Every firm has three options today: merge up, sell to PE, or stay independent. The firms in control of these options are the ones building a great business – happy people, healthy margins, strong leadership, and a team ready to play.
In today's rapidly transforming environment, the noise is louder than ever. If you're a firm over $20M, calls, emails, and messages are a daily occurrence. Firms between $10M-$20M are starting to feel the pressure, and for those below $10M, it's coming. There's no hiding any further.
How do you determine what is right for your firm? Do you have a strong business? Understanding the pros and cons of each option requires a deep dive. That's why we developed our strategic approach to remaining fiercely independent. If your firm doesn't check all the boxes or fails to address critical issues, there are more options available today than ever before – and at a premium value.
Are your partners unified in vision and goals? Have you voted to stay independent or had the conversation? If an offer comes through and a senior partner within 3-5 years of retirement catches wind of an incredible opportunity – the implications amongst the partner group could easily create alignment issues amongst the partner group.
Partner alignment is critical for decision-making and strategic direction/execution. Misaligned partners can cause internal conflict and impede progress. Regular meetings, transparent communication, and shared values are essential to ensure everyone is on the same page.
Does your leadership inspire and drive the firm forward? Is there a clear vision in which leadership is empowered to execute? Or constantly fighting with partners to move the firm forward causing deep cultural issues?
Strong leadership is the cornerstone of any successful firm. Leaders must not only possess technical expertise but also the ability to inspire and motivate their teams.
Is there a clear, actionable succession plan in place? The term a “strong bench” isn’t the best solution – as a bench implies people not playing. You need a minor league team ready and willing to play.
Succession planning ensures the longevity and stability of your firm. Without a solid plan, firms risk losing valuable knowledge and continuity when key leaders retire or leave.
This is one of the top reasons many firms are looking at alternative structures or merging up.
Are your compensation structures aligned with long-term success?
Deferred compensation plans need to be fair and motivating. They should align the interests of the firm and its partners, promoting long-term growth and stability.
Regularly review and adjust your deferred compensation plans to ensure they are competitive and reflect the current market conditions. This recalibration helps in retaining top talent and aligning their efforts with the firm's strategic goals.
Whatever option you choose for your firm's growth, focusing on building a great business ensures that great things can happen. When you prioritize happy people, healthy margins, strong leadership, and a cohesive team, you put your firm in control of the conversation and its future.