Re-thinking the long-term partnership model in professional services

I’ve spent most of my career in the traditional professional services structure: the pyramid. With a wide base of trainees, a narrowing middle and a thin layer of partners at the top. That shape used to make sense, but it doesn't anymore. Now, the middle has strengthened and the senior layers have grown, so they look less like a pyramid and more like a house. This has happened because clients want senior attention earlier and the people in the firms want a realistic route to partner, not a fifteen-year wait.

So, we've started to rethink what a multi-disciplinary professional services partnership should look like, starting with what our clients actually want from us. Many tell us they value the level of senior time and attention they receive, more than they get elsewhere in the market.

To meet this need, and support our own growth, we’ve set ourselves a target to recruit around 160 new partners by the end of 2027. So far, we have achieved over 60% of this target through a mix of internal promotions and external hiring, with over 100 partners secured this year and we will continue to recruit at pace into 2027.

What’s been interesting in our recent recruitment drives is that the people applying, at partner level and throughout the firm, aren't limited to the usual competitor swaps. We're seeing interest from consultancies, technology firms and industry, as well as the traditional accountancy pool. People are moving for the varied work and new direction of the firm, showing how important it is for accountancy firms to branch out and look beyond the stereotypical candidate.

Rethinking partner reward has also been part of this with a new model that splits between in-year and long-term incentives, with a premium of around 50% against typical market rates.

While boosting partner numbers and rethinking reward at the top will attract interest there, it won’t create the level of motivation and commitment throughout the organisation that a business needs to grow. Employees should also be encouraged to take responsibility, think like owners and make confident decisions. The introduction of our Employee Benefit Trust, that rewards our people for their contributions to the firm’s future success, alongside revamped partner reward creates a very different kind of firm.

Currently, there is no IFRS Accounting Standard or guidance dedicated to accounting for carbon-related instruments. Consequently, companies have had to develop their own accounting policies to account for these instruments as either assets, liabilities, income or expenses. As a result, several accounting treatments are observed across companies.

On the assets side, these instruments are most often accounted for as ‘intangible assets’, followed by ‘inventories’ and ‘financial assets’. Some companies presented these instruments as ‘other assets’. Further, these instruments are measured at cost or at fair value (or a combination of both approaches). Some companies do not disclose their measurement approach at all. On the liabilities side, some companies recognise provisions on a gross basis, while others do so on a net basis. 

The size of these instruments, as a percentage of total assets or revenues, varies considerably among companies without being significant for all companies. This indicates that the instrument’s magnitude is not the sole determinant for recognition and disclosure in the financial statements. Nevertheless, there is room for improvement to provide information in the financial statements about these instruments’ nature, function, intended use, useful lives, amounts and accounting policies to help users understand their relevance and financial effects on the company. 

Relatively few auditors’ reports discuss issues around carbon-related instruments. Those that do tend to discuss issues relating to the exercise of judgement or the use of assumptions, such as accounting for carbon-related instruments, measurement of these instruments, impairment tests for assets, and changes in accounting policy. 

Growth through targets like these can't be a one-off, and the focus can't just be at the top. To build a sustainable pipeline of senior talent, firms need to invest at every level.

Too few firms have a credible route from trainee to partner that people believe in. We've recently revamped our trainee programme so people joining our firm can see a clear pathway to partner, giving them a career they can plan around. We've also looked at reward for people starting out and are proud that our salaries at this level are market leading.

While there's often a clear focus at the top and at entry level, those in the middle can feel forgotten; even though this group is critical to creating a firm's next generation of senior leaders. In research we conducted of 600 women who'd worked in the professional services sector for 10 to 20 years, two-thirds wanted to progress to more senior positions, but a quarter felt that there was no opportunity to do so with their current employer. There is clear appetite for progression at these levels, and it’s this gap between appetite and opportunity that firms need to close.

We’ve invested significantly in this space with an internal development programme for high-performing colleagues at manager, senior manager and associate director level, plus targeted outreach to people in similar roles at other firms who are good enough to make partner but don't see a way to get there where they are.

I don’t believe that senior recruitment and junior development should sit in separate conversations. To me, they’re two routes to achieving the same goal. A firm that only hires partners from outside and only develops the people nearly ready for promotion will lose everyone else who's aiming to get there but has longer to go. A trainee scheme that talks about partnership as a distant, opaque possibility, rather than a realistic outcome, will also lose good people to firms that make that path clearer.

Development can't stop once someone qualifies and becoming a partner needs to be a special destination that people are focused on achieving.

Auditors should:  

• check the coherence of information in the financial statements and the narrative part of an annual report, and  
• lend their technical expertise to support the development of globally applicable guidance for consistent accounting treatment of carbon-related instruments, and to help ensure the resulting accounting and disclosure requirements are auditable. 

​​​​​​​See here for the full report. 

Main image: Aaron Saw, head of Corporate Reporting Insights – Financial, ACCA

Main image: Abigail Fisher, chief people officer, Grant Thornton UK.