obligated to understand that client’s top priorities, both strategically and tactically, across all services all the time. He/she is also obligated to report that information to the firm in some systematic way. And he/she is responsible for finding ways to help the client when possible through extending firm services, referring work to other professionals, staying involved as the client’s advocate, etc.

When you are a client relationship manager, regardless of your technical specialty, you take on the role of being that client’s general contractor for professional services. If you are unwilling to fulfill this role, then you shouldn’t be a client relationship manager, you should be a technical partner.

Bill Reeb, CPA, CITP, is CEO and co-founder of the Succession Institute LLC. He assists professional firms and family businesses with growth, strategy, governance, accountability and performance issues.

bill@successioninstitute.com
www.successioninstitute.com

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