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|Friday, September 01, 2006|
Sarah joined her firm shortly after graduating from law school. Her commitment to the company generates a good income and has enabled her to develop her practice specialty. She and her husband have been married for two years and last year became first-time homeowners.
Sarah was elated to learn she was being considered for partnership at her company. She needed a loan for the partnership investment and looked to her bank branch for financing. The banker took some basic information and gave Sarah three options: a home equity line of credit, mortgage refinancing or a personal loan. Given that the couple’s recent home purchase required 95% financing, there was little home equity as yet. Sarah had roughly $100,000 in student loans still outstanding. The amount of the personal loan being offered was only half the figure she needed for the partnership investment. Her excitement over partnership turned to apprehension. She needed guidance.
Sarah’s situation is not unique: Motivated professionals who aspire to firm partnership may also face competing demands on their finances. One of these demands is the rising cost of higher education, which leaves many professionals with a big debt and long-term repayments. Add to this the cost of financing a partner investment, and it may seem overwhelming. But up-front financial and career planning can make considering that partnership opportunity less daunting if you keep three things in consideration:
Professional development: Many firms encourage their associates to become involved with networking opportunities and to expand their circle of influence and general business knowledge. In addition, most professions require continuing education in order to maintain credentials or license. Associates who successfully balance workload, continuing education and networking are typically the first to be offered partnership.
Planning ahead for the financial obligation: For young professionals, repaying student loans is often top-of-mind, given the national average for aggregate student loans after four years of college is $42,000, according to SallieMae. Graduate students specializing in a professional service can hold an average of $70,000-$120,000 in student debt.
Though firms vary, the opportunity for ownership often comes after seven to 10 years of experience. This is an age that can coincide with the expense of a new family or household and at a time when candidates have significant earnings potential, yet still a modest net worth.
At a mid-sized firm, expect the financial commitment to range between $20,000-$35,000 for equity partner. Begin planning with a financial partner at least two to three years before pursuing partnership. This smoothes the way for the firm’s partnership review or application process.
Developing relationships with key advisers: Request advice from a mentor or firm partner and indicate the goal of future ownership. A firm’s managing partner might request a financial plan. Consider using an existing firm partner or an informed outside adviser to gain more information about a financial plan and to assist in developing a strong case for partnership acquisition.
The best source of financing is likely to be the one who has working knowledge of the firm. Knowing the firm’s level of income, ability to make partner distributions and, most importantly, to what degree the partnership investment will change your new income makes it far easier to structure the right financing for those considering a partnership opportunity.
Wednesday, October 22, 2014
BY KIM MOORE
A conversation with Majd El-Azma, president and CEO of LifeWise Health Plan of Oregon, followed by the Healthcare Powerlist.
Wednesday, October 22, 2014
BY JOE ROJAS-BURKE & KIM MOORE
Oregon Business reports on the visa squeeze, the skills gap and foreign-born residents who are revitalizing rural Oregon.
Tuesday, December 09, 2014
BY LINDA BAKER
On the eve of the Portland Ad Federation's Rosey Awards, Matt Anderson, CEO of Struck, talks about the transition from creative director to CEO, the Portland talent pool and whether data is the new black in the creative services sector.
Monday, November 10, 2014
BY KIM MOORE | OB RESEARCH EDITOR
A market for low-carbon transportation fuels has a chance to flourish in Oregon if regulators adopt the second phase of the state’s Clean Fuels Program.
Thursday, December 11, 2014
There’s a fascinating article in the December issue of the Harvard Business Review about a profound power shift taking place in business and society. It’s a long read, but the gist revolves around the tension between “old power” and “new power” as a driver of transformation. Here’s an excerpt:
The authors, Henry Timms and Jeremy Heimans, don’t necessarily favor one form of power over another but merely outline how power is transitioning, and how companies can take advantage of these changes to strengthen their positions in the marketplace.
Our Powerbook issue might be viewed as a case study in the new-power transition. This annual book of lists provides information on leading businesses, nonprofits and universities in the state. Most of the featured companies are entrenched power players now pursuing more flexible and less hierarchical approaches to doing business. Law firms, for example, are adopting new technologies and fee structures to make legal services more accessible and affordable.
This month we also take a look at a controversial new U.S. Securities and Exchange Commission rule requiring public companies to disclose the median pay of workers, as well as the ratio between CEO and median-worker pay.
Part of the 2010 Dodd-Frank financial reform law, the rule will compel public companies to be more open about employee compensation, with the assumption that greater transparency will improve corporate performance and, perhaps, help address one of the major challenges of our time: income inequality.
New power is not only about strategy and tactics, the Harvard Business Review authors say. “The ultimate questions are ethical. The big question is whether new power can genuinely serve the common good and confront society’s most intractable problems.”
That sounds like a call to arms. Or a New Year’s resolution. Old power or new, the goals are the same: to be a force for positive change in the world. Happy 2015!
Wednesday, October 22, 2014
Peter Lizotte at ACME Business Solutions and Roger Busse at Pacific Continental Bank share their favorite reads.
Saturday, December 13, 2014
A look-in on the life of Norris & Stevens' president.
|A Complex Portrait: Immigration, Jobs and the Economy|
|Woman of Steel|
|Kill the Meeting|
|Obama to announce end of Cuba isolation|
|Energy prices drop cost of living in US by most since 2008|
|Russia's attempt to slow ruble freefall fails|
|AAA: Holiday travel could set record this year|
|Sub-$2 gas prevalent across US|
|Group buys PetSmart for $8.3B|
|Oil prices could continue to plummet|
Is your business ready to join us in the call for action? This opening panel includes Oregon businesses who will discuss why they signed the Oregon Climate Declaration, the investments they are making to reduce carbon emissions, and how their actions are affecting their companies.
Get ready for two days of special events produced with the EPA, Portland Timbers and ISOS before and after the GoGreen Conference on October 16.
How sports tourism is driving economic growth and making cities across Oregon a better place to live.
Port of Morrow's business-ready attitude has a surprising global impact.
Through its support of the arts, the Cultural Trust is strengthening the business community.
Heed the morals of these seminal holiday stories in your everyday life.
Amy will practice in the firm's Business, Real Estate, and Tax practice groups.
While the Bend City Council ultimately upheld the approval which enables OSU-Cascades to move forward with the 10 acre site, it did also thoughtfully consider the nature of its code requirements, resident concerns and OSU-Cascade’s efforts and suggestions and crafted conditions of approval to address potential impacts of the site in the area.