Admittedly there is more than one component necessary to developing a successful internal succession solution. But if we had to choose just one based on our experience of working with dozens of firms, large and small we would offer that it is necessary to acknowledge that the majority of firms do not possess or have not created a complete and constantly active plan for what we refer to as the internal "TRAC". TRAC is an acronym for Transitioning Roles Achieving Continuity.
First and foremost we must address the fact that "times change."
And with that change has come about a different set of goals, needs and expectations. It may not be entirely fair to suggest that younger CPAs do not possess the same work ethic or are not willing to work as hard as the more tenured professionals. It is important to realize long hours do not necessarily translate into more productive hours. Also it is necessary to address the fact that generations grow (and age) together. This simply means new business will come from younger business owners and it is important to have a connection to the upcoming generation of business owners and successful individuals. To believe that the firm itself should stay the same - same process, same procedures, and same methodologies - while the world changes around us might be short-sighted.
Do not change your rules of business, but know that the most successful firms adapt their rules to match the direction in which the business world is changing.
Accept that the partners or owners are responsible. It is the responsibility of the partner group or owner(s) to create a clear and defined path for someone to become a partner and eventually get to sit in your chair. It is the responsibility of the partner group or owner(s) to mentor the internal talent and provide the tools to be good managers, good leaders and good owners. Very few have the innate ability to be all of these things without some guidance or assistance. The chance of a person with all those established skills and abilities walking into your firm and asking for a position is not probable. The chance of a person walking into your firm with loads of raw skills and asking for a position is highly probable. Even a diamond needs the exceptional skill of a diamantaire (a highly skilled artisan responsible for cutting and polishing a diamond) to become a sparkling gem. Your staff's raw talent is no different than the diamond. The better you possess the skills of the diamantaire the more your staff and upcoming partners will shine.
If a firm adopts this responsibility to a complete partner development, it is then the individual's responsibility to embrace the program and actively participate, in order to demonstrate their willingness to achieve the levels of competency and leadership required of a partner.
The key success component to developing an internal succession solution is to become a diamantaire for your firm. This is your legacy. (It is also a very good idea if you want to receive your entire buy-out!)
For more information please read this article:
How to Manage Internal Succession by Joel Sinkin and Terrence Putney, Journal of Accountancy, c2014
Planning and Paying for Partner Retirements by Joel Sinkin and Terrence Putney, Journal of Accountancy/AICPA, c2012