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Article | Executive Pay Memo North America

How attitudes about partner pay in professional services firms have changed

By Kenneth Kuk , Benjamin Viney and Sarah Huber | June 19, 2024

While the direct link between how much revenue partners generate vs. how much they earn may seem simple, allocation decisions are much more complex.
Executive Compensation

Managing the earnings allocation for partners is fundamental to running an effective professional services firm, regardless of whether it is organized as a partnership or another type of ownership structure. There is often a direct economic link between how much partners bring into the firm via revenue and profit and how much they receive as their share of the profit. Despite this direct link, partner earnings allocation decisions can be complex.

In 1983, David Maister examined many important aspects of professional services firm management in his book, Managing the Professional Service Firm. One chapter is dedicated to partner earnings, where Maister specifically opines on how firms differentiate these earnings based on a variety of factors.

Forty years after Maister’s original research, WTW has explored changes in partner earnings philosophies in a very different operating environment. WTW would like to thank David Maister for granting his permission to leverage and build on his original research.

Study highlights

Eight partner archetypes were defined in both Maister’s and WTW’s studies to examine the degree of earnings differentiation (Table 1).

Table 1. Defining the eight partner archetypes
Partner archetype Description
Average partner The typical partner
Rising young superstar Young and entrepreneurial; has built a loyal following of associates
Unproductive older partner May have run out of gas; suspect personal problems at home
Individualistic solo operator Likes handling high visibility projects and cases; may be slightly glib
Partner associate Less effective in developing business; relies on other partners for opportunities
Executive committee member Tries to do everything; major force in the firm
Struggling office leader Manages branch office that has poor profitability
Major rainmaker Passes clients and work on for others to handle

Per David Maister’s 1983 book, Managing the Professional Service Firm.

In his original work, Maister noted that the range of responses varied significantly. Today, 40 years later, the range is even larger for five of the seven partner archetypes. This points to the importance of doing what is right for your firm, its history, culture and circumstances, yet serves as a reminder to be mindful of practices that exist elsewhere. In part, this awareness helps attract talent from other firms and defends against partners being targeted by firms with more attractive pay propositions.

Key highlights:

  • Expectations of partners’ nonfinancial contributions have increased, such as people and intellectual capital development.
  • There is a general tendency to expect more from the average partner and differentiate less for partners in different archetypes, on average.
  • In 1983, the average firm paid major rainmakers 1.75 times the average partner. The average multiple dropped considerably in this most recent study, but the range of responses from firms has significantly widened.
  • Effective performance management for partners is a top priority for firms that want to enhance their partner-earnings allocation methodology.
  • Governance for partner earnings has improved in the past 40 years, with most firms employing a committee separate from executive management to oversee earnings decisions.
  • Partners are increasingly expecting greater transparency in how earnings allocation decisions are made.
  • For firms challenged by disconnected pay and performance for partners, short-termism and individualistic behaviors are their top concerns.


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