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January 27, 2023

Compensation Watch ’19: Partners Are Down with IPP

I got an email the other day about the latest Rosenberg MAP Survey being available for purchase, and because I don’t have an extra $500 laying around (and neither do The Powers That Be at Accountingfly), I went looking for highlights from this year’s survey instead.

And I stumbled upon some updated info about income per partner:

The income per partner was $470,000, 6.6% higher than the prior year. Finally, the growth in profitability (6.6%) catching up to the top line growth (7.7%)!

So, yeah, public accounting partners are down with IPP. Even moreso for the partners who work at “elite” firms, which is defined by The Rosenberg Associates as firms with IPP of more than $500,000. There were 92 firms that are considered elite in the survey.

Some key observations of the difference between elite firms and mainstream firms:
  • The average IPP of all 92 elite firms at $756,000 is nearly $306,000 more than the mainstream average. The IPP of the 58 firms with IPP over $600,000 averaged an impressive $883,000

You will note in our analysis certain stats and their correlation with income per partner that leverage is one of the most important driving factors. Leverage can be measured in different ways:

    • The staff to partner ratio of the elite firms is 8.8 vs. the mainstream average of 6.1
    • The net fees per equity partner of the elite firms are $2.4 million vs. the mainstream average of $1.6 million
    • The fees per person of the elite firms are $217,000 vs. the mainstream average of $183,000
    • Elite firms’ partner billing rate of $378 is much higher than the mainstream average of $325

So, in short, equity partners at public accounting firms are doing just fine, thank you.

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