Barriers to Successful Client Transition

Client transition is a hallmark of a healthy and growing firm. The ability to transition clients well will impact the longevity of your firm, buyouts from retiring partners and successor interest. Because of this, it should come as no surprise that many CPAs/partners in the profession are concerned about how to prepare for successful client transitions. For client transition to thrive, there must be cooperation and a mutually shared objective between the passer (the one transitioning the client) and the receiver (the one inheriting the client).

As we’ve worked in and around client transitions, we’ve noticed 5 common barriers for passers. Depending on the scenario, some of these elements may be more, or less prevalent.

1. Trust is the number one inhibitor to transition or delegation. We hear the following excuse all the time, “we just don’t have the right people to do the work.” Oftentimes, poor management/delegation is to blame – not a lack of manpower. One of the best things you can do for your passers is to help them uncover the drivers of their trust issues. Once you’ve addressed the “why,” you can coach your passers to begin building trust with their receivers.
2. Most passers, at some point or another, worry about whether their receiver will deliver the same quality of work. Will it be as good? What if they don’t do it the same way? What if all my hard work is for nothing? Developing people early will ensure these questions don’t keep you up at night.
3. Personal relationships are built with care, over a long period of time; so oftentimes, clients become our friends. In these situations, they key is for the passer to let their client know they’ll be available if absolutely needed, but that the transition receiver or team will be running point. It’s important to instill confidence in your receiver(s) up front so your clients (and you) don’t feel abandoned.
4. So much of our identity can be wrapped up in our work. We heard of one firm that required retiring partners to go through counseling after transitioning their clients. Let’s put it on the table – letting go isn’t easy, but leaving a legacy requires you to eventually leave. Don’t forget to empower your retiring partners when they reach this point.
5. As partners’ approach retirement, their current compensation may be negatively impacted by the transition of their billable work. Safeguards should be put into place to ensure they are rewarded during transition.

Receiving can be more difficult than passing. Receivers are tasked with maintaining yardage while trying to catch the ball. Many firms fail at supporting their receiver because they forget to consider these vital components for success. Here are 4 common barriers for receivers.

1. Receivers are usually trying to maintain respect and not overstep. When entering an established relationship, they don’t want to push too hard or too often. Unfortunately, this passivity can be interpreted as a lack of initiative and can add fuel to a passer’s trust issues. Set your receiver up for success by allowing them to shadow you early and often. Pass the ball at close range so your receiver has room to run.
2. You can’t be someone you aren’t. Relationship development is genuine and requires the receiver to be authentic when connecting with people. Building unique and meaningful relationships with clients takes time, patience and work. Partners should coach their receivers to deliver the same quality of work, but in their own way. Nobody likes a bait and switch.
3. Receivers are almost always competing with the ghost in the room. Passers are typically seasoned veterans of the profession. Many accountants already struggle with their knowledge and skill level. Hint: nobody was born an expert. It’s important for receivers to recognize the value they bring to the table. If your passers have been properly managing, delegating and developing their receivers, this shouldn’t be a long shot.
4. Receivers are often quizzed on their ability to take on new work. Managers fear that these recipients will forgo existing work or deprioritize. They key to success is allowing your receivers to begin the process of delegating to the next generation. For your receivers to grow into their new roles, you will need to let them step up to the plate.

Registration will open soon for our November 14 webinar “The Professionals Role in Client Transitions”. Learn more about client transition and what you should be doing to avoid making mistakes in the succession process.