One Firm Concept
The most commonly touted solution to the "Multiple Firms under One Roof Concept" is logically called "The One-Firm Concept." Interestingly enough, it is the model used by corporate clients. Although this model is widely discussed in CPA and CA firms throughout the United States and Canada, the record for its implementation is marginal. Why? Because, for this model to work, decision-making authority (not everything done by consensus) with a strong standard operating procedure (SOP) foundation has to be in place. Most firms are not willing to invest the required money, time, and resources to create this model, for a number of reasons. Partners tend to be reluctant to give up the privileges they have grown accustomed to receiving. An investment is required to close the competence gap between average employees and superstars (even though, currently, the superstars’ performance may be adequate to sustain the firm). Finally, an unprecedented level of accountability to the firm is required. Specifically, in the one-firm concept:
- The firm owns the clients rather than the partners owning the clients.
- The actions of the partners must always be in lock-step with the firm’s goals, not with personal agendas (i.e., the firm comes first).
- There is clear distinction between being an owner and having autonomy to do you as please.
- Strategy drives the budget process, and compensation is tied to budget achievement; the notion of pay-for-performance should be part of the firm’s foundation. This approach creates a direct link between compensation and strategy achievement.
- All members of the firm must be accountable, not just non-partners. Standard operating procedures and firm methodologies should be formalized and followed by everyone, with consequences for noncompliance.
- The firm must constantly make necessary investments to support long-term success, such as formalized employee development, training and pathing; technology integration; structured marketing prcesses and procedures; and more.
- The firm-rather than individual partners-should control decisions on client acceptance and assignment to partners or managers or staff to those clients.
- The firm should shift clients between partners and managers to create a balance of work and expectations instead of allowing personal empire building.
Moving to the One-Firm Concept is a difficult path, but one larger firms often quote as their current reason for success. What might add insight to this process is to read about our services pertaining to moving from the superstar to an operator model. The biggest problem of the "Multiple Firms under One Roof Concept" is that as firms grow, they enter into what we call "No Man’s Land." This is a place where decision-making authority is so diluted that every action taken has to be approved by the entire partner group (or through management by committee). Typically, firm stagnation and frustration occurs while in this state and often results in the firm splitting into multiple firms. This split usually puts both firms back into a position where one or two partners can drive the decision-making process and, lo and behold, the firm is off to the races once again. And so the story often goes that with a firm’s continued growth and success, it will often find itself at a size where breaking up, or moving to a One-Firm-Concept, are the two logical alternatives. We help firms navigate from one model to the other, or just help them maximize their objectives within their model of choice.