Firm Management
Number of the Day: 320%
Public accounting firms are adding far more nonequity partners to its ranks than equity partners over the last 15 years.
Jun. 25, 2024
The number of nonequity partners at the top 100 accounting firms (excluding the Big Four) with revenues of more than $48.8 million has increased by more than 320% over the last 15 years versus just 85% for equity partners, according to a recent blog by INSIDE Public Accounting.
“The accounting profession is adding far more nonequity partners to its ranks than equity partners, which means power is concentrated among fewer owners but stand-out pros are getting the opportunity for more responsibility, more autonomy and more money,” INSIDE Public Accounting wrote. “It’s a trend that’s remained solid for at least the last 15 years.”
INSIDE Public Accounting noted that at Horsham, PA-based CPA firm Kreisher Miller, the number of nonequity partners has increased from 12% to 59% of all partners since 2019. The numbers represent a shift in thinking, said Christopher Meshginpoosh, who goes by the title of managing director because partners are called directors at the firm.
He told INSIDE Public Accounting that the only thing holding back some “phenomenal” performers from becoming directors was business development experience, but there’s room for both.
“If we can get an outstanding business developer surrounded by people who can help them on the delivery front, make them more efficient and free up time for them to go out and make it rain even more, then that’s a really good answer for the firm,” Meshginpoosh said.
Consultant Kristen Rampe of Rosenberg Associates, who is a former CPA Practice Advisor “20 Under 40” honoree, said firms can benefit by adding more nonequity partners to the mix.
“By minting more partners, even if they’re not owners, it allows the firm to serve more clients without having to add to the number of cooks in the kitchen of business ownership,” she told INSIDE Public Accounting.