Welcome to College Confidential!

The leading college-bound community on the web

Sign Up For Free

Join for FREE, and start talking with other members, weighing in on community polls, and more.

Also, by registering and logging in you'll see fewer ads and pesky welcome messages (like this one!)

As a CC member, you can:

Accounting firm partner

KendellKendell Posts: 88Registered User Junior Member
I would like to know what the experience latter would look like, requirements to hold this position, and/or what it takes

also, what is the average salary for this position???
Post edited by Kendell on
«1

Replies to: Accounting firm partner

  • KendellKendell Posts: 88Registered User Junior Member
    anybody? also, who is responsible for your promo to partner?
  • ryanbisryanbis Posts: 836Registered User Member
    The other partners are, of course, the people who decide who deserves to become a partner. There's no other way to become an owner of a partnership.

    For large/Big 4 firms: When you first join an accounting firm, you are an associate. After 2-3 years, you become a senior associate. By the 5th or 6th year (if you're still around), you become a manager. Partner comes much much later.

    Compensation will vary greatly by the size of the firm.

    Requirements to become partner: a minimum of at least 15 years public accounting experience (give or take), CPA, sales skills

    Keep in mind that this is not the type of job you plan to pursue while you're in college. This happens way way down the line and most people who go into public accounting leave the industry within 3 years and use the experience to pursue other careers. If you work in public for a little while and decide you love it and want to stay, that's great, but I wouldn't go in expected to eventually make it to partner (especially at a larger firm).
  • KendellKendell Posts: 88Registered User Junior Member
    is it the same grounds for a law firm partner also? after about 15years service???
  • go5878go5878 Posts: 154Registered User Junior Member
    One thing I would second from ryanbis's post is the need for sales skills in the modern accounting firm. It used to be enough to be a great technician and know the IRS code or GAAP and FASB's backwards and forward. Now you really need the ability to network and sell, sell, sell (see Enron).
  • KendellKendell Posts: 88Registered User Junior Member
    ryanbis, I've done a little research about this climb to partner status in an accounting firm, and the little info I was actually able to come up with says that CPA's generally make partner around the 10 year mark!!!???
  • ryanbisryanbis Posts: 836Registered User Member
    Unlikely, especially in a larger firm. 10 years sounds closer to making senior manager.

    The following article says that it takes an average of 13 years (so 15 wasn't too far off).

    http://www.nysscpa.org/cpajournal/2004/404/essentials/p54.htm

    Keep in mind that only 2% of people who start out in public accounting actually make it to partner. I wouldn't recommend going to school with the idea that you're going to eventually be a partnre in a Big 4 firm.
  • KendellKendell Posts: 88Registered User Junior Member
    I C, would you happen to know what the average compensation is for a manager and partner in a top accounting firm?
  • NoobTakularNoobTakular Posts: 109Registered User Junior Member
    I read an article somewhere which told that many accounting students are given the wrong impression about attaining the accounting partner title. The article said that accounting partners visit campuses and even give grants to professors to show accounting in good light to make sure there is a steady inflow of new accounting graduates to the Big Four. The retension in very low in big firms due to harsh working conditions and the benefits of switching into Private accounting.
  • ryanbisryanbis Posts: 836Registered User Member
    While I agree that the retention rate amongst large public accounting firms is extremely low, I disagree that students are given the wrong impression about their chances of becoming partner. I do not know of a single person--either in my graduating class or just people I've met at the various firms I interviewed alongside of--that went into public accounting and expected to stay in it long enough to be partner. Most, in fact, already planned to leave after 2-3 years.
  • KendellKendell Posts: 88Registered User Junior Member
    really eh y is that? wouldn't it be worth it in the long run sticking it out and making partner?
  • Strick11Strick11 Posts: 954Registered User Member
    In the distant past, it was possible to make partner at a Big 4 (Big 8 back then) in 10 years, though that was generally in one of the consulting divisions. Consultants have more options when it comes to generating the kind of sales numbers it takes to make it. All the firms have slowed that down to where 15 or longer is common.

    The big issue with making partner is definitely sales, sales, and sales, though client relations, business management and having the right sponsor are all vital, too.

    What we used to say about making partner is probably still true, a little thing called the "S&M" theory of the partnership: Only the stubborn and the mediocre make partner. If you're really bad, they don't keep you around long. If you're really good, someone in industry offers you more money. What remains are the guys who are neither particularly bad nor particularly good and those rare few who are intent on being partner and are too stubborn to quit. BTW, if you ever tell this theory to a partner, you're supposed to remember to insert the phrase "like you" right after "those rare few who are intent on being partner and are too stubborn to quit" no matter what the truth is about the individual you're speaking may be.
  • 311Griff311Griff Posts: 1,586Registered User Senior Member
    Kendell, average compensation is a good six figures--$125k to $300k depending on location, etc.--for partners of international firms like the big four. If you are a partner of a smaller, regional firm? probably right around $100K.
  • jasong3131jasong3131 Posts: 2Registered User New Member
    311Griff, you are way off. I don't know where you go to college that you think a partner only makes 125-300k. I just today was talking to the Minneapolis partner of PwC and he assured me that he is making $700,000+ a year in raw cash compensation.

    You can make 125K by the time you are 30. Good luck in your future, and I hope you don't accept these low standards you have of the profession.
  • DaNDHSIrishGuyDaNDHSIrishGuy Posts: 197Registered User Junior Member
    Forget partner! Do you guys know how hard it is to even get a Big 4 job offer these days? Try getting your foot in the door before you start thinking about partner for gods sake. Especially now with finance grads switching...
  • Strick11Strick11 Posts: 954Registered User Member
    Partnership compensation is a little complicated. As a rule, accounting partners have no salary and are paid based on the percentage of the partnership they own (their units) and how well the firm as done for the year. Oddly enough, they only get paid once a year, once the firm has determined how much money they've made and set the value of a unit.

    Partners may also be called upon to contribute capital or cover lawsuits. Someone calls and you write a check for $50k or whatever is asked. Accounting firms are literally partnerships. They have some limits on their liability, but as a rule, the firm's capital is only as deep as the individual partner's pockets.

    The number of units a partner owns typically corresponds with their level of responsibility in the firm and how much business they generate. For instance, the partner in charge of the Minneapolis office is fairly high up in the organization. I doubt that more than 200 of the tens of thousand of US employees at PwC make the kind of money he does.

    I don't know the audit side that well any more, but I suspect that their compensation starts around $175k and is typically $300-400k for average partners. In good times, of course.

    Note that accounting firms do go through good times and bad, just like any industry. Prior to the passing of the Sarbanes-Oxley Act (jokingly referred to as the "Accountant's Full Employment Act"), their business had been in a long decline. It's hard to tell how they'll be impacted by the current economy, though I'd suspect those in financial industry practice will see an uptick in their compliance business soon.
«1
Sign In or Register to comment.