Partners, why don't you set your own shop? Most of you likely have a great network of clients and enough cash to hire support resources.

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Why would I want to do that? I already basically pocket the profit margin on work I sell, and I get to spread a variety of enterprise risk & overhead across many partners instead of taking it on myself.

Not saying it’s always a bad idea. Some people want to start up their own thing or they want to work in an area their firm chose not to prioritize. But for many of us, we don’t have anything to gain by breaking away.

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I’ve never thought about it to get an estimate. But it’s not all costs. There’s also economies of scale on things like IT and recruitment.

Also, I know there are cheap ways to get things like legal support for an MSA or to chase down invoicing, but when you go out on your own, you’ve gotta spend the time figuring that stuff out too. Right now, that largely happens for me with little personal effort.

I could see wanting to start up something in tech where the payoff can be massive and the work is different. Can’t see leaving an income well into the 7-figures for the chance to do similar stuff “on my own.”

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Not a partner myself but having interacted with individual consultants - another big challenge not listed above is ‘talent’. It’s much, much harder to find good talent to work for your small firm, whereas it’s far easier in an established large shop.

Makes it very difficult to scale the business.

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Yea I think that’s exactly the point. It becomes not worth it. And in society now (as long as you don’t live in a handful of $$ cities) you really don’t need much more than say 800-900k to feel quite rich. You can have the private schools, nice houses, cars, vacations, support family, etc. And we are tenure based so I know my comp will go up until I retire. Plus we have the pension which is nice.

Yea going out on your own is going to make more wealth for you, but it’ll be much more hassle. And obviously comes with more risk (up years/down years).

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The talent issue is the biggest one, and it’s not just about scaling the business, it’s about getting a good team to do the work at all.

In an established firm, there’s a well define path for growth. You spend about X years as an associate and Y years as a manager and here’s what it takes to make partner etc. The staff in big firms like to complain (not saying it’s a bad thing, I did it too) that the process is opaque and arbitrary, but at least they know it exists and what the goalposts are.

How do you hire staff into a firm where you’re the only partner? You can’t promote anyone without growing the firm or having people leave. To get good people you have to pay a lot more, and even then they aren’t going to stay forever. The talent issue makes it really hard to be anything more than a one man shop.

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I did just that, and love it. The challenges listed above by others are true, but I was well aware of them when I made the decision. I think the biggest reason why someone decides to vs not is also personality - there are those who have a founder / owner mindset and those that are happy being an employee / partner in a larger safety net. I felt confined in the structure and politics of my past employers, and took the plunge for my own sanity and goals. I haven’t looked back and I’m content being a smaller shop. End of the day we all have to do what makes us happy and successful.

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Wow you must get paid way more than me or have a much smaller business. No way my comp even comes close to how much I could make on my own. I have thought about starting my own shop many times. But I just don’t want the hassle/risk. But to be sure I could probably make much more.

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If the partners aren’t making the money at your firm, who is?

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One of my earliest mentors told me that the company brand made his job easier and helps him find and land clients and staff.

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All good points here, but I don’t think talent is that huge of a hurdle especially if you can arrange it so that you can do some kind of ownership distribution to staff, bring on junior partners etc. You would have to pay people a bit more, but that shouldn’t be an issue. You could have a network of independents or partnerships with other firms so you can scale as needed. If you can build something up to decent scale, you could position yourself for an exit and end up with a nice payout and retention deal at a strategic buyer. It’s doable.

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“A network of partnerships with other firms”

So... like being a partner in the firm I’m in already?

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Non-compete clauses pose an issue as well. Hard to defend. And that “network” is quite intertwined.

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The less performing partners, the settlements, marketing, real estate, bloat

So you have two different things going on here.

1) Various forms of overhead that take out profits from the firm. Marketing and real estate fit into that. You may be able to run leaner on your own in some of those places. But may have higher overhead in others. Don’t know.

2) Other partners who contribute less and make more. That’s an issue of how profit is allocated, rather than an issue of how much money the firm makes. My own contributions to my firm appear to be roughly in line with how much I earn, so I have no beef with my company on this one. If you’re at a firm where it doesn’t work that way, starting up on your own or finding a different firm could be a lot more appealing than it is for me.

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Because clients pay for our brand and the security that comes with them, not individual people.

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