Partner Selection Process

The annual balanced scorecard process is the foundation piece for identifying future partners. It’s imperative that all participants give their very best effort in evaluating the firm’s managers and senior managers and in providing honest feedback and constructive suggestions for improved performance.

The firm’s balanced scorecard addresses the following performance categories, using the evaluation scaleshown below:

Performance Categories

  • Personal Effectiveness
  • Client Management
  • Business Development
  • Financial Management
  • Team Development
  • Leadership

Evaluation Scale

1–2 PoorPerformance

3–4 MarginalPerformance

5–6 GoodPerformance

7–8 ExcellentPerformance

9–10 World Class Performance

All individuals should be scored as if they were equity partners in the firm. This ensures income partners and managers receive scores proportionate to the equity partners until they are ready to be promoted to the next level of ownership. The acceptable range of performance scores is listed below.

Equity Partners: 38 to 44

Each equity partner is expected to achieve a score of excellent in four of the six performance categories and good in the other two. Current equity partners who consistently score below 38 should be placed on a watch list and may be subject to demotion or dismissal to make room for individuals who are performing at the equity ownership level.

Income Partners: 32 to 37

Each income partner is expected to achieve a score of excellent in one of the six performance categories and good in the other five. An income partner who scores 38 or above and who has had consistently high scores in the income partner range may be nominated for equity ownership. The individual’s name will be presented to the equity partner group along with his/her financial performance statistics for the past three years. Statistics will includethe following:

annual revenue production

engagement realization on clients for whom the individual is responsible

aged accounts receivable

aged work-in-process

new business generated from existing and new clients

To be invited into the equity partner group, the nominee must receive a positive vote of at least 75% of the equity partner units.

Any manager who has scored 32 or above and who has consistently scored 30 or above in the past will be nominated for ownership as an income partner in the firm. The individual’s name will be presented to the entire partnership group (both income and equity partners) along with his/her financial performance statistics for the past three years. Statistics will include:

annual revenue production

engagement realization on clients for whom the individual is responsible

aged accounts receivable

aged work-in-process

new business generated from existing and new clients

To be invited into theincome partner group, the nominee must receive a positive vote of at least 66.67% of the income and equity partner units.

If an individual is nominated but not elected, the partner group will identify the issues the individual must address to receive apositive vote in the future.

The firm’s total net revenue is an important consideration in whether or not individuals will be added to the partnership group. The firm’s goal is to have a minimum of $1 million in net revenue per equity partner and $500,000 per income partner. For example, with $6 million in net revenues, the firm could have five equity partners and two income partners. Other combinations that equal $6 million in net revenues are also possible. While these numbers are not etched in stone, it’s important that the number of owners not marginalize the firm’s financial performance.

High Performance Firms: Partner Selection Process