RSS feedsWe have always been proud of the fact that our partnership has worked together very well as a team. As managing partner, I am theoretically responsible for the strategic development and management of the business, but with all my co-partners committed to the same ideals, the job has been relatively easy until now.
Two older partners are coming up for retirement. Having devoted himself to the welfare of the firm and its clients for many years, the first one due out of the door has suddenly undergone a total personality change.
Not only is he is doing everything possible to boost his financial settlement regardless of the effect on the practice, but he is also refusing to begin the process of handing over his clients until his demands are met.
His first demand is to ringfence his financial settlement from the firm against any exceptional costs. Thus any major expenditure by the firm must be omitted from the calculations. He knows that we had planned to make an investment in new technology this year as well as undertaking a major marketing campaign both designed to bring in the business that, as well as growing the practice, would help to pay him out over the agreed period.
He also wants a guaranteed profit share based on the figures for last year. Thanks to some very lucrative assignments, last year’s profits were exceptional. With the current state of the economy and no more cash cows on the horizon, we will be lucky to hit 85% of last year’s figure. In addition, he wants a share of the proceeds if the firm sells out within five years of his retirement.
Despite the fact that these demands are contrary to what we had already agreed, he thinks that they are perfectly reasonable.
Of course, we also have a second retiree to consider. If we give concessions to one then we must do the same for both. This leaves five partners to bear a financial burden that was originally calculated for seven and the prospect of handing over a substantial profit share in what could be a poor year.
In the meantime, partner number one is digging his heels in and refusing to start handing over his clients until his financial demands are settled. His £400k portfolio includes two of the firm’s largest clients, both of whom have been with him for many years and are therefore extremely vulnerable. I fear we may lose them, which would cause even more financial grief than paying out for his additional demands.
Sorting out the clients has also highlighted a separate problem that we have somehow managed to overlook. Between them, our two retiring partners have a considerable number of clients who must be picked up by the remaining five partners.
This is a substantial extra workload, particularly when you consider that only three of them are general practitioners. The other two work solely in their own specialist areas.
Some of the work can be delegated to senior staff, but although we have a couple of people with partner potential, they need several more years of experience and many of the clients are used to dealing directly with a partner. It has become painfully obvious that we do not have the capacity at partner level to cope.
As the managing partner I should have seen all this coming and done something about it. This is the view of my colleagues who are understandably disgruntled at the prospect of a foreseeable future with a lot of extra work and a lot less money.
