Compensation Model Revamped
Discover how Carl George Advisory transformed a firm’s outdated partner compensation model into a performance-driven structure. By aligning rewards with contributions, fostering transparency, and incentivizing growth, the firm achieved improved partner satisfaction, increased collaboration, and measurable business results.
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Modernizing a Compensation Model
Recently, I worked with a firm that wanted to refine its partner compensation plan. Their existing plan was entirely formula-driven, focusing solely on metrics like production, billable hours, and realization rates.
While these are important factors, they’re not the whole picture in today’s compensation systems. The managing partner reached out to me, frustrated that their current approach wasn’t giving enough credit to other critical contributions, such as leadership, people development, and client service.
This created a fairness issue, as some partners felt their broader contributions to the firm weren’t being recognized.
While these are important factors, they’re not the whole picture in today’s compensation systems. The managing partner reached out to me, frustrated that their current approach wasn’t giving enough credit to other critical contributions, such as leadership, people development, and client service.
This created a fairness issue, as some partners felt their broader contributions to the firm weren’t being recognized.
Actions Taken
The firm’s leadership recognized that production metrics alone weren’t capturing the full value
partners brought to the table. They wanted a more holistic approach—one that balanced
measurable outcomes with subjective factors like people development, business development, and leadership contributions.
I helped them design and implement a new partner accountability and compensation system that addressed these gaps.
First, I worked with the team to create a framework for setting clear goals at the beginning of the year. These goals included both objective metrics, such as production and realization, and subjective factors, like leadership in developing team members or advancing firm initiatives.
This framework ensured that every partner’s contribution could be evaluated comprehensively.
Next, I introduced an evaluation process that took place not only at the end of the year but also during the year. This allowed the firm to provide ongoing feedback and to adjust course as needed. By combining annual reviews with mid-year check-ins, we created a system that promoted accountability and encouraged continuous improvement.
Finally, we redesigned the profit allocation process to reflect this broader scope. Rather than tying firm profits strictly to production metrics, we incorporated the evaluation of both objective and subjective goals. This approach gave appropriate weight to business development, client service, people development, and leadership contributions, all critical areas that drive a firm’s long-term success.
The result was a more equitable and motivating compensation plan. Partners now feel recognized for their full range of their contributions, which fostered greater engagement and alignment with the firm’s strategic goals. By measuring overall value—not just production—we created a system that truly rewarded the diverse ways partners helped build and strengthen the firm.
I helped them design and implement a new partner accountability and compensation system that addressed these gaps.
First, I worked with the team to create a framework for setting clear goals at the beginning of the year. These goals included both objective metrics, such as production and realization, and subjective factors, like leadership in developing team members or advancing firm initiatives.
This framework ensured that every partner’s contribution could be evaluated comprehensively.
Next, I introduced an evaluation process that took place not only at the end of the year but also during the year. This allowed the firm to provide ongoing feedback and to adjust course as needed. By combining annual reviews with mid-year check-ins, we created a system that promoted accountability and encouraged continuous improvement.
Finally, we redesigned the profit allocation process to reflect this broader scope. Rather than tying firm profits strictly to production metrics, we incorporated the evaluation of both objective and subjective goals. This approach gave appropriate weight to business development, client service, people development, and leadership contributions, all critical areas that drive a firm’s long-term success.
The result was a more equitable and motivating compensation plan. Partners now feel recognized for their full range of their contributions, which fostered greater engagement and alignment with the firm’s strategic goals. By measuring overall value—not just production—we created a system that truly rewarded the diverse ways partners helped build and strengthen the firm.
Testimonials
I have been working with Carl George for a few years now as my personal coach. As a new managing partner, I was looking for someone who knew what it was like to manage and motivate people. He has incredible experience as a managing partner himself and has already dealt with the same issues I am working through, from partner compensation to evaluating merger candidates to aligning everyone’s goals for a common purpose. He has been an invaluable part of our team and success because he truly cares and wants to see you be successful.
Our firm first engaged Carl George Advisory in 2016 to assist with our vision and strategic plan process. To date, the outcomes remain as core tenets of the firm. CGA has taken the time to understand who we are and what our goals are which has allowed CGA to aid us in updating our compensation structure, facilitating our annual shareholder meeting, leading our shareholder evaluation process, providing us with industry updates, and supporting our next generation of leaders. Over the course of the last five years CGA has become a close strategic partner to the firm, and its owners.
Carl brings just the right balance of experience, empathy, understanding and counsel to 1) help firms identify where they want to go and 2) walk with them on the path to get there. His knowledge of and insight into the profession is rare and is based on decades of experience in leadership and management of an accounting firm. His experiences have taught him approaches that work – and more importantly those that don’t – so firms he advises can accelerate their journey towards success while avoiding the many landmines along the way.
Clifton Gunderson did over 50 mergers during Carl’s tenure in management of the firm. Carl’s caring and approachable nature and ability to read between the lines and quickly grasp a firm’s important concerns were key reasons so many of our discussions resulted in successful transactions. He has the processes perfected in managing the complicated issues involved in bringing organizations together.
