Friday, 18 November 2011

It Is To Become A Partner?

It is a fact of life in the big four: you are there to become a partner. This expectation can not be explicit in Big Four culture, but the underlying is undeniable. If all decisions are not focused on becoming a "member of the firm", his career is in constant danger. The purpose of his being is to achieve that status.

The mystique of the partnership is evaporating, and can change the nature and composition of the Big Four fundamentally. Yes, Mr. Dylan, the times are-Chang "Anecdotally, leaders to speak more quietly -. -. That Never publicly what their next move would be illegal to have occurred in a low voice conversations outside the office - often created by Frank advice younger employees.

But where will you go?

Many managers are considering VP and C-level positions, instead of running the partnership. Lifestyle want to reference (ie for the road), earning potential, and less politically environments, even the most successful leaders to explore careers outside the Big Four.

In addition to these internal pressures, up and comers clearly worried about the strength - and costs - the structure of the partnership. Once upon a time, the partnership buy-in was considered untouchable as an investment. In recent years, however, have defined this concept.

It all started with Enron.

Many consultants and accountants in our community are still in pain in the collapse of Andersen - especially ex-Andersen people who have fled the remaining four large. The professionals who worked at Andersen, especially former partners, are well aware of the risks of buying partnership. New partners, who have less than five years as a member of Andersen, were brutally and economically. Their buy-in loans were secured with their partnership units. The collapse of Andersen led to a negative equity situation for them, the partners, had hundreds of thousands of dollars and could not sell shares to repay loans.

A similar fear ran through KPMG, recently. Under investigation for selling abusive tax shelters, KPMG agreement with the Department of Justice. The agreement includes a $ 456 million. While KPMG avoided the fate of Andersen, the resulting fine equates to around U.S. $ 300 000 for each partner of KPMG in 1600.

The declining interest of the permanent members is supported by potential changes in the structure of the company. Accenture and BearingPoint have forsaken the partnership model, and now trade on public markets. Doubts as to protect the limited liability model is the cause of the Big Four to consider participation - instead of partnership.

Once recognized as an elite club in the accounting industry and major consulting partnerships are losing their mystique. The companies themselves continue to provide the best services available in the market, but the companies themselves undergo a fundamental change. Each partner used to hope to grow up to become a partner. Senior management can prove it - and could not think of anything else.

Big Four preferred structure is under threat from the outside. Once considered almost risk-free investment, we have learned from Andersen and KPMG the contrary. This investment risk, accelerated erosion of protections offered by the LLP structure. Greener pastures attract talent of the partnership, when the legal system places the siege to this venerable institution.