You Made Partner: Now What?

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ACCTG 390W Fall 2024
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6/9/2015
Treating partners as employees: Risks to consider
Journal of Accountancy
Treating partners as employees: Risks to consider
Continuing to treat an employee of a partnership who has received an equity interest in the partnership as
an employee can create a number of tax problems.
BY NOEL P. BROCK, CPA, J.D.
July 31, 2014
In today’s business environment, where many businesses find they cannot retain key employees
without offering equity interests in the businesses, partnerships often grant employees interests in the
company. Even a very small partnership interest, however, can cause the employee to be treated as a
partner, not an employee, for federal tax purposes, while the partnership often mistakenly continues to
treat the partner as an employee. This article examines problems raised by this incorrect treatment.
This error can have many tax consequences, not the least of which is the mistaken tax treatment of the
partner’s income as wages subject to Federal Insurance Contributions Act (FICA) taxes under Sec.
3101, Federal Unemployment Tax Act (FUTA) taxes under Sec. 3301, and income tax withholding
under Sec. 3402 (called employment taxes in this article), instead of self­employment income subject to
self­employment tax under Sec. 1401 (Self­Employment Contributions Act (SECA)), which is not
subject to wage withholding.
EMPLOYEE VS. PARTNER: DETERMINING EMPLOYEE STATUS
The Code does not define the term “employee.” Generally, under Regs. Sec. 31.3401(c)­1, if a person
has a right to control or direct the individual who performs the services, the individual will be deemed an
employee. Beyond this, the term is defined by applying common law rules. The IRS uses a 20­factor
test based on case law to determine whether an employer­employee relationship exists (Rev. Rul. 87­
41).
CURRENT STATE OF THE LAW: TREATING A PARTNER AS AN EMPLOYEE
Cases interpreting the 1939 Code held a partner could not be an employee of his partnership under any
circumstances, by adopting the aggregate theory of partnership taxation (see, e.g., Robinson, 273 F.2d
503 (3d Cir. 1959)). When Congress enacted the 1954 Code, it provided that a partnership could be an
aggregate of its partners or a separate entity. Where no view of partnership taxation was adopted by a
given Code provision, the view that was “more in keeping with the provision” should prevail. One Code
provision that treats a partnership as a separate entity from its partners that was adopted in the 1954
Code is Sec. 707(a). It provides that, if a partner engages in a transaction with his or her partnership in
other than his or her capacity as a member of the partnership, the transaction will, except as otherwise
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provided in Sec. 707, be treated as a transaction occurring between the partnership and one who is not
a partner. Sec. 707(a) introduced the possibility that, given the right circumstances, a partner may hold
the dual status of partner and employee in a single partnership. Since that time, a number of cases and
rulings have addressed the issue, the most significant of which are discussed below.
Wilson, 376 F.2d 280 (Ct. Cl. 1967). The first court to address whether a partner can be both a partner
and an employee did not consider a payment to a partner for services but, instead, addressed whether a
managing partner could exclude from income under Sec. 119 the value of meals and lodging the
partnership provided. The court held that a partnership is not a separate legal entity from its partners,
and therefore a partnership could not be regarded as the employer of a partner for Sec. 119 purposes—
apparently not viewing the 1954 Code amendment as having altered the conclusion under the pre­1954
Code that a partner cannot be an employee.
Armstrong v. Phinney, 394 F.2d 661 (5th Cir. 1968). In Armstrong, as in Wilson, the Fifth Circuit
considered whether a partner could exclude meals and lodging the partnership provided from income
under Sec. 119. In contrast to Wilson, however, the Armstrong court held that a partner could hold the
dual status of employee and partner in a single partnership because Sec. 707(a) had altered the law.
The court then stated:
[I]t is now possible for a partner to stand in any one of a number of relationships
with its partnership, including those of creditor­debtor, vendor­vendee, and
employee­employer.
Importantly, because Armstrong did not deal with a payment to a partner for services, any part of the
Armstrong court’s holding beyond Sec. 119 is dicta, which has persuasive but not precedential value.
GCM 34001 (Dec. 23, 1968) and GCM 34173 (July 25, 1969). Soon after the Armstrong decision, the
IRS issued two general counsel memoranda (GCMs) examining whether a partner could be both a
partner and an employee in the same partnership. Noting that Armstrong did not involve employment
taxes, the IRS disagreed with the broad holding of the Armstrong court and concluded that, for
employment tax purposes, a partner may not be both a partner and an employee in the same
partnership.
Rev. Rul. 69­184. Soon after issuing the GCMs, the IRS publicly ruled that a partner may be either a
partner in a partnership or an employee of a partnership, but not both, for employment tax purposes.
Pratt, 550 F.2d 1023 (5th Cir. 1977). In Pratt, the Fifth Circuit considered whether management fees
paid to partners for services were payments under Sec. 707(a). In concluding that the management fees
were not Sec. 707(a) payments, the court held that “in order for the partnership to deal with one of its
partners as an ‘outsider’ the transaction dealt with must be something outside the scope of the
partnership.” Thus, the same court that rendered the Armstrong decision reached a different conclusion
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when confronted with an actual payment to a partner for services. The court adopted a test that limited
the application of Sec. 707(a) to situations in which the transaction between the partner and the
partnership is something “outside the scope of the partnership.”
The IRS agreed with the holding in Pratt by issuing Rev. Rul. 81­300. At the same time, the IRS ruled in
Rev. Rul. 81­301 that payments to a partner for services rendered outside the scope of the partnership
most resembled an independent contractor relationship, not an employer­employee relationship.
Riether, 919 F. Supp. 2d 1140 (D.N.M. 2012). In Riether, a district court considered whether partners
in an LLC taxed as a partnership for federal tax purposes could avoid paying self­employment tax on
their entire distributive share of partnership income solely because they “received a Form W­2 from [the
LLC] for the year 2006” and, thus, “were not self­employed.” After noting that the taxpayers tried to treat
themselves as employees for some, but not all, of the LLC’s earnings by paying themselves $51,500 in
purported wages, the court, citing Rev. Rul. 69­184, held that the taxpayers should have treated all of
the LLC’s income as self­employment income, rather than characterizing some of it as wages.
“Because Plaintiffs did not elect the benefits of corporate­style taxation under Treasury Regulation §
301.7701­3(a), they should not have treated themselves as employees,” the court said. The court also
held that members of an LLC are not automatically treated as limited partners (citing Renkemeyer, 136
T.C. 137 (2011)).
Thus, while the enactment of Sec. 707(a) raised the possibility that a partner may be both a partner and
an employee of the same partnership, the IRS has repeatedly opposed this treatment, only dicta in
cases supports this treatment, and the court in Riether held that a partner may not be both a partner and
an employee of the same partnership.
RISKS OF TREATING A PARTNER AS AN EMPLOYEE
Rev. Proc. 2001­43 May Not Apply
Often a partner receives a partnership interest solely in exchange for services. The IRS has concluded
that the receipt of these interests will not be taxed upon receipt if certain conditions are met. In 2001, the
IRS issued Rev. Proc. 2001­43, providing that, so long as certain conditions are satisfied, it will not tax a
service provider’s receipt of an unvested profits interest (i.e., the interest will be treated as being
received as of the date of grant when the value is $0—not at the future vesting date when the value may
be significant). Rev. Proc. 2001­43 requires, among other things, that:
The partnership and the service provider treat the service provider as the owner
of the partnership interest from the date of its grant and the service provider
takes into account the distributive share of partnership income, gain, loss,
deduction, and credit associated with that interest in computing the service
provider’s income tax liability for the entire period during which the service
provider has the interest.
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Because the IRS does not permit a partner to be both a partner and an employee, continuing to treat an
employee who has received an unvested profits interest as an employee for employment tax purposes
by issuing the partner a Form W­2, Wage and Income Statement, etc., presumably runs afoul of the
above requirement. Thus, any partner who is treated as an employee at any time after receipt of an
unvested profits interest may not satisfy the safe harbor set forth in Rev. Proc. 2001­43, and, thus, the
IRS may argue that the issuance of the profits interest ought to be fully taxable upon vesting at the then
fair market value.
Cafeteria Plans May Be Disqualified
Partners are prohibited from participating in cafeteria plans. Including them may disqualify the cafeteria
plan entirely, resulting in the loss of the tax benefits the employer sought by adopting the plan.
FICA Taxes May Be Underpaid
If all of a partner’s income (whether guaranteed payment or allocable share of partnership profits) is
reported to the partner on Schedule K­1 as is required, there is little risk that the partner will fail to report
his or her entire share of partnership income and pay all employment taxes due on the income. If,
however, a partnership decides to treat certain partners as employees for payroll tax purposes, there is
a risk that not all of the partner’s allocable share of partnership income will be reported on Form W­2,
because the partnership tax return will not be completed until months after the Form W­2 must be filed
with the IRS and the partnership will not have final numbers to use when it prepares the Form W­2.
FICA Taxes May Be Overpaid
SECA tax is imposed on “net earnings from self­employment.” Sec. 1402 defines net earnings from self­
employment to include earnings from each partnership in which the partner holds an interest plus
earnings from a variety of other sources (including sole proprietorships). If a partner is treated as an
employee of a partnership and FICA taxes are paid on the partner’s behalf based solely on the earnings
of that partnership, then the partner may overpay employment taxes if the partner’s other self­
employment activities have an overall net loss.
Qualified Production Activities Deduction May Be Miscalculated
Sec. 199, which allows a deduction for qualified production activities, is limited to 50% of the Form W­2
wages paid to employees. Neither self­employment income nor guaranteed payments to partners are
considered wages for these purposes. Partnerships taking the Sec. 199 deduction should be careful to
exclude those amounts reported to partners on Form W­2 from the calculation under Sec. 199(b)(1).
Substantial­Authority and AICPA SSTS No. 1 Requirements May Be Violated
Sec. 6664 generally prohibits taxpayers from taking tax positions and preparers from signing tax returns
unless there is substantial authority or a reasonable basis for the tax treatment of an item and the
taxpayer discloses the tax treatment on the taxpayer’s income tax return (using Form 8275, Disclosure
Statement). The substantial­authority standard is an objective standard that is satisfied if the weight of
the authorities supporting the position is substantial in relation to the weight of contrary authorities. In
practice, the substantial­authority standard is generally interpreted as requiring approximately a 40%
likelihood that the tax return position will be upheld on its merits if it is challenged. AICPA Statement on
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Standards for Tax Services (SSTS) No. 1, Tax Return Positions, generally requires that a return
preparer comply with all applicable reporting and disclosure standards imposed by the governing tax
authorities. These standards include Sec. 6694, which penalizes tax preparers for taking unreasonable
positions on a tax return that lead to an understatement of tax liability.
Because only dicta in cases support, and the Riether case undercuts, allowing a partner to be both a
partner and employee in the same partnership, taxpayers should carefully consider what level of
comfort exists for the position. Moreover, because SSTS No. 1 requires adherence to rules imposed by
governing tax authorities, a violation of Sec. 6694 would violate SSTS No. 1.
State Tax Apportionment Could Be Affected
Employee wages are treated differently from partnership guaranteed payments for state law
apportionment purposes. Therefore, states could disallow any apportionment based on treating partners
as employees.
Benefits Paid for the Partner Are Taxable to the Partner
Whereas employees can exclude from income certain employer­paid benefits, partners may not exclude
those benefits when the partnership pays them. Health, welfare, and fringe benefits paid on behalf of a
partner are generally not excluded from the partner’s income as they are for an employee. These
payments are guaranteed payments under Sec. 707(c) because they are made without regard to the
partnership’s income, and the value of the benefits are therefore included in the partner’s gross income.
A partnership choosing to treat a partner as an employee should be sure to include the amount of
employee benefits paid on the partner’s behalf in the partner’s income.
Bonuses Paid After Year End May Be Taxable to the Partner in the Prior Year
Employees generally pay taxes on wages when the wages are paid. Guaranteed payments, however,
are included in a partner’s income for the year in which the partnership is entitled to a deduction under
its method of accounting. For accrual­basis, calendar­year partnerships, bonuses accrued on Dec. 31
of year 1 that are paid on March 15 of year 2 are deductible by the partnership in year 1. Thus, the
guaranteed payment for bonuses accrued on Dec. 31 of year 1 will be taxable to the partner in that year
even though the cash is not received until year 2.
The Partnership’s FICA Tax Deduction May Be Overstated
Any amount of FICA taxes the partnership paid on behalf of a partner who was treated as an employee
constitutes an additional guaranteed payment to the partner. Partnerships treating one or more partners
as employees should be careful not to deduct the half of FICA taxes paid for the partner and also claim
a guaranteed payment deduction for that same amount.
HOW TO SOLVE THIS PROBLEM
Taxpayers can work around the prohibition on a partner’s being an employee of the partnership in which
the partner holds an interest. Below is an overview of some of the more common techniques for
accomplishing this.
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Tiered Partnerships
Using a tiered­partnership structure can avoid the prohibition on a partner’s being an employee of his or
her own partnership. A partner in an upper­tier partnership may properly be treated as an employee of a
lower­tier partnership so long as the partner of the upper­tier partnership does not hold a partnership
interest in the lower­tier partnership (or vice versa).
Disregarded Entity Beneath a Partnership
The check­the­box regulations provide that an otherwise single­member disregarded entity will be
treated as an entity separate from its owner for purposes of employment taxes and collection of income
(withholding) (Regs. Sec. 301.7701­2(c)(2)(iv)). However, if the owner of the disregarded entity is an
individual, the individual owner will generally be subject to self­employment tax—not wage withholding.
Some taxpayers take the position that if a partnership is the sole owner of a disregarded entity, then the
disregarded entity’s employees can also be issued partnership interests in the upper­tier partnership
while continuing to be treated as employees of the lower­tier disregarded entity that is wholly owned by
the upper­tier partnership in which the partner holds an interest. Presumably, the position is based on
the fact that a partnership—not an individual—owns all the interests in the disregarded entity and, thus,
the example from the regulations is inapposite.
This interpretation is likely a stretch. Simply interposing a partnership (the existence of a partnership)
should not change the tax answer obtained if the partnership were not in existence.
Even if this structure does work to avoid the prohibition on a partner’s being an employee of the
partnership in which the partner holds an interest, the taxpayer should have a nontax business purpose
for the partnership’s existence, which would not be to avoid the prohibition on treating a partner as an
employee of the partnership in which the partner holds an interest.
S Corporation Holding an Interest in a Partnership
Sometimes, a partner will choose to have an S corporation hold the partner’s interest in a partnership as
a means to reduce overall self­employment taxes. Despite the similarities in the tax treatment of S
corporations and partnerships, under current law, the self­employment tax regimes differ significantly for
shareholders of S corporations and partners in partnerships. Generally, as long as an S corporation
pays its shareholders reasonable compensation, any S corporation earnings flowing to the shareholders
above and beyond that reasonable compensation are not subject to self­employment tax. Conversely,
general partners in a partnership generally pay self­employment tax on 100% of their earnings flowing
from the partnership. It is unclear whether interposing an S corporation would be a successful strategy,
however.
For a more­detailed look at the issues discussed in this article, see “Partners as Employees? Properly
Reporting Partner Compensation
(http://www.aicpa.org/Publications/TaxAdviser/2013/November/Pages/Brock_Nov2013.aspx),” by Noel
P. Brock, The Tax Adviser, Nov. 2013, page 766.
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EXECUTIVE SUMMARY
More and more businesses, including partnerships, are awarding equity interests to valued
employees to keep them.
Partnerships often are unaware that even a small equity interest can stop the new partner from
continuing to be treated as an employee for tax purposes.
Failure to treat these partners correctly can have numerous adverse tax effects, such as
overpaying FICA tax, causing benefits paid on the partner’s behalf to be taxable to the partner, and
accelerating the taxation of certain bonus payments.
Other risks include problems with state tax apportionment formulas and miscalculating the Sec.
199 domestic production activity deduction.
Although several planning techniques are available to avoid this problem, none are without
shortcomings.
Noel P. Brock ( noel@noelpbrock.com (mailto:noel@noelpbrock.com) ) is an assistant professor at
West Virginia University in Morgantown, W.Va.
To comment on this article or to suggest an idea for another article, contact Sally P. Schreiber, senior
editor, at sschreiber@aicpa.org (mailto:sschreiber@aicpa.org) or 919­402­4828.
AICPA RESOURCES
The Tax Adviser article
“Partners as Employees? Properly Reporting Partner Compensation
(http://www.aicpa.org/Publications/TaxAdviser/2013/November/Pages/Brock_Nov2013.aspx),” Nov.
2013, page 766
CPE self­study
Taxation Fundamentals of LLCs and Partnerships: Internal Revenue Code Subchapter K (#731726)
For more information or to make a purchase, go to cpa2biz.com (http://cpa2biz.com) or call the Institute
at 888­777­7077.
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are Tax Section members. The Section keeps members up to date on tax legislative and regulatory
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Treating partners as employees: Risks to consider
developments. Visit the Tax Center at aicpa.org/tax (http://aicpa.org/tax). The current issue of The Tax
Adviser is available at thetaxadviser.com (http://thetaxadviser.com).
PFP Member Section and PFS credential
Membership in the Personal Financial Planning (PFP) Section provides access to specialized
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credential. Information about the PFS credential is available at aicpa.org/PFS (http://aicpa.org/PFS).
© 2015 American Institute of CPAs ­ All Rights Reserved
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You made partner: Now what?
Journal of Accountancy
You made partner: Now what?
Becoming a partner requires a new perspective on leadership, goals, and strategy.
By Courtney L. Vien
April 13, 2015
After becoming a partner at EisnerAmper, Elliott Lee, CPA, says he realized that his decisions had a direct effect
on others. Photo by Brian Ach/AP Images.
At first, Elliott Lee didn’t think being a partner was much different from being a senior manager. “The first
three months after I made partner I felt like nothing changed,” he said. “I was still primarily worried about
executing my day­to­day work.”
Then, a director he once reported to came to his office and said, “I’m looking to you for direction on
where the firm is going.”
“I thought, ‘Wow, I really am in charge now,’ ” said Lee, a CPA who has been a partner in the disputes
and investigations group at EisnerAmper in New York City for about a year and a half. “It gave me
pause in terms of how I viewed myself. I realized I had to shift my mindset from simply doing my job to
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creating new business and forming a niche for myself in a saturated market.”
A whole new world
Firms put much time and effort into preparing prospective partners for their new role. Yet, as Lee can
attest, the transition from senior manager to partner requires a significant change in outlook that isn’t
easy to completely digest until an accountant actually becomes a partner. New partners must view
themselves not just as employees, but as business owners. They’re no longer responsible just for
themselves and their subordinates, but for helping set the direction of entire practice areas. They’re
asked to create business, drive strategy, grow as leaders, act as firmwide role models, and become
more involved in their communities. And, after rising through the ranks from a junior role to a senior role
to a management role, they’re now tasked with setting and realizing their own career milestones.
The change in mindset required of new partners is so significant that it sometimes can take them a year
or two to settle in to their new roles. Steve Kangas, CPA, who has been an audit partner with DK
Partners in Austin, Texas, for four years, found he had significantly more responsibilities as a partner
than he did as a senior manager. “I went from meeting the expectations of my bosses to meeting the
expectations of my clients, as I was now running the business aspect of things,” he said. “I spent my
first couple of years coming to terms with my new responsibilities.”
New partners need to learn that they can no longer handle both their new and old responsibilities and be
successful. As driven, ambitious people, they can find it hard to relinquish control over aspects of their
jobs.
But learning to delegate is a necessary skill, said Jodie Hewitson, CPA, who has been a tax partner at
Tanner LLC in Salt Lake City for three years. “We like to think we’re all superhuman and that we can do
everything ourselves,” she said. “But when you’re given new responsibilities on top of your old ones,
you realize you have to hand a lot of your old duties over to others. You realize that certain people are
now better suited to handling aspects of your job than you are because they have different skill sets,
more time, or are ready to take on new challenges themselves.”
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Jodie Hewitson, CPA, says she learned to hand over responsibilities and duties to others once she became a
partner at Tanner LLC. Photo by Douglas Barnes/AP Images.
Aligning goals with firm objectives
To become partner, accountants progress through a strict hierarchy, climbing the ranks from junior
associate to manager to senior manager to director. Once they become partners, though, career
milestones typically aren’t as clearly defined. “You do feel uneasy when you’re no longer moving
through a set structure,” Lee said. “It’s a different world. You determine your own objectives based on
the things that the firm tacitly expects of you.”
Some firms do have formal goal­setting procedures at the partner level. At Tanner, partners report to a
managing partner with whom they have regular accountability meetings. At audit partner Jean Smith’s
firm, Ketel Thorstenson LLP in Rapid City, S.D., partners have yearly evaluations. At these meetings,
Smith, a CPA, said, “We have fun and challenging discussions about our career paths. We set goals for
everything from staffing issues to process improvement, soft skills, technical skills, marketing, and
client development, and we track our progress on them throughout the year.”
New partners soon discover that their role enables them to set goals based on their skills, personalities,
interests, and their firms’ needs. Hewitson, for example, who is her small firm’s only female partner, has
focused on improving the organization’s onboarding process and increasing the visibility of female
associates. Kangas is helping his firm make the transition to a perpetual life firm model (one that will
continue after its founder retires). Other new partners set their sights on attaining new titles such as
practice leader or managing partner, or seek to become the heads of committees at their firms or state
societies.
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Smith became partner at a time when her firm had just acquired another practice, and so focused on
“melding the two cultures.” Now, she’s turned her efforts toward change management. “The way we
operate the firm is changing, technology is changing, and we have different generations of employees
who need different things in their careers,” she said. “I have a lot to offer in terms of helping the firm
grow as the environment changes.”
A partner with Ketel Thorstenson LLP, Jean Smith, CPA, says partners have to build their relationship skills. Photo
by Toby Brusseau/AP Images.
Shifting focus from self to others
Perhaps the biggest mental shift new partners have to undergo is learning to concentrate on the firm’s
growth as much as they do their own. “As a partner, you’re no longer the center of your universe,” Lee
said. “Your actions affect so many other people that your priorities need to shift. It’s no longer about how
you make yourself relevant, but about how you drive business and create strategy.” His decisions, he
said, had a direct impact on morale: “I saw that my attitude and whether I won or lost business did affect
the staff.”
Partners often find they need to focus on others’ professional growth as much as, if not more than, their
own. “As a partner, your role is more about leading and helping others deliver on their expertise than
being the expert yourself,” said EJ Nedder, a partner at McGladrey. “You manage client relationships
while growing and mentoring people.”
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You made partner: Now what?
Hewitson jokes that her new role as partner makes her wish that she’d taken more psychology classes
in college because so much more of her job now involves “coaching and developing people and
attending to their emotional needs.”
“There’s an art to working with employees,” she said. “Some days I take care of employees as much as
I do clients.”
New partners may even find themselves mentoring the next generation of their firm’s leaders. “You have
to think about how you help that next person become partner,” Nedder said.
Soft skills are essential
Accountants need both technical and soft skills to advance to partner. That development doesn’t stop
after making partner. Most young partners have an area of expertise they’re known for, be it technical
knowledge or business or staff development. After being named partner, they tend to concentrate on
becoming more well­rounded by improving their skills in other areas.
“As a young professional, you’re a generalist,” Nedder said. “Then, you become a deep subject matter
expert with the skills needed to do the technical work. As you grow into a leader, you start becoming a
generalist again.” Hewitson sums it up this way: “One of the biggest things you learn is you can’t just be
a technician and be a successful partner.”
New partners also must improve their soft skills. “I have had to build stronger relationship skills,
especially with staff,” Smith said. “It’s different when you’re a partner. People don’t come and talk to you
as much. You have to push yourself to become part of their world.”
Smith has found that she needs to be more proactive with both staff and clients. “The big picture is
changing in accounting,” she said. “It’s not just crunching numbers and dealing with software. You have
to work on improving your relationships with clients.” She’s working on training her staff to adapt to
these changes in the profession as well.
Networking is another skill that is even more vital to new partners, who often work to become more
visible and involved in their communities. Hewitson, for example, has joined a Utah Association of CPAs
task force to help retain and advance women in the profession. Nedder serves on his company’s board,
gives presentations on technical topics, writes articles, and attends networking and industry events.
“You’re the face of the firm,” he said. “You need to be out in the market. The more so, the better.”
What new partners need to know
To help adjust to the changes, newly minted partners should seek guidance from more experienced
colleagues. “When you make partner, you sometimes think that you’re supposed to know everything,
but really you don’t,” Lee said. “You can’t be afraid to go to resources within your firm and ask for help.”
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Hewitson also found it helpful to lean on those around her for support. “Develop your own personal
board of directors that you can share your concerns with,” she said. “They give you additional
confidence and advice to help you adapt to your new role.”
New partners sometimes feel they need to prove themselves by working extremely hard. But the young
partners interviewed for this article counseled against overwork, noting that taking on too much can lead
to burnout. Nedder said that finding balance is a key to success. “Be well­rounded, not just in your
professional but in your personal life,” he said. “Don’t think you’ll be successful just by working harder all
the time. You need down time to regenerate.”
How can new partners know whether they’re successful? “You need to look at both the metrics and the
intangibles,” Nedder said. “The reality is, this is a people business and a service business.
“Measure your success in terms of the growth of the business, in client satisfaction, and in how well
you’re developing your people,” he said.
Courtney L. Vien is an associate editor for the AICPA. To comment on this article or to suggest an idea
for another article, contact her at cvien@aicpa.org (mailto:cvien@aicpa.org) or 919­402­4125.
AICPA Resources
JofA articles
“How to Speed the Path to Partner (/issues/2014/mar/20138639.html),” March 2014, page 28
“The 10 C’s of Great Leaders (/issues/2013/jun/20137520.html),” June 2013, page 33
“How to Drive Partner Accountability and Unity (/issues/2013/feb/20126239.html),” Feb. 2013, page
32
Conference
Emerging Partner Training Forum, June 18–19, Durham, N.C. (#EPF15D), or New York City
(#EPF15NY)
For more information or to register, go to cpa2biz.com (http://www.cpa2biz.com) or call the Institute at
888­777­7077.
Owner Development Section
Membership in the Owner Development Section of the Human Capital Center provides guidance to firm
owners on how to be confident in their leadership skill set to build a stronger and more secure firm
through partner unity, accountability, and mentoring. Visit the Human Capital Center
(http://tinyurl.com/qhmawk7).
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You made partner: Now what?
© 2015 American Institute of CPAs ­ All Rights Reserved
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