|
Click Here for more
articles
|
|
|
|
Is
It Worth Becoming a Partner?
|
|
by: Thomas
Johansmeyer
|
It’s
a fact of life in the Big Four :you are there to become a partner. This
expectation may not be explicit in Big Four culture, but the
undercurrent is undeniable. If your every decision is not focused on
becoming a “member of the firm”, your career is in
perpetual jeopardy. The whole reason for your being is to attain that
status.
The mystique of the partnership is evaporating, and it could change the
character and composition of the Big Four fundamentally. Yes, Mr.
Dylan, the times, they are a-changin’. Anecdotally, more and
more
senior managers talk quietly – never publicly –
about what
their next moves would be. Those illicit conversations occurred in
hushed tones away from the office – often emerging from frank
advice offered to more junior staff members.
But, where do you go?
Many senior managers are considering VP and C-level positions instead
of shooting for the partnership. Citing lifestyle desires (i.e. getting
off the road), earning potential, and less politically charged
environments, even top-performing senior managers are exploring careers
outside the Big Four.
Aside from these internal pressures, up-and-comers clearly have
concerns about the resilience – and costs – of the
partnership structure. Once upon a time, the partnership buy-in was
considered a pristine investment opportunity. The past few years,
though, have called this perception into question.
It all started with Enron.
Many of the consultants and accountants in our community are still in
pain from the collapse of Andersen – especially the
ex-Andersen
folks who have sought refuge at the remaining Big Four. Professionals
who worked at Andersen, especially former partners, are acutely aware
of the risks inherent in buying into the partnership. New partners,
with fewer than five years as members of Andersen, were brutalized
financially. Their buy-in loans were collateralized with their
partnership units. The collapse of Andersen led to a negative equity
situation for them; partners owed hundreds of thousands of dollars and
could not divest their units to repay the loans.
A similar fear rippled through KPMG, recently. Under investigation for
selling abusive tax shelters, KPMG settled with the Justice Department.
The settlement included a fine of $456 million. While KPMG avoided the
fate of Andersen, the resulting fine equates to around $300 thousand
for each of KPMG’s 1,600 partners.
The declining interest in firm membership is supported by potential
changes in firm organization. Accenture and BearingPoint have forsaken
the partnership model, and both now trade on public markets. Doubts as
to the protections of the limited liability partnership model are
causing the Big Four to consider incorporation – instead of
partnership.
Once recognized as an elite club in the accounting and consulting
industries, the major partnerships are losing their mystique. The firms
themselves continue to provide the best services available on the
market, but the firms themselves are undergoing a fundamental shift.
Every associate used to hope to grow up to become a partner. Senior
managers could taste it – and would think of nothing else.
The Big Four’s preferred structure is under attack from the
outside. Once considered an almost risk-free investment, we have
learned from Andersen and KPMG the contrary. This investment risk is
magnified by the erosion of protections offered by the LLP structure.
Greener pastures lure talent from the partnership while the legal
system lays siege to this venerable institution.
About the author:
Hi! I am Thomas Johansmeyer. I am an article writer with http://www.big4.com
If you have any questions mail me at webmaster@big4.com
Circulated
by Article
Emporium
|
|
