The Big Four have a partner problem — and they're losing talent

Business Insider

24-04-2025

Making partner at a Big Four firm has long been the consulting industry's golden ticket to prestige and big paydays, but amid economic headwinds and slowing demand, it's not what it once was.
In their 2024 financial years, total revenue growth at all four of the world's leading professional services firms — EY, Deloitte, PwC, and KPMG — dropped.
The slowdown hasn't just been bad for the books. It's created a problem in the partner ranks at the Big Four.
Partners are the most senior employees at the firms and are responsible for networking with clients and bringing in business. Those with equity status get a share of annual profits, meaning that as margins have tightened, partners' annual payouts have declined.
The total number of partners at three of the major firms' UK branches has also dropped, according to a Business Insider analysis of publicly available data.
In 2024, 124 partners left PwC, more than in the previous two years combined. EY's partner total dropped by 43 in 2024, while KPMG marked at least its third consecutive year of declines in partner numbers.
Deloitte UK increased its total partner numbers by 6 in 2024, but that was a slowdown compared to the previous two years, when the firm added a total of 69 partners.
Paul Webster, a former EY employee now a managing partner at the senior talent recruitment firm, Page Executive, told BI the departures mark a significant change in the partnership model compared to 10 or 20 years ago.
"It was basically once you got to partner, you had a job for life. It was very rare that partners would get laid off," Webster said.
Alan Paton, who until recently was a partner in PwC's financial services division, told BI that partners are being encouraged to retire amid the tight market conditions.
"Either partners get paid less, or there are less partners. Typically, partners don't want to get paid less," he said.
Paton, now CEO of Qodea, a consultancy specializing in Google Cloud solutions, believes that the pressure to retire will continue to increase, and this pattern will become the norm over the next three years. Partnership at the Big Four has become "a club that you can't get into anymore," he said.
The rise of non-equity partners
As more partners retire, fewer are filling the ranks to replace them. Instead, the next generation of senior professionals is being held back in the role of non-equity partner, meaning they receive a salary rather than profit-sharing status.
James O'Dowd, founder of the global executive recruiter Patrick Morgan, which specializes in senior partner hiring and industry analysis, told Business Insider that non-equity partner roles have become more prevalent over recent years and have picked up as the market slowed down.
"From the partners' perspective, if they continue to admit more equity partners, that dilutes the profit pool, and therefore, they make less money," said O'Dowd. Instead, firms are using the non-equity title as "a stopgap" that allows them to give out the partner title but not share the profits per the traditional partnership model, he said.
There's a lot of frustration among non-equity partners as they see their path to partnership get further away, O'Dowd added. Whereas 20 years ago, Big Four employees could make equity partner by around 35 years old, now they're probably looking at their early forties, he said.
PwC, which does not have a non-equity partner status, has introduced a "managing director" grade, which comes into effect on July 1 this year.
O'Dowd said the role would ease the pressure on "what was a very burgeoning director grade where they couldn't afford to make them an equity partner," said O'Dowd.
A PwC spokesperson told BI that the new role reflects the firm's commitment to adapting to the evolving business landscape.
"Our new MD grade offers our senior, high-performing staff an alternative to partnership. The role will help us provide more diverse career opportunities, ensuring we attract and retain the very best talent."
Younger professionals are less motivated to make partner
The shake-ups to the partnership model are changing how junior employees view the executive role, Wesbter and O'Dowd told BI.
O'Dowd said that the prestige of being a partner in a major firm isn't what it was 10 years ago.
Younger professionals are less motivated by the title and more interested in meritocratic compensation models, O'Dowd said.
"The problem with the partnership is that it's not inherently meritocratic. The profits are distributed often based on tenure and perceived contribution. What you're seeing now in the market are lots of alternatives to the bigger firms that pay a wage that's much more closely correlated to performance," he said.
Webster added that there are also concerns about the partnership model's risk-sharing nature after a series of major auditing scandals and subsequent regulatory fines.
Webster said his sister, a PwC partner in Australia, has seen her bonus get "absolutely crushed" in the fallout from the firm's 2024 tax scandal involving work with the Australian government.
But Paton, the former PwC partner, disagreed with the notion that juniors aren't looking to become partners.
Paton told BI that it is still "super aspirational" to be a partner at a Big Four firm and is viewed as a "tremendously prestigious job to have."
However, he acknowledged that, while aspirational, the role is no longer as achievable. Partner status is likely to be changed further by the impact of AI on professional services, he added.
"I think people realize that, even if that's something they aspire to, it may be something that won't actually exist in the future."
KPMG, EY, and Deloitte did not respond to BI's requests for comment.