Adding a junior partner
I have been a sole practitioner for over 20 years, and am looking to add a junior partner...thinking about business transition down the pike. Branch manager at MSSB has approached me about adding a new recruit as a partner (second career hire, great network, has licenses...was a trader who relocated back to hometown with wife).
My question, how do you work splits/salary/comp etc. Obviously this is not a 50/50 relationship, but I am hoping to find someone (whether this fellow or someone else) that I can eventually transition the business to. If he brings in a large new account, I don't want to take the wind out of his sails if the split is unfair, however I am producing about 750K. Should I give him a portion of the book to start @100MM, and what sounds reasonable?
Thanks for any insights!
Not an easy question to answer without more insight. If you are trying to accomplish a transition, what is it worth to you to bring somebody in that you can trust to service your clients and help maintian and grow your book during transition. I was brought into the a firm as a Junior Ptr 10 years ago. My senior most partner is still around but is now not responsible for anything other than client contact on his schedule. He gets paid a good wage but can come and goes as he pleases. Although he still works very hard he does not have to. In the mean time we grew our book about 100% from when I got here. So all sides are doing well. He had to pay more up front, but he will also remain on the "payroll" at a good wage as long as he wants. His will get a very good return on his investment. Also worked for me as I stepped into a very reputable group that made it easy to grow.
You have to decide what you are looking for, define what it worth to you then find the person that fits it. I do not suggest you work backwards on this, hiring a guy just because he is there and hope he is your transition answer.