For accounting firm McCrory & McDowell, the traditional partner track wasn’t going to work.
To hold on to professional talent, founding partners Ken McCrory and Mike McDowell concluded, they had to provide an incentive that would give employees a stake in the firm and allow them to begin reaping rewards faster than the 10 or 15 years it might take an accountant to reach partner status.
“Because we had ownership tied to becoming a partner, the maze was too big and these people gave up before they found the cheese,” says McDowell.
About five years ago, they decided the most effective incentive would be to extend ownership in the firm to employees other than partners by offering those at the manager level an opportunity to buy into the firm. Dana Unrath, who has held an ownership stake in the firm for four years, says it changed her perspective and how she views her own responsibilities.
“It starts the process of thinking like an owner,” says Unrath. Now, 13 people at McCrory & McDowell hold an ownership stake, and while they haven’t done so yet, McCrory says the ownership concept could work if extended beyond the professionals.
“Why can’t one of the secretaries own part of the firm, in theory, because surely the secretaries at Microsoft own part of their company,” says McCrory.
McCrory & McDowell faced another challenge. With the firm launching businesses like Computer Resources, a computer networking and e-commerce solutions company, and Financial Advisors Inc., a financial planning and investment management company, it meant employing nonaccountant professionals who were accustomed to incentives like stock options, not the traditional partner track. And accounting talent as well was being wooed by technology companies offering handsome financial incentives.
The notion of extending ownership past the traditional levels may be becoming more attractive among accounting firms. Alpern Rosenthal & Co. last year promoted its director of marketing, Elisabeth Leach, to principal status. Leach has been with Alpern Rosenthal for four-and-a-half years, and says that only a handful of accounting firms nationwide have offered similar status to nonaccounting professionals.
At the time of her promotion, Leach was the first marketing professional to be promoted to a similar level at an accounting firm in Pennsylvania, according to Alpern Rosenthal.
“They’ve given me a great career track,” says Leach, who holds a degree in communications.
Leach’s promotion reflects the significance that Alpern Rosenthal places on the marketing function within the firm and how critical it is to continue it.
“Elisabeth’s promotion comes at a time when more accounting firms are beginning to recognize the vital role that marketing and business development play in the success and growth of accounting firms,” says Alex Paul, president of Alpern Rosenthal.
McDowell says offering the opportunity for ownership helps retain talent and dims the allure that working for another firm, especially a big name concern that can offer attractive compensation packages, might present.
Says McDowell: “When (PricewaterhouseCoopers) calls you up and wants you to work for them, we want you to understand that you’re an owner in this firm. Are you going to get that there?” How to reach: Alpern Rosenthal, www.alpern.com