RETHINKING SUCCESSION
WHY PLANNING EARLY MATTERS AND SELLING TO TRADITIONAL PRIVATE EQUITY IS NOT THE ONLY PATH BY DJ DORFF
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uccession is one of the most consequential strategic decisions an accounting firm owner will face. Yet in many firms, it exists only as a loosely defined idea rather than a clear and motivating path forward. Most firms have an informal sense of how leadership might transition “someday” but have not had to pressure-test those ideas against financial realities and complicated people dynamics. In practice, succession is not a single event. It’s a multiyear process that affects firm value, client continuity, staff retention, and an owner’s personal financial security. Treating it as a distant milestone rather than a present-day strategy often limits options when they’re needed most. The firms that navigate succession most effectively tend to start earlier than feels necessary and evaluate their choices more broadly than tradition alone would suggest.
WHY SUCCESSION PLANNING CAN'T WAIT
Many owners associate succession planning with retirement. That framing alone can delay action. In reality, the purpose of succession planning is broader: It protects the firm, its people, and its clients under a wide range of circumstances. Leadership transitions are often accelerated by factors outside an owner’s control. Health issues, family considerations, disability, or even sudden loss can force decisions to be made quickly. In those moments, firms without a defined plan are forced into reactive decisions rather than intentional ones.
Even absent unforeseen events, there are practical reasons why succession deserves attention well before an exit, including: • • • •
These are not signs of poor management. They are signs of a firm that has reached a stage where long-term continuity requires deliberate design.
INTERNAL SUCCESSION: STRENGTHS AND LIMITATIONS
For many owners, internal succession feels like the most natural solution. Transferring ownership to junior partners or next-generation leaders can preserve culture, protect client relationships, and maintain institutional knowledge. When it works, it can work quite well. Where these plans often struggle, however, is less about commitment to the idea and more about structure and execution. Common issues and limitations include: •
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Client relationships concentrated in one or two partners Decision-making centralized at the top Challenges recruiting, developing, or retaining future leaders Unclear or unaffordable ownership pathways for the next generation of leaders
THE JOURNAL ENTRY |
Capital requirements: Internal buyers often lack the financial resources needed to fund a buyout without placing significant strain on the firm. Risk tolerance: The next generation is often less
WINTER 2026