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The Practice Management Knowledge Community (PMKC) identifies and develops information on the business of architecture for use by the profession to maintain and improve the quality of the professional and business environment.  The PMKC initiates programs, provides content and serves as a resource to other knowledge communities, and acts as experts on AIA Institute programs and policies that pertain to a wide variety of business practices and trends.

    

  • 1.  Looking for examples of Firm Ownership Introduction

    Posted 10-10-2021 08:18 AM

    Our firm has hierarchy levels of partner/stock holders (owner), and Senior Associates and Associate positions as recognition of seniority.

    We are interested in creating an Entry or Junior Partner position for a few as beginnings of ownership transition and are looking for examples, guides or resources from others.

    How does your firm start the "partner" process?

     

    Brad Chilcote, AIA

    Vice President

    WDD Architects

    Little Rock, Arkansas



  • 2.  RE: Looking for examples of Firm Ownership Introduction

    Posted 10-11-2021 05:46 PM

    Our firm has just completed the first wave of transition. I (the founder) just retired after a 10 year process/plan. I was 90% owner at the onset. The 10% owner (10 years younger than myself) and I started a plan to have 3 more partners join over this time.  He will start his share selling next year. We tried to have a rough spacing of 10 years to smooth out the transition. Now that I have retired they asked 2  young superstars to join. We had professional advisors regarding firm valuation and tax implications for the firm, me and future sellers.  We settled on a formula for value.  Each partner is then offered a certain number of shares each year.  The firm's bonus plan supports the buyers ability to buy those shares.  They can elect not to buy more at any time, but we encourage them to buy all available shares so we didn't have a hiccup in the transition.  We did have one hiccup, when we had to dismiss and buy out one partner. But it was carefully thought out and did not adversely affect the 'plan'.

    I saw the firm I started out with go down because of a failure to plan.  They ended up with closing and not reaping the value of all their hard work. I was treated very well as will future retirees from our firm.

     

    Sent from Mail for Windows

     




    Original Message


  • 3.  RE: Looking for examples of Firm Ownership Introduction

    Posted 10-25-2021 12:28 PM
    Edited by Ann Casso Hon. AIA 10-25-2021 12:28 PM

    The AIA Trust has created a webpage filled with ownership transition resources to help firms figure out how to go about the important process of planning and implementing firm succession. This preparation includes not only considering how current firm leaders transition out of firm ownership, but how to attract and cultivate the firm's future leaders into the practice. The AIA Trust will also run an article in your next Digest issue that includes many ideas, with links to specific resources such as a risk report commissioned by the AIA Trust, Selling, Merging, Or Closing Your Practice?



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    Ann Casso Hon. AIA
    Executive Director, AIA Trust
    The American Institute of Architects
    Washington DC
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    Original Message


  • 4.  RE: Looking for examples of Firm Ownership Introduction

    Posted 10-12-2021 09:18 AM
    Some resources that might be helpful: 

    Best Practice: Pathways to Firm Ownership and Leadership

    https://www.aia.org/best-practices/6419988-pathways-to-firm-ownership-and-leadership
    See the linked Advancement Ladder within.

    Ownership Transition: Developing Future Firm Leadership

    https://aiau.aia.org/courses/ownership-transition-developing-future-firm-leadership



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    Kathleen McCormick CAE
    Director, Firm Engagement
    The American Institute of Architects
    Washington DC
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    Original Message


  • 5.  RE: Looking for examples of Firm Ownership Introduction

    Posted 10-12-2021 11:26 AM
    We created a two tier stock structure with voting shares for the partner level and non-voting for Associates and Senior Associates. We pay a nice dividend on all shares and this provides a nice reward for the leadership group. One leadership tier we did adjust was creating a Senior Partner level for the current owners and a new Partner level for what you described as the 'junior' partners. We felt using the 'junior' term was not appropriate.

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    John Southard AIA
    Hollis + Miller Architects
    Kansas City MO
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    Original Message