Why you need to plan to protect your firm when a key fee earner leaves (and 5 steps to do it)

I love the saying "hope for the best but prepare for the worst" because it merges two very important qualities: optimism and realism. It's no good being overly optimistic and believing that everything will always be dandy, especially in business, because that could lead to potentially irreparable damage if something goes wrong. On the other hand, however, being overly pessimistic and afraid to take risks can hinder growth. The result? The best way to protect your firm is to always "hope for the best, but prepare for the worst."

In this article, we address the importance of planning for when a key fee earner leaves. If you don't plan for when this happens, they could leave and potentially take clients with them. To minimise the risks and damage from such a situation, here are 5 essential steps to take to protect your firm.

Protect your firm like a mama bear protects her cubs

a mama bear and her cub to symbolise you when you protect your firmA mama bear doesn't stop being cautious just because it's quiet or they've caught and eaten their meal for the day. She is always looking out for potential risks and threats because she knows that prevention is the best form of protection. While we know that accountants aren't bears, this is an apt metaphor for how you feel about your firm. It's yours, it's your baby and you've built it and nurtured it from the ground up.

Just like a mama bear would with her cub, you need to prevent and minimise potential threats to your firm and that includes preparing for when a key fee earner leaves. It's no good assuming it'll never happen to you because, in reality, it most likely will. Trust me, no matter how well you run your firm or how happy or close your team is, this is a rite of passage that every small accountancy firm owner must go through.

It's not pessimistic to think this way, this is being realistic or a real-optimist. For example, if you believe that this will never happen and then it does, a key fee earner leaving could cause havoc to your business. If you plan accordingly for such a scenario, if it then does happen, you can manage this exit easily and with as little damage as possible.

As Annabel Kaye of Irenicon told our Accountants' Growth Club members at a recent members' morning, it's actually unrealistic to think that a fee earner will stay with your firm forever. So what you actually need to do is have everything in place to:

  • Help them stay and be fulfilled so you can get the best out of them when they are employed by you
  • Make sure that your clients know a TEAM is looking after them, not just one person (even if this person is their main contact)
  • Be able to limit their access to the systems if you need to do so

**Key point to remember: the more you can put in place now, the easier it will be to handle if the worst does happen to your firm.**

Review and update employment contracts and employee handbooks

a pair of glasses on a stack of documentsAs part of your preparation to protect your firm when a fee key earner leaves, you first need to review your employment contracts and employee handbooks.

Many small accountancy firms adopt the 'reuse and duplicate' method when it comes to crucial contracts which is risky! This assumes that what you are copying is right for how you and your firm works and that this is appropriate for the current reality. For example, most employee contracts were written pre-covid-19. These were fit for purpose when employees were working from the office 5 days a week, but they are now no longer fit for purpose and need to be updated.

To protect your firm in the event that a key fee earner leaves, you need to review your employment contracts or employee handbooks. They should include:

  1. Employee expectations when working from home. To make sure they are up to date with the new post-covid reality.
  2. Restrictive covenants on what your former employee can or cannot do for 6 months after they leave. These need to be watertight but fair (e.g. they cannot approach current clients or prospects or entice a current employee to join them).
  3. Your employee's responsibilities on leaving. List the activities that the employee needs to complete before they leave (e.g. transferring and deleting any company data from their personal devices, handing over clients, returning company property at their expense etc).
  4.  How your employee will handle their social media accounts. You need clauses to outline their expected online behaviour (e.g. they must show they have left your company on their last day as an employee, they must not approach clients etc).

Make sure you can immediately block access to your firm's I.T. systems if needed

tape blocking access to represent how to protect your firmMany employers don't like putting measures in place that protect them against their employees. This is a normal reaction, but these are also necessary measures. Staff sabotage is a common occurrence, especially if employees feel dissatisfied or aggrieved, so it's smart to have this fail-safe.

For security and also convenience, employers need to be able to switch off an employee's access to their firm's systems. They need to be able to do this without the employee knowing and they also need to be able to access their emails. It sounds severe but this is your right. In the event that you need to exercise this right - for example, pending the outcome of an investigation into an employee - you won't want them to have access to sensitive data and you'll need to check their emails for any wrongdoing.

If your employees work remotely, you will most likely need a cloud-based solution to block users from key software and data. To ensure that your workflow is also not affected, remember to check the emails of the fee earner or employee who's leaving. You will need to manage the handover of client relationships and any outstanding tasks efficiently.

Monitor employee performance using 'light-touch' methods

a mother bear walking with her two cubs

We are strong believers that trust needs to go both ways between an employer and an employee. Even with the move to remote working. Monitoring performance doesn't have to be strict with computer programmes to record every keystroke that employees make. To build trust and loyalty (and by default, performance), it is best to implement light-touch monitoring of progress.

Surprisingly, when a key fee earner leaves your firm, most of the damage is actually done in the weeks and months BEFORE the employee actually resigns. It's true. When an employee resigns, you know what needs to be done to manage the responsibilities that they used to do. When an employee is dissatisfied or is disengaging, however, they could be causing your firm serious damage without you even knowing it. For example, not responding promptly to clients' queries. Or not doing your firms' work whilst working from home but building up their own base of private clients. (And, you will be surprised how often this does happen.)

This is where light-touch monitoring is essential. If you're regularly checking in with your employees, you know if their progress is on track and you'll be able to spot any red flags sooner rather than later. In short, this regime will save you a lot of money and heartache should a key fee earner choose to up and leave your firm.

Make sure to use a mixture of light-touch monitoring methods, such as:

  • Insisting that every employee keeps their electronic calendar up-to-date. Make sure that they are all visible to every team member too.
  • Setting KPI targets every 3 months, which are driven by your firm's ONE BIG FOCUS, for each employee. When you've set targets, sit down with each employee every month to talk about how they are doing with these KPIs.
  • Having weekly 1:2:1s with them to check-in. These can be as short as 10  minutes and can adapt to what the situation calls for. For example, they may be hitting targets but they are getting overwhelmed. If they are working long hours or they have too many emails or outstanding tasks, you may need to adjust targets or help them work more efficiently.
  • Reading ‘performance reports.’ These will tell you how long an employee is spending on doing a key component of their role (e.g. completing a tax return or set of accounts). Check these regularly as they are often the first indicator that an employee is disengaging.
  • Coaching your employees through mistakes. If any employee makes a mistake or something didn't go as planned, help them discover the root cause of the issue.
  • Ensuring employees attend their team meetings and speak in the meetings. If you're having virtual meetings, insist that everyone's cameras are turned on and encourage engagement from everyone.
  • Occasionally attending a meeting with your employee and their client. You have every right to do this and it's a good way to keep employee performance consistent.

Essential resources: 

Never ignore non-compliance or mistakes

a red flag you can't ignore if you want to protect your firmWe can all sense when something is wrong, so don't ignore it. If you want to protect your firm, you'll need to listen to your gut.

When an employee starts to disengage, the number of mistakes that they make will start to creep up. Maybe they are neglecting to keep your Practice Management System up-to-date or they are missing the last step in the work process (e.g. updating their timesheet). Perhaps they are cherry-picking what parts of the role they want to do and they are failing to do the most important part of their job (e.g. promptly responding to clients' emails).

Whatever it is, these little things are the first indicator that something is amiss, so don't ignore them. We speak from personal experience when we say that it is easy to be in denial about this and believe that everything is fine with your team.  Long story short, don't ignore these red flags. They are red flags for a reason so address them ASAP.

Essential resources:

Hope for the best, but plan for the worst

Bringing it full circle...to protect your firm (from things like a fee earner leaving), you need to hope for the best but prepare for the worst. The more you can put in place now, the easier it will be to handle if the worst does happen to your firm! Start by putting these 5 steps in place and you'll soon see that things will run smoothly (even in the event that a major fee earner leaves your firm).


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