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By Robert E. Guinn, Sak Bhamornsiri, and Cindy Blanthorne Has the profile of big-firm partners changed over time? What is the average age of people making partner? How long does it take to make partner? Will an advanced degree accelerate promotion? Do audit partners have personal and professional characteristics similar to those of tax partners? These questions are of interest to most accountants, from students considering a career in public accounting to experienced professionals pursuing partner status. Big firms are worth focusing on for at least two reasons:
Big-firm public accounting experience is required, or at least preferred, for many public and nonpublic accounting positions. Public accounting continues to be dominated by the big firms that audit large publicly traded companies.
The Sidebar tests awareness of “truths” and “trends” encountered on the road to partner in the big public accounting firms. Core Capabilities for Partners Before an individual becomes a partner in a public accounting firm, various capabilities must be acquired and demonstrated. These capabilities are generally obtained through education and work experience at various levels and, potentially, types of employment. In addition, overtime work is a basic element of a public accounting career, especially at big firms. This article is based on two surveys of large-firm partners in audit and taxation. The most recent survey included 402 respondents that were newly promoted to partner at the (then) Big Five. The initial survey, reported in 1991, involved 392 partners from the (then) Big Six. Comparison between the two surveys illuminates changes in the past 10 years. A CPA certification is essential to making partner: True. Virtually all of the audit and tax partners surveyed were CPAs. Tax partners were somewhat less likely to be CPAs, but the average was still very high, 89%. At one time, public accounting firms would not promote an employee from staff to a senior or supervisory level without CPA licensure. The 1991 survey found that 100% of the partners in both audit and tax were CPAs. Over time, most of the big firms have relaxed the CPA requirement, but the renewed focus on the traditional lines of public accounting service may once more make the CPA required for advancement. It takes more time than it used to take to make partner: True. Individuals that wish to join a big firm commonly want to know how many years it takes to make partner. The
The percentage of new partners under the age of 36 declined from 73% to 49% over the 10 years between the two studies (Exhibit 3). In addition. In the audit area. partners that had prior work experience reported that such experience was in public accounting. The age at which people are admitted to the partnership has increased. While individuals holding advanced degrees seem to make partner faster than those with only an undergraduate degree. the undergraduate education of most respondents that became audit partners provided an adequate knowledge base for their promotion. an advanced degree does not appear be a crucial educational qualification for promotion to audit partner. The percentage of female respondents admitted as partners has doubled in the period between the surveys. The decrease for tax partners was greater than for audit partners. and the time to make tax partner has increased by one and one-half years. the upside is that people do not have to start and stay at the same firm to make partner. Compared to the previous survey. one must start at that firm: False. compared to 62% of tax partners (Exhibit 2). the majority of partners do just that. for example. the percentage of new partners that make partner at their original firm increased for both service areas. Education beyond an undergraduate degree could be an expected norm in the taxation area because typical undergraduate accounting programs do not include much coursework in taxation. Thus. The difference in time to make partner with or without prior experience may indicate that firms are not recognizing prior years’ service with other firms as equivalent to years of service with their firm.current estimate is that it takes an average of almost 13 years (Exhibit 1). Apparently. partners with prior experience tend to be older when admitted to the partnership than those without prior experience. Consequently. While this may sound like good . but both groups reported at least a 20% drop in the percentage making partner under 36 years of age. Most new partners are male: True. The survey respondents are of an age that they were probably not required to fulfill the 150-hour education requirement in place for current graduates. the average difference is less than six months. while the majority of those becoming tax partners sought additional education. since 1991. they did not make partner faster than auditors or faster than fellow tax professionals with only a bachelor’s degree. New partners are younger than they used to be: False. Although the majority of tax partners hold an advanced degree. Thus. Only 23% of audit partners hold advanced degrees. The downside seems to be that it takes such people more time (approximately four additional years) to make partner. tax partners are more likely to have both prior work experience and a graduate degree. A combination of factors may have caused the average age of tax partners to be older. An advanced educational degree hastens the time to partner: True. 81% of respondents worked solely for the firm at which they ultimately made partner. Interestingly. the time to make audit partner has increased by approximately one year. To make partner at a large firm. While it is not necessary to start and stay at the same firm.
In the last decade. overtime. not less. PhD. New partners in the big accounting firms are older. Exhibit 4 shows that the increase is relatively constant across employment levels in auditing. have more years of experience. The lowest increases reported were at the manager level. The Path to Partnership Has Become More Difficult Admission to partnership in a big firm has always been a lofty career goal. the path to partner is more difficult than in the past. CPA. 1989”). PhD. and Sak Bhamornsiri. is an assistant professor. PhD. CPA. . Related new hires for the years in which current survey respondents were originally employed was estimated to be approximately 45% female (using a three-year average). The overall trend during the last 10 years is for big-firm professionals to work more. CPA. Overall. Guinn. the current percentage of females admitted to partnership is only about 16% across both audit and tax service lines. and work more overtime hours than they did 10 years ago. The amount of overtime required to make partner has decreased over time: False. 29%. 1988. Robert E. most public accounting firms have stopped paying employees for overtime. are associate professors. all in the department of accounting at the University of North Carolina at Charlotte. The annual overtime hours reported at the staff level in taxation increased most. as reported by McInnes and Sanders (“The supply of accounting graduates and the demand for public accounting recruits—1987.news. respondents indicate that the number of overtime hours worked has increased in both service areas and at all firm levels. and Cindy Blanthorne. However. The large difference between female new hires and new partner admittances highlights this continuing workplace challenge.
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