What are you being offered? Salaried partner? Fixed-share partner? Equity partner?

In today’s blog post, we look at the differences between a fixed share equity partner, (or as it is sometimes called fixed-share partner), a full equity partner or a salaried partner. There is a big difference in these three different types of partners. This is an extract taken from ‘How to make partner and still have a life‘.

Very often when people are asked if they want to join the partnership, it isn’t made clear what you are being offered. Are you being offered the chance to be ‘full equity’ or a ‘fixed share equity’ partner?  Or are you being given the title of partner, i.e. becoming a salaried partner, but remain on a salary with the expectation that if you prove yourself you will become an equity partner in two to three years time?

The terms ‘full equity’ and ‘fixed share equity’ refers to how partners are remunerated, and typically their seniority and voting rights within the practice. New partners will normally join the firm as a junior fixed share equity partner and progress to senior fixed share equity partner over a number of years after which they are expected to become full equity partners.

Newly promoted partners are typically admitted at the lowest point of a profit-sharing scale. The scale is usually based on a percentage or a number of points. Over a period of time, the percentage is increased according to the next step on the scale, which is agreed and approved by the full equity partners. A fixed share equity partner will receive a monthly ‘drawing’ from the firm based on the percentage of points they have accumulated, and the firm’s anticipated financial performance.

At the end of the financial year if the firm has performed strongly, the equity partners share the profit based on their individual percentage of points they hold. In a number of large firms, up to 25 per cent of the profits is held back and paid as a bonus to a full equity partner based on their performance during that year or, in some firms, based on their performance over the last three years.

Full equity partners have typically demonstrated their ability to build a sustainable and profitable client portfolio. Unsurprisingly, full equity partners are almost always the most senior and influential partners within a practice, and have full voting rights.

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This is an extract taken from ‘How to make partner and still have a life

Author Credit

HEATHER AND JO (DOORWAY)_5129Heather Townsend helps professionals become the Go-To-Expert. She is the co-author of ‘How to make partner and still have a life, and the author of the award-winning and best-selling, ‘The FT Guide To Business Networking‘.

Jo Larbie helps clients, both individuals and firms achieve their goals, drawing on her unique experience as a lawyer, consultant, human resources and development director, and senior executive. She is the co-author of ‘How to make partner and still have a life

Everything you need to know about building a personal and business case for partnership
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"Regardless of how much help your firm gives you, this is an essential read. There is no silver bullet when it comes to making partner, but this will do a damn good job of helping you get there if you act on the advice it contains. I really wish this book had been around when I was making the journey."
Phil Mullis, Partner, Wilkins Kennedy LLP

"This book is an invaluable aid to anyone considering the transition from associate to partner and employee to employer. Practical, thought-provoking and well-presented, the books allows you to dive in at any point, meaning that it is not just useful now, but will be for years to come."
Kevin Poulter, Legal Director, Bircham Dyson Bell LLP

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Found this article valuable? Then there is more valuable advice in my book

"I wish I had read this book two years ago"
Ex-PwC Partner

 "I started reading this book few months before getting into the partner track process and always regretted not getting hold of it earlier; this book has helped me to brainstorm about what is expected at that level and what is being done now and I was able to steer myself in the right direction. I would strongly recommend senior managers; directors to use this book at the earlier stage to start the journey towards the partnership".
New EY partner

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Author Credit:

Written by Heather Townsend, who helps professionals become the The Go-To Expert. 

Heather is the author of the  award winning and best-selling book on business networking, the FT Guide To Business Networking, co-author of How to make partner and still have a life, The Go-To Expert and Poised for Partnership. Connect with Heather on LinkedIn and Twitter,

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