Promotion to Partner in Big Firms: Truths and Trends

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
current estimate is that it takes an average of almost 13 years (Exhibit 1). Compared to the
previous survey, the time to make audit partner has increased by approximately one year,
and the time to make tax partner has increased by one and one-half years.

An advanced educational degree hastens the time to partner: True. While individuals
holding advanced degrees seem to make partner faster than those with only an
undergraduate degree, the average difference is less than six months. Only 23% of audit
partners hold advanced degrees, compared to 62% of tax partners (Exhibit 2). Thus, an
advanced degree does not appear be a crucial educational qualification for promotion to
audit partner.

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. Apparently, the
undergraduate education of most respondents that became audit partners provided an
adequate knowledge base for their promotion, while the majority of those becoming tax
partners sought additional education. 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. Although the majority of tax partners hold an
advanced degree, they did not make partner faster than auditors or faster than fellow tax
professionals with only a bachelor’s degree.

To make partner at a large firm, one must start at that firm: False. While it is not
necessary to start and stay at the same firm, the majority of partners do just that. In the
audit area, 81% of respondents worked solely for the firm at which they ultimately made
partner. Interestingly, since 1991, the percentage of new partners that make partner at
their original firm increased for both service areas. In addition, partners that had prior
work experience reported that such experience was in public accounting. Thus, the upside
is that people do not have to start and stay at the same firm to make partner. The downside
seems to be that it takes such people more time (approximately four additional years) to
make partner. 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. Consequently, partners with prior
experience tend to be older when admitted to the partnership than those without prior
experience.

New partners are younger than they used to be: False. The age at which people are
admitted to the partnership has increased. 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). The
decrease for tax partners was greater than for audit partners, but both groups reported at
least a 20% drop in the percentage making partner under 36 years of age. A combination
of factors may have caused the average age of tax partners to be older; for example, tax
partners are more likely to have both prior work experience and a graduate degree.

Most new partners are male: True. The percentage of female respondents admitted as
partners has doubled in the period between the surveys. While this may sound like good
news, the current percentage of females admitted to partnership is only about 16% across
both audit and tax service lines. 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), as reported by McInnes and Sanders (“The supply of
accounting graduates and the demand for public accounting recruits—1987; 1988; 1989”).
The large difference between female new hires and new partner admittances highlights
this continuing workplace challenge.

The amount of overtime required to make partner has decreased over time: False. In the
last decade, most public accounting firms have stopped paying employees for overtime.
However, respondents indicate that the number of overtime hours worked has increased in
both service areas and at all firm levels. Exhibit 4 shows that the increase is relatively
constant across employment levels in auditing. The annual overtime hours reported at the
staff level in taxation increased most, 29%. The lowest increases reported were at the
manager level. The overall trend during the last 10 years is for big-firm professionals to
work more, not less, overtime.

The Path to Partnership Has Become More Difficult

Admission to partnership in a big firm has always been a lofty career goal. Overall, the
path to partner is more difficult than in the past. New partners in the big accounting firms
are older, have more years of experience, and work more overtime hours than they did 10
years ago.

Robert E. Guinn, PhD, CPA, and Sak Bhamornsiri, PhD, CPA, are associate
professors, and Cindy Blanthorne, PhD, CPA, is an assistant professor, all in the
department of accounting at the University of North Carolina at Charlotte.