1. © U PSTREAM A CADEMY 20121 W ORLD C LASS T RAINING: G ETTING Y OUR F IRM O N T RACK P RESENTED BY S AM M. A LLRED, F OUNDER & D IRECTOR O F U PSTREAM A CADEMY W HAT A LL N EW P ARTNERS N EED T O K NOW A ND U NDERSTAND P RESENTED BY T IM B ARTZ, CPA D IRECTOR OF U PSTREAM A CADEMY

2. © U PSTREAM A CADEMY 20122 1.Observations Regarding New Partners 2.What All New Partners Need to Know and Understand 3.ELA Participants Answer Key Questions 4.Question and Answer Session P RESENTATION R OADMAP

3. © U PSTREAM A CADEMY 20123  O BSERVATIONS R EGARDING N EW P ARTNERS

4. © U PSTREAM A CADEMY 20124 More partners will retire from our profession in the next decade than have retired in the past three decades combined. This means our profession will likely see more new partners in the next ten years than in the past thirty years combined. O BSERVATION #1

5. © U PSTREAM A CADEMY 20125 New partners have a lot riding on their shoulders. One of their most significant responsibilities will be to successfully retire their senior partners. O BSERVATION #2

6. © U PSTREAM A CADEMY 20126 The profession is changing at an ever- increasing pace. New partners will need to be prepared to help the firm of tomorrow adapt to and capitalize on these constant changes. O BSERVATION #3

7. © U PSTREAM A CADEMY 20127 Many firms do a poor job of properly training new partners. There seems to be a shared belief that new partners already know what it’s all about. O BSERVATION #4

8. © U PSTREAM A CADEMY 20128 Partners are frequently the biggest barriers to the firm’s progress. In the weighty matters of change, commitment and accountability, partners seem to be among the worst offenders. O BSERVATION #5

9. © U PSTREAM A CADEMY 20129 It has long been said that “culture is the glue that holds the firm together.” You will not find a more powerful method to teach firm values and culture than the example of partner behavior. It’s impossible to create a culture inconsistent with partner behavior. O BSERVATION #6

10. © U PSTREAM A CADEMY 201210 The firm’s “chance for success” approach on endeavors often leaves new partners far short of the success they anticipated. We sometimes set new partners up for failure because we don’t understand the difference between support and commitment. O BSERVATION #7

11. © U PSTREAM A CADEMY 201211 While commitment can’t always guarantee success, support usually guarantees failure. This applies to new services, new offices, positions of leadership, strategic relationships, administrative assignments, etc.

12. © U PSTREAM A CADEMY 201212 Many firms fail to create a culture that values constructive feedback. “The trouble with most of us is that we would rather be ruined by praise than saved by criticism.” Norman Vincent Peale O BSERVATION #8

13. © U PSTREAM A CADEMY 201213 In many firms, partner performance appraisals are accomplished in a mediocre way. The focus seems to be more on compensation than on helping partners advance in their careers. O BSERVATION #9

14. © U PSTREAM A CADEMY 201214 Virtually every firm in our profession has issues with under-performing partners. At conferences and workshops, we hear more complaints about partners than about anything else. O BSERVATION #10

15. © U PSTREAM A CADEMY 201215 Many complaints about underperforming partners stem from poor communication. Clear expectations need to be established. We can only determine if an individual is performing when there are defined performance standards and specific personal goals. O BSERVATION #11

16. © U PSTREAM A CADEMY 2012  W HAT A LL N EW P ARTNERS N EED T O K NOW A ND U NDERSTAND 16

17. © U PSTREAM A CADEMY 2012 Partner Role Partners are at a point in their careers where they need exceptional focus on their strengths and talents to bring value to the firm’s clients and the leadership of the firm. 17

18. © U PSTREAM A CADEMY 2012 Partner Role Partners should have a clear understanding of their role in the firm, and how firm leadership sees them as making the greatest contribution. personal expertise client service leadership positions mentoring relationships 18

19. © U PSTREAM A CADEMY 2012 Partner Evaluations Understand how the partner evaluation process works, how partner goals are established and the impact evaluation results and successful goal setting will have on your current income and career path. 19

20. © U PSTREAM A CADEMY 2012 Firm Financials Obtain a clear understanding of the firm’s balance sheet, including the specific assets (normally the non-trade receivables and the valuation of the intangibles), debt structure of the firm (noting your obligation for guarantees), and capital structure. 20

21. © U PSTREAM A CADEMY 2012 Firm Financials Take time to meet with the managing partner or CFO to obtain a clear understanding of the profit metrics of the firm. Learn the history of the firm’s profitability and where the firm is uniquely profitable or unprofitable. 21

22. © U PSTREAM A CADEMY 2012 Firm Financials Finally, learn how the firm is valued using the numbers from the firm’s balance sheet and income statement. 22

23. © U PSTREAM A CADEMY 2012 Contribution to Firm Profits Make it your goal to be a low maintenance, high yield member of the ownership group. Never forget your responsibility to contribute to firm profits every year. This comes through commitment to firm and department efforts, personal production, effective engagements, and business development. 23

24. © U PSTREAM A CADEMY 2012 Firm Governance Read the firm’s governance documents carefully and note how the firm is structured and how decisions are made. Understand partner rights and position descriptions, noting responsibility and authority for each key leadership position. The firm is your business; be an active and knowledgeable part of it. Ask questions early and often. 24

25. © U PSTREAM A CADEMY 2012 Compensation Be sure you understand the firm’s compensation system for partners. What are the critical factors within the system? How do new partners meld into the system and grow their share of the pie? 25

26. © U PSTREAM A CADEMY 2012 Partner Buy-Outs Ensure you understand the mechanics of partner buy-outs even though you won’t be selling any time soon. You should have a clear understanding of the process because you will be retiring a number of partners over your career. 26

27. © U PSTREAM A CADEMY 2012 Partner Buy-Outs Understand: how partners are supposed to transition their clients how equity is redistributed as partners leave the firm the financial obligations associated with each buy-out in the form of capital and deferred compensation 27

28. © U PSTREAM A CADEMY 2012 Personal Effectiveness It’s vitally important that you work diligently at becoming more valuable each year, both to the firm and to clients. You should consistently work to become an expert in one or more areas. 28

29. © U PSTREAM A CADEMY 2012 Partner Relations Make every effort to personally know every one of your partners and commit to “have their back” in every situation. Learn what they are pursuing professionally and how they like to spend their free time. Know their spouse and children by name. You should never say a disparaging thing about another fellow partner or his/her family. 29

30. © U PSTREAM A CADEMY 2012 Understand Your Impact Your image will change as a part of the firm’s ownership group. Be humble and realize that others evaluate the firm by what they see in you. Be very careful about speaking negatively about others. As a partner, your opinions carry great weight and have long-lasting impact on the careers of others. 30

31. © U PSTREAM A CADEMY 2012 Speak Up You will never be seen as a leader if you choose to remain silent in meetings. Develop the courage to speak up in partner meetings. Don’t allow or encourage others to be your spokesperson on issues you feel strongly about. 31

32. © U PSTREAM A CADEMY 2012 Career Killers Beware of AGC –Arrogance, Greed, and Complacency. These three things will significantly hamper your relationships with your partners and other members of the firm and will limit the effectiveness of your career. 32

33. © U PSTREAM A CADEMY 201233  ELA P ARTICIPANTS A NSWER K EY Q UESTIONS

34. © U PSTREAM A CADEMY 201234 We have asked a number of Year 3 ELA participants to respond to several questions regarding this Leadership Training Forum. Please know that response to these questions is not limited to those participants who have been contacted in advance.

35. © U PSTREAM A CADEMY 201235 Describe what you liked most about your orientation into the ranks of firm leadership? What did your firm do exceptionally well in this regard? Q UESTION #1

36. © U PSTREAM A CADEMY 201236 Describe how your life (professional and personal) changed once you became a member of your firm’s leadership group. Q UESTION #2

37. © U PSTREAM A CADEMY 201237 Describe how you plan to go about developing deeper relationships with your firm’s partners now that you’ve become part of the leadership group. Q UESTION #3

38. © U PSTREAM A CADEMY 201238 Describe how you plan to guide your career now that you are part of the firm’s leadership group. Q UESTION #4

39. © U PSTREAM A CADEMY 201239  Q UESTION A ND A NSWER S ESSION

40. © U PSTREAM A CADEMY 201240 Thank You! timb@upstreamacademy.com