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EY partner here but it’s the same in all B4.
It is not a decision you make on your own. 95% of the time, people see you as one or the other; if they’re not certain, it’s most likely you will offered MD. So you really only have that choice of people think you’re are a partner candidate. I will also share that in my opinion, 90% of the time that evaluation is correct. Out of that 10% it almost always PP who should have been MDs, not the other way around.
In terms of differences, the important thing to understand that both are excellent choices. So this is not ice cream vs poop, it’s ice cream vs gelato.
Generally speaking (and there are always exceptions):
1. Responsibilities - partners have broader and bigger responsibilities with higher goals. Most, not all, MDs are delivery focused and have smaller goals. Don’t confuse smaller with low btw.
2. Risk - higher risk due to higher expectations and equity. Eg most of us had to pay in this year. MDs are salaried so no such risk.
3. Comp - all else equal, partners make more over the same period of time. However there are important things to consider that may equalize or sway this:
a. Partners have a required retirement age of 60.
b. Taxes are a bitch because we are a partnership, so cash take may not be all that different in some cases.
c. Benefits - we have to pay for many of ours and not eligible for many benefits all together. Not a big $ difference but some impact.
I would encourage you to do three things:
1. Pay attention to the best partners and MDs and use them as your guide for which one you want. Don’t use the low ones as a benchmark.
2. Have transparent conversations with your leadership, including practice, region, service line, sector and account about your career. It is important to understand perspectives beyond just your direct leadership because others have to speak for you as well. In fact there’s only one spot on your form for your leader; all others are partners outside of your group for the most last. Pay attention - you will hear how they see you. Don’t be defensive.
3. Look at your professional as personal aspirations and expectations. Make sure they match the path you want.
By the way, this is for home grown candidates. Direct admits have slightly different rules as many are hired as MDs and later converted to PPs if certain goals are met.
D3 - both ranks have a pension (good) but the structure and value are very different.
PP used to have a very lucrative scheme based on final comp (averaged over final 3 years) and a function of how many years at PP. many partners retire at $400k pension (the cap)
That changed a few years ago - now the firm puts straight $$ into a fund and you get what’s in there (plus interest) when you retire at 60.
MDs have a combo pension - part A & B. It’s based on salary and tenure.
Net - works out to be 1/4 to 1/3 of the PP pension scheme.
It’s not your choice.
Don’t people have to become MD (non-equity) before they can become a Partner (equity)? I don’t think people have a choice on this, unless they don’t want to move up...?
PPMD applies to all of the Big 4, just equity vs non-equity
Difference is at K, you have to be a MD before Partner, however, not all MDs will make Partner, or want to, in some cases
Coach
P1 - excellent response ! P2 - the point on extreme politics is spot on - and unfortunately often serves as a prime reason to have some very talented people move to competition .
From a candidate’s point of view - you need a stable support system of senior partners from the time you are a manager to make a smooth transition to Partner . When you are an SC or M , you can impress partners with high quality delivery . Once someone senior takes you under their wings , they pretty much guarantee you have numbers for your SM tenure and they will help get you networked . The later a candidate tries to do all this - the higher the chance they will end up as an MD even if equally good enough to make a Partner .