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Adding New Partners: 19 Reasons to Choose between Equity and Non-Equity

The ways they differ.

By Marc Rosenberg

It’s worth exploring the reasons for equity partners in great detail.

Here are the key points:

  1. New partners deserve the promotion to such a great extent that the firm can’t afford not to admit them to the ownership ranks.
  2. The firm needs to expand its partner ranks.
  3. The firm needs to replace a departed partner.
  4. It rewards longtime managers who have solid client service skills.

MORE: What Firms Should Address in Partner Agreements | Six Systems Used to Determine Partners’ Goodwill Payments | Fifteen Steps to New Partner Buy-in | Four Philosophies for Managing a CPA Firm | Public Accounting as a Business, 101 | 16 Steps to Creating a Partnership Path | Six Ways New Partners Differ from Managers | The Four Essentials for Every New Partner
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  1. It’s part of a succession planning strategy.
  2. Partner promotions send a strong message to the staff.
  3. It energizes the partner group.
  4. It’s part of a merger strategy.