The Professional Services Ownership Dilemma: Partnership, Private Equity, or Something Else Entirely

Professional services firms worldwide are reconsidering ownership structures that have defined their industries for over a century.

Partnership models built today’s leading law firms, accounting practices, consultancies, and advisory businesses through shared ownership, collective decision-making, and profit distribution among senior professionals. These structures created global brands synonymous with professional excellence and client service. Yet since 2021, private equity firms have bought stakes in eleven of the top 30 U.S. accounting firms, while law firms in jurisdictions permitting external ownership are exploring similar paths. 

The scale and velocity of change continues accelerating. Grant Thornton UK completed a £1.5 billion transaction with Cinven in April 2025. Grant Thornton US took New Mountain Capital’s investment and within months merged with Grant Thornton Ireland, creating a 12,000-person multinational platform. Secondary transactions now follow initial investments, as Blackstone’s acquisition of Citrin Cooperman from New Mountain Capital for over $2 billion demonstrates. Meanwhile, firms including PwC, Deloitte, and elite law partnerships maintain traditional structures while investing billions through existing profit pools. 

This divergence reflects competing assessments of market requirements and organizational priorities rather than universal truths about optimal ownership. Some view external capital as essential for competing in markets increasingly dominated by technology-enabled services and global scale. Others argue that partnership structures provide the independence and long-term perspective necessary for professional excellence. 

Arguments for External Investment

Professional services firms pursuing private equity investment identify structural challenges that traditional partnerships struggle to address within acceptable timeframes. 

Capital Requirements Exceed Internal Generation

Modern professional services require investments in technology infrastructure, process automation, and analytical capabilities that strain partnership economics. Corporate clients expect their advisors to provide predictive analytics, automated document processing, and real-time reporting as standard offerings. BCG research indicates that 30% of finance executives expect AI and generative AI to deliver value by the end of 2025. These executives also engage law firms, accountants, and consultants who must match their technological expectations. 

Building these capabilities requires capital deployment measured in hundreds of millions. Cloud infrastructure, software licensing, system integration, cybersecurity protocols, and talent development all demand upfront investment with uncertain returns. Partnership structures typically fund such investments through retained earnings, spreading costs across multiple fiscal periods. This gradualist approach may prove inadequate when competitors with external backing can deploy capital immediately. Grant Thornton UK stated that external investment allows them to “invest in talent and technologies” to provide enhanced client experiences. 

The mathematics become particularly challenging for mid-sized firms. Market leaders generate sufficient profits to fund investments internally, while smaller practices may operate below the scale where such investments make economic sense. Firms caught between these extremes face difficult choices: accept external investment, merge with larger practices, or risk gradual market share erosion. 

Competition for Professional Talent Intensifies

Professional services firms compete for employees who combine traditional expertise with contemporary skills in data analysis, project management, and client engagement. Koltin Consulting Group observes that PE-backed firms like EisnerAmper and Citrin Cooperman compete successfully against the largest firms for talent, “winning more than they’re losing” in their first year following investment. 

Grant Thornton UK partners received average payouts of £682,000 following completion of the Cinven transaction in 2025. Such immediate compensation exceeds what partnerships can offer through gradual equity accumulation over decades. Beyond monetary considerations, PE-backed firms provide career opportunities that partnerships cannot match: exposure to portfolio company boards, merger and acquisition experience, and equity participation at multiple organizational levels. 

Research from Carta shows that PE-backed corporations allocate median initial equity grants of approximately 2.6% to new CEOs, while PE-backed LLCs allocate approximately 2.2%. Younger professionals evaluating career options increasingly favor immediate equity participation over promises of eventual partnership admission. This preference forces firms to reconsider compensation structures that have remained largely unchanged for generations. 

Consolidation Through Acquisition

PE-backed firms execute acquisitions immediately while partnerships must accumulate capital over years. Cherry Bekaert’s analysis indicates that add-on acquisitions accounted for 74% of all U.S. private equity deals in 2024, with professional services seeing significant consolidation activity. 

Each acquisition brings client relationships, geographic coverage, and specialized expertise while providing acquired firms with access to enhanced resources and career opportunities. The compounding effect creates market leaders with pricing power, operational efficiency, and talent attraction capabilities that standalone partnerships cannot replicate. Partnerships observing this consolidation face uncomfortable realities: they may become acquisition targets rather than acquirers if current trends continue. 

Geographic expansion through acquisition proves particularly challenging for partnerships. Cross-border transactions require significant capital deployment with extended payback periods. PE-backed firms can execute international expansion strategies that partnerships might debate for years without resolution. Grant Thornton US’s acquisition of member firms in the UAE, Luxembourg, and the Cayman Islands exemplifies this rapid international consolidation capability. 

The Partnership Perspective

Leading professional services firms maintaining partnership structures articulate compelling reasons for resisting external investment. 

Independence Preserves Professional Standards

Partnerships emphasize that external investors introduce potential conflicts between profitability and professional responsibility. Law firms must maintain attorney-client privilege, accounting firms require auditor independence, and consultants need objective advisory relationships. The UK’s Financial Reporting Council reviewed the Cinven/Grant Thornton transaction to ensure audit independence remained intact. 

Grant Thornton’s structure requires separate entities for regulatory compliance: Grant Thornton LLP provides attest services while Grant Thornton Advisors LLC handles business advisory and non-attest services. This structural complexity creates coordination challenges, potential conflicts, and operational inefficiencies that unified partnerships avoid. 

Additionally, partners value autonomy to reject engagements that conflict with firm values or professional standards. External investors focused on financial returns might pressure firms to accept questionable clients or aggressive positions that partnerships would decline. Client selection, engagement terms, and risk tolerance all become subject to investor influence rather than partner consensus. 

Time Horizons and Relationship Building

Private equity firms typically target five-to-seven-year investment horizons, seeking exits through sales or public offerings. McKinsey research indicates that PE portfolio executives operate in environments where “capital clocks at 20 to 25 percent a year, and every month of delay burns returns.” This urgency conflicts with relationship-based business development that characterizes professional services success. 

Client relationships in professional services often span decades, built through consistent service delivery and institutional knowledge accumulation. Partnership structures enable long-term thinking that prioritizes relationship depth over transaction volume. Some clients specifically select firms based on ownership stability, viewing external investment as introducing unwanted uncertainty. 

AlixPartners research found that 58% of private equity CEOs are replaced within the first two years of acquisition. Such turnover rates would destabilize professional services firms where personal relationships drive client retention. Partners who built practices over decades may find themselves replaced by executives focused on financial metrics rather than client service. 

Internal Funding Remains Viable

Several prominent firms prove that partnerships can fund technology investments without external capital. Kirkland & Ellis reported $8.8 billion in revenue with profits per equity partner of $9.25 million, while Latham & Watkins reached $7 billion revenue with profits per equity partner of $7.1 million in 2024. Both firms fund extensive technology initiatives through internal resources. 

The Big Four accounting firms invest billions annually in technology while maintaining partnership structures in most markets. These firms argue that disciplined financial management, selective growth, and strategic focus enable partnerships to compete without external capital. They view PE investment as unnecessary dilution of partner economics and organizational culture. 

Some partnerships have created internal innovation funds, technology subsidiaries, and venture investment arms that provide capital flexibility while maintaining control. These structures enable experimentation and investment without surrendering ownership or accepting external oversight. 

Market Context Shapes Ownership Decisions

The division between PE-backed and partnership firms reflects varying assessments of market conditions rather than universal prescriptions for success. 

Geographic and Regulatory Variations

Investment patterns differ markedly across jurisdictions. UK law firms have accepted external investment since the Legal Services Act of 2011, with four firms now publicly listed on the London Stock Exchange. Arizona and Utah permit non-lawyer ownership of law firms, creating experimental environments for alternative business structures. 

Burford Capital is exploring purchasing minority stakes in several U.S. law firms, positioning itself as a “patient, permanent investor” rather than seeking quick exits. This development signals potential disruption from litigation finance companies entering the ownership arena alongside traditional private equity, offering law firms additional capital sources with potentially different investment horizons. 

These jurisdictional differences extend beyond law to encompass accounting, consulting, and other professional services. European markets remain highly active in professional services PE investment, with deals like Cinven’s acquisition of Grant Thornton UK demonstrating continued appetite for such transactions. Asian, Latin American, and African markets remain less penetrated by private equity in professional services, suggesting future expansion opportunities as regulatory frameworks evolve and firms seek growth capital. 

Most U.S. states prohibit non-lawyer ownership of law firms, forcing firms to choose between geographic limitations and ownership flexibility. Accounting firms face fewer ownership restrictions but must comply with independence rules that vary by jurisdiction. Consulting firms encounter the fewest regulatory barriers but still must consider client preferences and competitive positioning. 

Sector-Specific Considerations

Different professional services sectors face distinct pressures influencing ownership decisions. Accounting firms confronting automation of routine audit procedures may require external capital more urgently than law firms handling complex litigation. Consulting firms competing with technology companies for digital projects might need different capital structures than wealth management practices serving individual clients. 

EY’s analysis shows that private equity deal count climbed 17% in the first half of 2025 versus the same period in 2024, with deal value growing more than 40%. Technology-focused practices attracted more investment than traditional service providers. Firms with recurring revenue models proved more attractive to investors than those dependent on project-based engagements. 

The pace of investment continues to accelerate. CPA Trendlines Research tracking shows over 53 significant PE-related transactions in the accounting sector from 2020 through mid-2025, with projections suggesting over half of the top 30 U.S. accounting firms will have PE ownership by the end of 2025. This represents a complete restructuring of the profession in less than five years. 

Client Expectations Drive Structural Choices

Client preferences increasingly influence ownership decisions. Private equity firms often prefer engaging other PE-backed professional services providers, viewing shared ownership structures as alignment of interests.  

Government clients, regulated industries, and conservative corporations may prefer traditional partnerships, viewing them as more stable and less conflicted.  

Consequently, firms must assess their target client base when evaluating ownership structures. A practice serving technology startups might benefit from PE backing, while one serving government agencies might find partnership structures advantageous. 

Multinational corporations increasingly expect global service delivery, technology-enabled processes, and integrated solutions that require scale and resources. These expectations favor larger, well-capitalized firms regardless of ownership structure. Smaller practices must either specialize in niche services or accept consolidation into larger platforms. 

Alternative Structures and Hybrid Models

Rather than choosing between pure partnership and full PE ownership, some firms create intermediate structures that blend elements of both approaches. 

Minority Investments and Strategic Partnerships

Several firms have accepted minority PE stakes that provide capital while maintaining partner control. Sikich secured a $250 million minority investment from Bain Capital, while Armanino accepted a minority investment from Further Global Capital Management. These structures provide growth capital and liquidity for retiring partners while preserving partnership culture and autonomy. 

Inflexion made a strategic investment in Baker Tilly Netherlands in January 2025, exemplifying the global nature of these transactions. European firms have pioneered hybrid models that balance external capital with professional independence. Asian markets are beginning to explore similar structures as regulatory frameworks permit. 

Employee Ownership and Alternative Capital

BDO USA established an Employee Stock Ownership Plan (ESOP) in August 2023, making it the first large public accounting firm to implement such a structure, backed by $1.3 billion in debt financing from Apollo Global Management. This provides equity participation while avoiding external investors. KKR portfolio companies have awarded billions of dollars in equity value to over 60,000 non-senior management employees since 2011, with programs spanning North America, Europe, and Asia. 

Employee ownership structures vary significantly by jurisdiction. European models often emphasize cooperative ownership and worker participation in governance. Asian approaches frequently combine employee shareholding with traditional hierarchical management structures. Latin American markets are beginning to explore employee ownership as an alternative to both partnership and PE models. 

Revenue-sharing agreements, joint ventures with technology companies, and strategic alliances provide resources without ownership changes. Some firms create captive insurance companies, lending subsidiaries, or investment vehicles that generate capital while maintaining partnership control. These creative structures require legal and financial engineering but may provide optimal solutions for specific circumstances. 

Strategic Considerations for Ownership Decisions

Professional services firms evaluating ownership structures should consider multiple factors before committing to particular models: 

• Client base composition: Government contractors and regulated industry advisors may find partnership structures advantageous, while firms serving PE-backed companies might benefit from similar ownership 
• Capital requirements: Immediate needs for hundreds of millions in investment may necessitate external funding, while incremental technology adoption might permit internal financing 
• Talent strategy: Firms requiring immediate equity participation and exceptional compensation to attract talent may need PE backing, while those relying on prestige and culture might sustain partnerships 
• Market position: Leaders generating sufficient internal capital may maintain independence, while subscale firms might require external investment for viability 
• Geographic ambitions: International expansion plans may favor PE-backed structures with acquisition capabilities, while regional practices might succeed as partnerships 
• Regulatory environment: Jurisdictions permitting external ownership offer more flexibility, while restrictive markets may dictate traditional structures 
• Exit planning: Partners approaching retirement may prefer PE liquidity events, while younger leadership might favor long-term partnership models 
• Risk tolerance: Conservative firms may prefer partnership stability, while growth-oriented practices might accept PE-related uncertainties 

Future Trajectories for Professional Services Ownership

The professional services industry continues experiencing ownership model experimentation without clear convergence toward universal solutions. Neither pure partnership nor complete PE ownership has proven definitively superior across all contexts. Market conditions, regulatory frameworks, and competitive pressures continue shifting in ways that affect optimal ownership structures. 

The proliferation of hybrid models suggests that binary choices between partnership and PE ownership may prove unnecessarily limiting. Minority investments, employee ownership plans, strategic alliances, and creative capital structures all provide alternatives to traditional models. Firms willing to experiment with novel structures may discover solutions for their specific circumstances. 

Regulatory changes will also influence future ownership patterns. Jurisdictions currently restricting external investment may liberalize rules to enhance competitiveness, while others might impose new restrictions to preserve professional independence. Technology advancement may render some regulations obsolete while creating needs for new oversight frameworks. 

Client expectations will ultimately determine which ownership models succeed, however. If clients prioritize technology-enabled services and global scale, PE-backed consolidation may dominate. If they value relationship continuity and professional independence, partnerships may endure. Most likely, different client segments will support various ownership models, enabling continued diversity in professional services structures. 

Implications for Executive Leadership

The ownership decisions facing professional services firms require leaders with skills rarely developed through traditional career paths. PE-backed firms need executives who can deliver investor returns while preserving the client relationships and professional standards that define these businesses. Partnership firms need leaders who can secure buy-in for major investments and compete for talent without the capital advantages of PE-backed rivals. Both models demand executives comfortable managing conflicting priorities: balancing investor expectations against professional independence or partner consensus against market speed. 

Stanton Chase works with professional services firms across the ownership spectrum. We place leaders at firms taking their first PE investment, those managing secondary buyouts, and partnerships determined to remain independent. Our consultants understand the specific challenges each model presents because we see them play out across our global network. We know which executives have successfully managed similar transitions, where to find leaders who can modernize operations without external capital, and how ownership structures affect the talent needed at every level. Most importantly, we help firms identify leaders who can manage today’s ownership complexities while building organizations capable of serving clients through whatever changes tomorrow brings. 

About the Authors

Dr. Oliver Ziehm is a Partner at Stanton Chase Düsseldorf with over 20 years of experience in consulting. He’s also the Global Sector Leader for Technology and Professional Services. Prior to joining Stanton Chase, he worked at Kienbaum, PriceWaterhouseCoopers, IBM and CSC, where he built a vast international network in IT and consulting. Dr. Ziehm is considered a trusted advisor in these industries and has a deep understanding of current and future trends.  

Dr. Ziehm completed his studies in business administration at Cologne University, HEC Hautes Etudes Commerciales in Paris, and Wroclaw University of Economics in Poland. He has a Ph.D. in Business from Breslau University and is also a certified business coach. 

Thomas Hauk is a Partner at Stanton Chase Stuttgart, where he focuses on the Financial Services and Industrial practice groups. He brings 27 years of management experience in leading banking organizations before moving into executive search. 

Passionate about connecting the right leaders with the right opportunities, Thomas partners closely with clients and candidates to build long-term solutions. His goal is simple: exceed client expectations by delivering sustainable leadership impact. He studied business economics with a focus on controlling in Karlsruhe.