{ "media_type": "text", "post_content": "Is the First Year partner cash flow issue referenced in recent threads only a B4 dynamic? What about at MBB or OW / Kearney?", "post_id": "5f74c8243d42da0020b29d08", "reply_count": 12, "vote_count": 2, "bowl_id": "5c133802e4f35d0012ad759f", "bowl_name": "Partners Only" }

Is the First Year partner cash flow issue referenced in recent threads only a B4 dynamic? What about at MBB or OW / Kearney?

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I’m at none of the above. At ZS, most people take out a loan to purchase equity. If you just subtract equity cost from annual comp, first year as a partner yields less cash in than the year before. But comp minus loan payments is better, so you can set up cash flow to be better. The other difference vs B4 (and I’m sure this is true at the referenced companies too) is that comp grows quite fast as a partner. So while cash flow is a multi-year problem for many at B4 as I understand it, it’s like a first year only thing at worst in places with more rapid partner comp growth.

Doesn’t happen at BCG you get a very low interest loan to buy in and your cash comp goes up Y1. You might have a slight timing issue because of when bonuses are paid but the effect would be minimal especially assuming you don’t pre spend your bonuses and live off your base.

Facing it this year and it was explained to me a “noblesse oblige” (though I don’t understand why that should come from a new MDP promote and not the whole MDP group at large)

This used to be an issue at PwC but not anymore. Few years ago, we changed the we get our tax payments and monthly distributions. When I was admitted into Partnership 4 years ago, my monthly income went up by at least 30% from the year before (after equity loan payment, life insurance etc.) Only caveat is that I don’t pay for health benefits because I am covered through my spouse’s health insurance plan. Important thing is to save quarterly tax distributions (any additional amount after paying tax installments) because you may need it for the following year April payment. Things change rapidly in the second and third year.

Not an issue at OW. There’s no buy-in, more of an earn-in

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