Every firm is working through the succession maze and dealing with the exit of key partners in the firm. It is the Baby Boomer Bubble up close and personal, which I have written about and which every firm that I work with is dealing with.

There is no question that the most profitable firms (defined as high per partner income) in our profession have figured out that leverage and a well-managed pyramid is one of the key ingredients. Why is it then that so many firms, and I would suggest the majority, are struggling with just the opposite – an upside down or inverted pyramid where there are lots of partners and managers but few staff.

CPA firms are wrestling their way through partner retirements and the accompanying succession issues in numbers that the profession has never seen before. It’s the Baby Boomer Bubble, up close and personal. Our succession planning should focus on replacing that retiring partner’s contribution on several fronts. Depending on the role of the retiring partner in the firm we will experience varying levels of pain surrounding things like replacing significant knowledge or technical expertise, backfilling a block of hours to get the work done and shoring up voids left in firm leadership.