[tidepod12]

Every firm has its own specific way of doing it, but the short version is that non-partner workers at a firm are normal employees with a normal salary, benefits, etc. But they do not own any equity/stake/shares in the firm.

Once you are promoted to partner, you are no longer an employee of the firm and in some cases you no longer earn a salary. Instead when you are promoted to partner, you are allowed to "buy in" by purchasing a certain number of shares of the company. Once you own those shares you are then part-owner of the firm (rather than an employee) and enjoy profit-sharing.

[mox1]

Relative is in HR at a big4, this is basically correct. Some ballpark numbers.

A "first year" partner may have to pay ~$150,000 into the partnership, on perhaps a $300,000ish a year in profit sharing. Usually this is just a reduction in the profit sharing (or perhaps a multi year loan, i forget). Its not uncommon to earn less as a first year partner than your last year as Managing Director. You are not longer an employee, but part owner. You move onto a totally separate HR system (Benefits, etc.).

Relative works with mostly senior partners, multiple of them are making $1 million+ a year. That's not common, but as you move up the ranks of partnership, that's not a crazy salary. They work a lot, are all divorced, don't seem to even have time to enjoy the $$ etc. Listening to the details, I'm not super jealous.

[FuckButtons]

It may be different in other firms but at least for the big 4 firm in familiar with sr managers can be promoted to either partner or managing director, and mds usually take home more that first year because of the buy in, usually in the form of an interest free loan.

[mox1]

That sounds correct from what I have heard as well.