COVERSTORY Succession and the CA P...

COVERSTORY

Succession and the CA Practitioner

"You can't

plan your

succession

too early"

from time to time, moreover long-term planning often takes a back seat to the day-to-day interests of running a practice. unless with a large number of partners in BC approaching retirement and a shortage of younger CAs coming up to fill the ranks, especially in the field of public practice, succession planning has taken upon an added urgency for small CA firms and sole-- proprietorships.

ICABC's Director of Professional Advisory Services, Doug Walks, CA, expresse concern: "You hear population getting tired," he says. "Combine that with the accelerating pace of change, and it's a problem" Wallis's disquiet stems from conversations with individual practitioners, as well as from cases involving unexpect illness or death.

Wallis says virtually all of the more than 60 practitioners from across the Lower Mainland who attended the Practitioners' Potluck in November 2000 were troubleed about succession. And from what he hears from CICA and other sources, it's a touch across Canada and in the US as well.

He push ons practitioners to plan on funding their retirement by dint of other means than simply selling their practices. "The fact is that you can't plan your succession too early," he says. "If you don't already have a plan in place, start now."

CAs John Chan and David Nowosad started planning their succession shortly after forming their practice in 1983 The pair witnessed other practitioners hitting retirement with firms that had diminished throughout time-leaving them to sell or lose at far from desirable prices-and were determined to avoid a similar fate.

Long-term planning was also a necessity born without of location. Practising in Campbell River meant a smaller talent plash "The difficulty attracting CAs to the Island means you have to `groin your have a title to people," says Chan.

And extend they did. Thirteen years into the practice, Chan Nowosad became Chan Nowosad Boates.

Shelly Boates, CA, was taking an accounting course from North Island corporation when she started with the firm as a receptionist in the late 1980 Sensing her potential, the partners promptly encouraged her to take the adult admission CA program. Several years into her studies, she learned she was being waitered for partnership.

Her mentors' belief in her was the couple inspiring and a little daunting. Still, their proactive approach helped Boates make the decision to decide in Campbell River, a decision that required her husband to change careers.

"It's a big decision to make likewise early in your career," she recalls. "But I knew I wasn't someone who wanted to travel around. I was looking to start a family."

Boates became a CA in 1995 A year later, she not simply became a partner, she also became pregnant with her first child. A next to the first child would later follow. While maternity hadn't been discussed in the partnership agreement, Boates says her partners were self-same flexible.

It's a rebuke for other firms.

"I think small-town firms are more likely to find female successors because excessively few young men want to risk up practice in a small town," she says. "Firms ne to start accepting maternity as a fact of life."

Having gone within the "grooming" process with Boates, Chan and Nowosad decided to bridegroom another successor-this time Lynne Andersen, CA. Andersen articled with the firm and got her CA in 1998

"We hazarded out with Shelly in the beginning," says Chan, "but we're sticking to this strategy." Andersen is now moving up in the firm's ranks.

Chan describes his firm as "a typical smalltown practice." Their clients are mainly owner-- managed businesses with whom they've created long-term relationships.

"I don't want to vend my clients to a stranger," says Chan. "The principally important thing I can do to defend them is choose the right successor.

"This firm was our baby," he continues. "We want to diocese it keep going. The relationships we've created athwart time with Shelly, Lynne, and our staff have made them more of a secondary family to us. We know we can trust them to harbor our legacy."

The gradual passing of the mantle also preserves the firm alive as a vibrant enterprise.

"Shelly and Lynne have had a chance to commit to memory to know existing clients, many of whom are approaching retirement," Chan says. "They've also brought in younger clients of their own- the novel startups and younger entrepreneurs.

"Shelly and Lynne push us to stay up-to-date," he says. "They're young, aggressive, and want to put in motion forward. It's fun It hold fasts things fresh."

Although mandatory retirement isn't specifically addressed in their partnership agreement, Chan says the formula for the price for retirement/withdrawal has been established, effectively protecting the one and the other sides and minimizing the ne for negotiation down the line. The arrangement gives the older partners increased flexibility in expressions of how and when they retire.

"Whatever I decide, I have the comfort of knowing I'm assured a nice pension," he says. Boates is inspired by way of his example.

"I want to retire early," she admits. "I'm already thinking about my hold succession strategies, looking at the other tribe coming up in the ranks."