The Succession Paradox: Why Accounting and Professional Services Firms Are Investing More But Preparing Less
Here's a troubling statistic: Our research has shown that 67% of accounting and professional services firm leaders give succession planning "high" or "top priority" attention. Yet their readiness scores have declined over the past six years.
How is this possible? More attention, less readiness?
We recently compared succession data from 2019 and 2025, surveying 30 firm leaders. What we found reveals why traditional approaches are failing and what's actually required to succeed.
The Talent Crisis No One Expected
In 2019, 25% of firms cited talent pipeline as their biggest succession risk. In 2025, that jumped to 44%, nearly double any other concern.
This isn't a "talent shortage" problem. It's a talent development problem.
The industry standard is 7-10 years from identification to partner-ready. Firms looking for "qualified candidates" today needed to start building them in 2015-2018. They didn't, and now they're scrambling.
Meanwhile, 61% still lack complete succession plans, and only 50% of next-gen leaders feel adequately trained. The pipeline isn't just thin, it's breaking.
The Skills Revolution You Might Have Missed
What firms look for in leadership has completely inverted in six years:
2019: Technical excellence (40% priority), People leadership (45%)
2025: Technical excellence (17% priority), People leadership (78%)
That's a 23-point decline in one and a 33-point increase in the other.
Add to this: Advisory mindset jumped from 52% to 67% priority. AI/digital fluency emerged as a top-4 skill from non-existence. Hours billed, firm tenure, and technical mastery are all declining in relevance.
Yet most training budgets still allocate 70% to technical, 10% to leadership.
Firms are training 2019 leaders for 2025 challenges.
The Client Relationship Tightrope
Client expectations have exploded:
63% now demand speed (up from 25%) - a 2.5x increase
43% want advisory relationships, not transactional (up from 15%) - a 3x increase
But here's the vulnerability: 42% of client trust still resides with individual partners, not the firm brand. And firms rate themselves 2.9/5 vulnerable to the loss of 1-2 key partners.
Research shows systematic relationship transfers retain 89% of clients. Ad hoc transitions? Only 64%.
That's 25 percentage points of revenue at risk, all because most firms wait until 6 months before retirement instead of starting the transition 18+ months ahead.
The Acceleration Trap
Perhaps most concerning: 62% of firms report faster paths to leadership (up from 45%).
This should be good news. It's not.
Faster promotion without faster development creates what we call the Acceleration Trap:
Speed of promotion > Speed of development = Unprepared leaders
Unprepared leaders + Complex challenges = High-risk transitions
The data confirms it: readiness scores declined from 3.8/6 to 3.6/6 even as paths accelerated.
The Generational Divide
67% of next-gen leaders expect their career path to look fundamentally different from current partners. Only 17% expect to follow the traditional climb.
Work-life balance now equals financing as a barrier to ownership (both at 27%). Meanwhile, 55% of next-gen aren't receiving any transition advice.
Ownership appeal? 3.6/5 - moderate, not enthusiastic.
The traditional partnership model is losing its appeal, yet few firms have redesigned it.
Why Traditional Approaches Are Failing
Most firms focus on "smoke" (visible symptoms) rather than "fire" (root causes):
Smoke: "We can't find qualified candidates"
Fire: You didn't build a 7-10 year pipeline
Smoke: "Next-gen doesn't want partnership"
Fire: Your model doesn't match their values
Smoke: "Our people aren't ready"
Fire: You're training them for the past, not the future
Plans without execution infrastructure are paper exercises. Technology investment without people investment creates tools without capacity.
What Actually Works
The firms succeeding in succession do five things differently:
1. They start earlier.
Identify 2032-2035 leaders today. Give them development experiences while seniors are around to coach.
2. They transfer relationships systematically.
18-month protocols starting well before retirement. Introduction, collaboration, transition, monitoring.
3. They reallocate training investment.
40-50% to people leadership and advisory capabilities. Not someday. This fiscal year.
4. They make succession someone's job.
Executive accountability. Tied to compensation. Board-level visibility. Measured quarterly.
5. They redesign partnership for new generation.
Tiered models, flexible equity, outcome-based evaluation. The old model isn't working.
The Strategic Question We Help Firms Navigate
Can you build leadership capacity fast enough to execute internal succession, or will talent shortage force external sale?
With 44% citing talent as their #1 risk and PE interest causing 50% to reconsider timelines, this isn't academic. It's existential.
Two futures exist:
Reactive: Succession happens to you. Scramble. Clients leave. Forced sale.
Intentional: Succession planned and executed. Next-gen ready. Choice on your terms.
The difference? Decisions made in the next 90 days.
Settling the Ball
In football, inexperienced players try to kick the high ball immediately and lose possession. Skilled players settle it, maintain possession, read the field, then make strategic passes.
Succession requires the same discipline: Settle (assess), maintain possession (stay grounded in your values), read the field (where is the profession going), then make strategic moves.
The firms that succeed won't be those that try hardest. They'll be those that read the game and act strategically on where the profession is going, not where it's been.
This analysis is based on Succession Strength’s 2025 survey of 30 accounting firm leaders compared against our 2019 baseline survey data, supplemented by external research on professional services succession trends. Questions about your firm’s succession journey? Contact us.