When a partner of an Accounting firm sells their shareholding to a typical Aggregator they are now an employee. The money they received is typically used to pay off the family home and now they are on a salary and maybe a bonus. I have found that for the majority who do this the excitement of paying off the house and the new environment lasts about 12 months. After years of being a partner, shareholder and decision maker all of a sudden reality kicks in. Under the new arrangement their earnings are typically cut in half or more and they have no operational control. This is when many lose the will to do better and serve their clients properly. They literally don’t care anymore. Many don’t last much longer than 3 years
This has been an inherit problem amongst aggregators of Accounting firms around the world. The new aggegators are doing it differently. They are not buying all the firm for starters – anything from 10% – 49% so the Partners still have ‘some skin in the game’. Some are giving complete operational control to the current firm and all are offering healthy bonus systems (cash and share options) to incentivise the Partners and senior team members. This the major difference as to why they will be successful. Having said that selling to an aggregator does mean it will be a different operating environment. There will be more governance issues placed on you, more reporting and you will be using new systems – good and bad.
One final thing I see is that if the selling Partner has “Entrepreneurial tendancies” then they will not last long term as an employee of the new business.