One of the earliest tests of your career is to learn the hierarchy of public accounting firms. Even interns are expected to quickly figure out the ranking system and assume their place in it. In addition to ranking the roles in the accounting firm from most prestigious to least, we also provide you with valuable insight on the typical personality quirks at each level.
Your experiences may vary.
Partners and Principals – The partners and principals are owners of the accounting firm. The difference between the two is usually that Partners hold the CPA credential, while Principals do not. There is an entirely separate hierarchy within the partner and principal realm that we will cover in Advanced Knowing Your Place.
Partners and principals typically own a number of units in the firm, similar to stock in a public company, which entitles them to the profits produced by the firm, provided it is profitable. If the accounting firm is not profitable, the partners assume the losses by laying off half the Recruiting and HR departments and maintaining their draw.
Your average accounting partner or principal is a white man in his 40s or 50s. In reality, partners come in all shapes, sizes, and personalities. Most partners are good at selling, good at traveling, and married with 2.4 children. They’re often working towards a divorce or recovering from their most recent one. Partners and principals typically have a hard time “turning off.” Even on vacation, they read emails, answer work calls, and think about work. The pay for this dedication to work is immense. Most public accounting firm partners and principals would consider it a thin year if they only earned $300,000 to $400,000. Big 4 partners and principals with large books of business in lucrative fields can expect to clear $1 million in good years, in conjunction with a slew of other benefits. If you can stand the grind, you can build real wealth very quickly as a partner or principal, especially if you manage to avoid alimony payments.
Director, Managing Director, Signing Director, etc. – Along with partners, most accounting firms will have directors, managing directors, and other similarly prestigious ranks as partners or principals. Typically, directors do not own units of the accounting firm, but they do receive a significant salary, and they do assume some risks of the firm. Sales goals and other KPIs for directors may not be as ambitious as those for partners, allowing for better work-life balance. Directors at larger public accounting firms can usually expect to make between $225,000 – $500,000 per year.
Interns – You didn’t expect the lowly intern to reside in the third-most prestigious spot, did you? Because public accounting firms rely on a new crop of recruits each year, interns hold outsize influence relative to their puny frames and tinny voices. The Recruiting department spends roughly 85% of its annual budget wooing interns, with the remaining 25% going towards experienced hires.+
Unlike partners, interns do not come in a variety of shapes, sizes, and capabilities. They are generally clueless, usually excited, and always effervescent. Their primary purpose is to give the full-time employees an excuse to buy food and drinks with the corporate credit card. A good intern will recognize this and encourage as many happy hours, outings, and team-building exercises as possible. They will often receive the doting attention of partners and senior team members because their dad is the CFO at a client. For associates and senior associates, an intern is a valuable ally high up in the hierarchy. And because interns are clueless, even a shrewd associate can learn how to take advantage of them. Make sure you know how to use the company charge card* before the intern arrives and be prepared to receive reimbursement from your rich Uncle Partner for your “recruiting costs.” And for the love of Luca Pacioli, if you find a good intern, you make sure they come back to work full-time. Interns who convert into competent associates are worth their weight in gold. Or maybe silver? Definitely more than scrap copper at least.
Senior Managers, Assistant Directors, etc. – Here be desperate men. The senior manager level exists in an odd state of limbo. Very few people aspire to remain a senior manager for long because being a director or partner is much more lucrative. But if a manager does well – or in some cases simply exists long enough – they will become a senior manager via accountancy transmogrification. Senior managers are typically expected to maintain an existing book of business and sell more business, all while being held to similar KPIs as managers. The money is decent, with senior managers at large public accounting firms typically earning between $125,000 and $250,000, but the benefits are substantially less than those extended to partners, directors, and interns.
If you come from a large family, you can imagine the senior manager as your eldest sibling. They’re usually very bright, fairly serious, responsible, disciplined, and more than a little overextended. They’re not scary because they’re still “one of the kids,” but you respect them because they disdain your cheeky antics. Senior managers usually make great mentors because they’ve been in the system for a long time, and they’re just jaded enough to not always parrot the company lines.
Managers – Managers are usually the highest-ranking team member an associate will interact with on a daily basis. On smaller teams, associates may work directly with partners and senior managers, but in larger organizations, the manager is responsible for associates’ training, development, and performance. They are also expected to manage engagements from start to finish, manage client relationships, manage their subordinates, and manage engagement economics. A good manager is a jack of all trades and is also friends with a master of each.
Senior associates may transform into managers simply by existing for a number of years, but typically managers are promoted on merit. For an associate, a good manager can be the difference between a mediocre, unfulfilling career and a successful one.
Managers are typically younger than you feel they should be. They are usually organized, friendly, and tired. They know a little about a lot, and they know who to ask when they’re not certain. If you can convince them to not immediately go home to their family in the suburbs with a fenced yard, a dog, and 1.2 children, they are a blast at happy hours. Respect your managers, they’re doing their best.
Senior Associates – The senior associate is the workhorse of the public accounting team, evoking Boxer from Animal Farm. They are expected to be technically sound enough to manage small engagements from beginning to end, or to handle significant pieces of larger engagements. Senior associates are responsible for many tasks. A good senior associate will develop enough knowledge, trust, and autonomy to handle most of the nuisance work of the engagement. These tasks include performing the work, reviewing the work, tracking the work, and delivering news about delayed work to the client. Contrary to the belief of senior associates themselves, they are not infallible. In most cases, all that is needed to promote an associate to senior associate is two to three years of competent work and a personality. You don’t even need a good personality, you just have to have one.
Your typical senior associate is one of two people. The first type is clearly on the manager track. They work hard, learn quickly, and have entirely too much confidence in their abilities. This is your overachieving type, and they make up about 15% of your seniors. The best ones will be cheery but always seem a little frazzled.
The remaining 85% of senior associates are usually competent but experiencing some degree of crisis. Most of them are embarking on a significant life change like getting married, buying a house, or having a child/dog/side hustle. Others may simply be experiencing burnout for the first time. At any rate, these seniors may be distracted or disillusioned with their jobs. Attrition is usually heavy among the senior associates, but a good senior associate is a new associate’s best-good friend. Senior associates are eager to share tips and tricks with other teammates. They love a good scratch behind the ears and a sugar cube.
Associates – We have reached rock bottom. Associates are the dregs of the public accounting world, scrapping and clawing for utilization** and attention. They are as numerous as the grains of sand on a beach and half as interesting. A good associate is eager to learn, learns quickly, is easy to get along with, and behaves appropriately within the corporate hierarchy (see Etiquette and Dress Code for details). They may be promoted to senior associate before their peers if they are particularly effective. A bad associate is beneath contempt, but you still generally “coach them out of the firm” (read: “fire them”) over a period of months. The irony of course is that you appreciate the good associates and loathe the bad ones for roughly the same amount of time.
The average associate is cheerfully clueless. They still believe in the generosity of the partners and the firm. Some may even have time for their hobbies, and most can stay out late without turning into shambling corpses at work the next day. Regardless of your place in the hierarchy, if you find an associate with the same last name as a partner, you are obligated to befriend them. This is what we call a “prudent career move.”
+These values verified by Recruiting Coordinator – Southeast Region.
*Please use the company charge card judiciously and according to policy. One of the most common reasons people are fired is due to misuse of the company credit card. You’ll need to understand the terms, who is responsible for paying the card, and how to invoice the company for costs incurred. In many cases, the company credit card is tied to your credit score, so late payments may impact you directly. This is a powerful tool, and if you treat it well, it will treat you well.
**Utilization is a common KPI for associates. It is often calculated as the sum of chargeable hours worked in period, divided by the total expected hours for that same period. If you charge 30 hours to client work in a 40-hour week, your utilization would be 75%.