• Big 4

    To Partner or Not to Partner: That Is the Senior Manager’s Question

    By | February 12, 2018

    A while back, a Big 4 senior manager reached out to share his plight. In short, this person told us making partner in a big firm is nothing but a game; tn this person’s words, “[There’s a] Game of Thrones-esque BS that goes on in the firm as people try to jockey to be promoted in the coming year.”

    This statement, in and of itself, was not news to us, but the complainant went into a level of detail we hadn’t seen in quite some time, if ever, from a person living the professional back-and-forth that many senior managers experience within accounting firms, most often Big 4 firms.

    First and foremost, this person told us, the technical chops you bring to the table are mere table stakes. Once you’ve accepted that, however, and worked toward accomplishments in other areas of the firm, it may still not be enough to give you the boost you need to make partner.

    Aside from the professional expectations, the other problem facing senior managers is whether an individual fully understands and desires the ownership aspect of being partner. Our source told us that as time goes on, “I question whether I want to be a part-owner of a business like this.” Our source is cynical about intermediate positions like managing directors, non-equity partners, and the like, seeing them as appeasements for those seemingly parked at senior manager.

    The goal of becoming a partner is something many people start their careers with, but the desire erodes, especially within the Big 4, for a variety of reasons. Our source’s list of grievances is long, but here are some highlights that this person shared with us:

    • “The promotion (any promotion—not just the partner one) process is political—it doesn’t matter who you are, what you’ve done, where you did it, or how much it was worth, it only matters who knows.”
    • “The process is never about your accumulated contributions, but rather […] ‘what have you done for me lately?’”
    • “The firm almost always looks to the external business need (i.e., revenue) when making decisions, and even then it is usually for the short-term. But if we don’t solve our internal problems, we won’t have a business for much longer and these needs are decidedly not revenue-generating.”
    • “Let’s be honest, the reason we do things this way is because we’ve always done them this way.”
    • “At first glance, the promotion process in public accounting seems to be merit-based.  But in actuality, what we have is a system based on tenure (i.e., you’ve been here long enough and not become fed up with said system and left) and cronyism (i.e., who do you know).”
    • “This is all in addition to the performance management process being inherently subjective and therefore flawed to its core.”

    For those who’ve already become partners, these complaints might seem resentful or cynical. We reached out to many current, recently promoted partners, however, most didn’t respond, or declined to comment. But based on conversations Going Concern had with former partners, as well as current and former senior managers who’ve experienced the process first-hand, they confirmed many elements that our frustrated senior manager expressed.

    One former PwC partner told us that there are many paths to partner but “[it] is often more a case of being in the right place at the right time.” This includes “getting on the right job, being part of a winning proposal, getting the favor of a powerful partner,” but most importantly “getting proposed [as a partner candidate] in a year where the business case is easy—the firm is growing fast and you are not simply waiting to replace a retiring partner.”

    Even those senior managers who might have a clear path to partner are unsure. One senior manager at a national firm told Going Concern that he had been encouraged by many to pursue a promotion to partner. This person’s firm has a formal process for senior managers that teach about the role of a partner and allow for networking internally and externally. This process, our source said, provides the opportunity to hear a lot of different perspectives, dealing with the lifestyle, and what the professional responsibilities are like. This person estimated that 20% of senior managers are confident that they want to make partner; 20% are unsure; and 60% are uncertain about risk, lifestyle, and whether or not they want to stay at the firm.

    Ultimately, this senior manager felt that the responsibilities of business development did not align with his preferred activities of technical knowledge, mentoring, and training. This person said that it’s “very difficult to decide what you want to be when you grow up. [I’m] still trying to figure out whether this is the thing for me.“

    Then there are those senior managers who were certain about NOT pursuing partner. A KPMG director who opted for a non-partner career in his firm’s assurance practice told Going Concern that he was “really happy to not pursue the partner track” because “mistakes are scrutinized” and that it doesn’t seem worth it “to have one bad audit derail your career.” This person felt that in the short-term, there were still many senior managers interested in making partner, but in the next 10-15 years, that could change. “Accounting, in general, pulls people who are more ‘old school.’” The rising generations may not be as interested in such linear careers, this person said.

    Despite the indistinct chaos of busy season, thinking about the next step is never out of the minds of Big 4 professionals. Third- or fourth-year senior managers, especially, have to wonder how long their patience will last. And given the increasing number of lucrative and more flexible career paths, the appeal of the partner track may be slipping.

    • Goodwill Hunting

      Accurate

    • BigWho

      There are several factors, right place right time cannot be underestimated though – which would indicate it is more chance/luck than your inherent qualities. That said, there are some attributes that are relevant – being on a large/very large account, having the support of multiple partners across lines of service or geographies (so not all in your home office), relevant outside activities (less relevant but there), cycles of experience (secondments, other line of service work, etc). Technical skills are table stakes, agreed – so no extra credit for that unless you are going to National office. For candidates, I always advise to get as much broad based – geographic and line of service – support that you can, and never put all your money on one partner who is your sponsor. A partner today that is powerful tomorrow can be out, reassigned, retired, politically emasculated, etc – so you need to have some level of diversification.

    • Adam Hill

      So the KPMG director thought he/she was immune from having a shitty audit derail his/her career? Seems like “opted out of partner” might be a little off b/c who wouldn’t want a lower paying job for the same shitty day to day life??

      • keepin_it_real

        Exactly. Not too many people opt out of partner unless they’re old as shit and doesn’t make sense to take on partner loans.

        • Adam Hill

          Three year payback on the buy in, no cash flow difference from being a senior manager. The difference is what goes towards the buy in, which I am assuming is what you mean by partner loan.

          I’ve seen audits take three years……

          • keepin_it_real

            Not sure where you get the 3 year payback and no cash flow difference. It’s different from firm to firm, but if you’re in your late 40’s, then it doesn’t make much sense to become a new partner at a big firm. Most firms have mandatory retirement for partners and you won’t get much of a chance to fully vest in the partner pension if you become a partner too late.

            • Adam Hill

              Fair enough, however I think you missed my point. All I am saying is that MY opinion is that it makes zero sense to not choose being an equity partner vs anything/everything else. Therefore “opting out” seems fishy to me.

              Unless YOU are the director in question???

            • keepin_it_real

              I agree with you for the most part unless you’re old and close to retirement then it doesn’t make sense to be a partner. If you’re going to hit mandatory retirement before fully vesting in the partner pension then you shouldn’t be a new partner.

              No I’m not that director. I work in industry now.

    • Derrick Rose

      once in a blue moon, Going Concern publishes a decent article instead of farticles.

      • HWSquared

        Agreed. This and the Controller Switching article are actually interesting, researched (ish) pieces. I’d ask for more, but I think it would have the same effect as it did in Oliver Twist…

    • Big4Veteran

      This decision should be made before promotion to senior manager. You should decide by manager, at the latest. If you don’t want to be a partner, and you stay at the firm to senior manager, then you stayed too long.

      In my experience, there are three types of senior managers: (1) partner track, (2) those who think they’re on the partner track and (3) dumb fucks who haven’t thought about what they want to do with their life/career. Note: Some firms now have a director track, which is sort of like being senior manager for life, which is ok I guess, if you’re into that sort of thing.

      • SullaCPA

        I agree. This decision needs to be made at the manager level at the latest. At the senior manager level, in my opinion, it’s too late to leave public accounting for corporate industry in order to receive larger benefits over costs. When leaving at the senior manager level or later, it’s the law of diminishing returns.

    • Fatass Partner

      Partner here.

      I never quite understood those senior managers who worked to death (they would literally wake up at 3am and log on to the VPN to check their email). As a senior manager, I just delegated my tasks to the manager, and he kept that shit going down hill to the senior. I never worked a day past 8 pm (including weeks before filing date). The senior managers who worked to death got axed, while I made it to the top.

    • sludgemonkey

      One observation I have is that you can probably get some action with the partner’s wives if you want to, as they might be getting money but they are not getting satisfied. If you play this right the interns and the partners wives offer two pools of prospects and you don’t need to seek action at client sites with key financial personnel, thereby damaging the partners cash flow. So indirectly this is good for you too.

      • Ron Burgundy

        Do you have anything productive to post? I feel every one of your posts has a sexual reference to a partner’s wife or helpless intern.