Accounting firms across the country are preparing in earnest for the retirement of thousands of talented Boomers. Many elements of succession need attention, but client transition is one area that seems to cause a lot of angst and generate a number of questions. Following are the answers to the four most common client transition questions asked of us as client owners near retirement:

When should I start transitioning my clients?

  • Start transitioning now! Great client service professionals, no matter their age, ensure that their clients have multiple contacts and relationships within the firm. This sets the client up for a smoother transition later and allows for teamwork to cover time off, too. Start today and ensure that at least one other team member has a relationship with each of your clients, is learning about their business and/or personal needs, and is available to answer their questions.

How should I approach transition?

  • Make a list of all client relationships and engagements you (the retiree) manage or participate in. Usually, the best way to do this is to download the names from your firm’s billing system into a client transition grid that includes fields like:
    • Client name
    • Key client contact
    • Client contact information
    • Team members working on the client’s account
    • Current (year to date) and prior year revenue collected from the client
    • An assigned priority ranking (A, B, C, or D) of the client
    • A “transition by” date
  • Follow Pareto’s Rule. Sort the list in descending revenue order, with the largest clients (or if you can get the data, client groups) appearing at the top. Pay attention to whether Pareto’s 80/20 rule applies. Does 80% of your client revenue come from 20% of the clients? If so, plan to spend 80% of your energy ensuring the successful transition of the top 20% of your
  • Plan with each successor. Meet individually with your chosen successors to discuss the right communications and service strategy for each client being transitioned to them. Share your knowledge of each client and review the client files and billings together. Encourage each successor to read about their clients online via their websites, social media, and other sources. Ask for each successor’s input as to how they would like to manage the transition.
  • Take along a shadow. Whenever possible, bring your successor into meetings with their future clients. First, your successor will shadow you, listening, learning, and asking questions of you afterward. When your successor feels ready, encourage them to own the success of the client relationship. With each client, your successor should plan and manage the engagement scope, communicate with the client, enroll others to serve the client, and take point in client meetings. As your successor steps into the client ownership role, they should come to you with thoughts, ideas, and plans to get your feedback. As soon as you feel ready, “cut them loose” to manage things while keeping you in the loop.
  • Step back into the shadows. As your successor takes on client ownership, you must become the shadow, which is often the hardest part of the retirement process for great client service providers. When the client contacts you, you must forward the matter to the new client owner to handle, and then follow up with the client owner afterward to check in. If you’re in a meeting with the client and successor, defer all questions to the successor and refrain from taking the floor, dominating, or displaying your indispensable brilliance in front of the client. Instead, if you’re interested in a successful transition, hold your ideas and comments until the debrief afterward with your successor. Allow your protégé to circle back to the client with additional suggestions, ideas, or even corrections from the meeting, if necessary, after you two have connected offline.

For more information on gradually transitioning responsibility, read Four Steps to Faster People Development.

Whom should I transition to?

  • Identify a successor who is the best fit for each client. Don’t fall for the fallacy that one person will take all of your clients. Instead, plan for multiple successors and work to identify the best cultural and technical fit for
  • Before taking any action, contemplate the ripple effect. When you transition clients to the successors, what happens to the successors’ workload? In most firms, those talented enough to take your clients already have a full plate. Where will their excess work go? Develop a client transition grid for each of the successors, too, to help them identify which clients they’ll need to transition, creating capacity to manage their new
  • Consider the big picture. Who else is retiring and when? And where will their clients go? You may think you have a clear answer for your client successors now, but when the next person retires, will you have accidentally loaded up successors who are a better fit for the next retiree’s clients instead? Firm leaders who mistakenly manage transitions serially sometimes find themselves transitioning clients more than once over the span of a few years—a course of action that doesn’t bode well for long-term client
  • Don’t saddle your best and brightest with C and D clients. As you prepare for transition, the priority rating suggested above should highlight the most valuable, important client relationships (A’s), the pretty great clients (B’s), the clients who are “OK” but have some issues (C’s) and the clients who are difficult to serve (D’s) because of culture, risk, payment issues, or their inability to value your services. Client transition is a perfect time to say goodbye to your D clients and, instead of saying “Joe’s retiring and your new service provider will be Sue,” you can tell your D clients, “Joe’s retiring and, as a result, we regret that we are no longer able to serve your account.” In addition, if you have capacity issues in your firm or some of the retiree’s clients don’t fit your ideal target profile, some C clients may warrant a transition out of the practice. For more information about transitioning clients out of your practice, read The Time Has Come for Firms to Cull Clients.

When do I tell my clients?

  • After you tell your team. Before you begin telling clients, be sure that you have an agreed-upon position statement and communicate it internally. If you are two years from retirement, this might be something like, “John has been making plans for his next chapter and has shared that he plans to retire June 1, 20XX. For the foreseeable future, he will continue with his existing client responsibilities. In the coming months, he will begin planning for client succession and will need the support of many of us to ensure a smooth transition over time. As more specific plans are made, we’ll keep you informed.”
  • Contemplate timing. Plan to transition groups of clients over time using your client grid to prioritize who will go first. Busy season is a perfect time to introduce new contacts to your clients, while slower time periods are great for your successors to reach out to their “intended” clients to show their interest and deepen relationships.
  • Don’t try to hide your plan from key clients. Every retiree’s circumstances are different, but as a general rule, when you are within 18 to 24 months of retirement (two service cycles), it is appropriate to begin discussing your plans with your key clients. Some retirees fear a loss of utility or client respect once they advise their clients of their planned transition. In my experience, clients notice when their practitioner is nearing retirement age. They wonder what your plans are and whether they should be making plans of their own. Staying silent encourages clients to “make up” their own story, which might cause them to develop an “on deck position” relationship—outside your firm—to serve them when you retire. Be proactive about your plans and connect your clients with successor contacts they are familiar with and can trust.
  • Consider communications by group. Depending on the makeup of your client base, you may choose to tell your A and B clients live via an in-person meeting or video call, while C and D clients learn via a letter or email communication. Ensure that when your firm makes the public announcement of your retirement, which should come well in advance of your last day, it’s not a surprise to any of your

Transition your clients gradually. Carefully select, mentor, and empower your successors. Communicate honestly and with transparency. When you retire with intention, your clients will be far more likely to stay with your firm, leaving a wonderful legacy and assuring your firm’s success well into the future.

Originally published on September 15, 2014, in the AICPA’s CPA Insider and updated as of this blog post.