I'm about ten years into my career and have a goal to become a partner someday. Just curious how others here became a partner/principal?
Did you work hard and become a valuable asset to the firm, then promoted to a principal? Did you have to wait and buy out a retiring principal? Did you just buy into the firm?
I'm sure it all varies by firm and everything is different, I'm just trying to get an idea, do I need to have a big chunk of cash or can I become principal by working hard and being a good architect?
thanks.
Non Sequitur
Jul 10, 18 10:55 am
There is most certainly some sort of financial investment required.
eeayeeayo
Jul 10, 18 10:56 am
In some cases you can buy into the firm gradually, essentially by being bonused a percentage each year over a period of time. In others you'll need the "big chunk of cash". In many cases it's a combo of those two. You'll never just be "promoted" to principal - there needs to be a financial agreement, valuation of the firm, etc. The other option of course is to start your own firm, on your own or with others.
Miles Jaffe
Jul 10, 18 11:25 am
Start your own firm.
tduds
Jul 10, 18 12:05 pm
Either buy-in or generate revenue.
thisisnotmyname
Jul 10, 18 12:13 pm
Having a network of clients who will hire you for projects is usually an important consideration.
I would suggest modifying your dream to: becoming a partner some OR starting your own firm.
Unless you are in an organization with a clearly defined promotion system, the partnership thing can depend on a lot of timing and economic factors that are usually beyond your control.
archi_dude
Jul 10, 18 12:14 pm
When I was younger, I thought I could get rich quick by learning how to trade stocks. Needless to say should have just put my money into a index fund. However, after learning about evaluating a company based on fundamentals, management, product and financials, most architecture firms are literally the worst investment ever and the pyramid scheme of “buying in” is just that in most firms, a pyramid scheme. Unless your talking about an AECOM, I would never put money into a traditional design firm.
Flatfish
Jul 10, 18 12:20 pm
Most firms aren't a true pyramid scheme, as that would require doubling the number of partners in each generation, which quickly becomes untenable. It's more of a Ponzi scheme - the principals aren't multiplied in each generation, they're just replaced, and each generation pays for the one that came before it, and everybody's happy until the returns stop coming in. It's only a bad investment if you end up being the last generation - so if you do buy in, start grooming the youngster who will one day buy you out.
Fivescore
Jul 10, 18 12:35 pm
Some firms have enough partners that they might be pyramid schemes. Years ago before my state let firms have names other than those of the partners, our receptionist had to remember 10 names every time she answered the phone. These days the firm has more than 20 partners.
thisisnotmyname
Jul 10, 18 2:16 pm
A firm in my past had a crew of sad little "partners" with 1 & 2% stakes in the company. The majority partners with 25%+ stakes treated them like dirt.
chigurh
Jul 11, 18 5:37 pm
a AE firm I heard about had a bunch of people buy into his already failing company...2008 hit and the main principle hit the road with the remaining cash and left everybody else with the debt...f-ed over a lot of good people.
whistler
Jul 10, 18 3:07 pm
I agree with the comments above, don't buy into a firm. Be a "rainmaker" and bring in the clients. Once you have a reasonably steady stream of clients that come to you then partner with a really good management partner to "run " the office ( assuming your skill set is better at bringing in clients ) or vice versa, if you are better managing the office side of things find a designer / charismatic type to bring in the clients and open your own shop.
chigurh
Jul 11, 18 5:44 pm
most firms are small, incestuous, one or two person firms and they don't want partners. The flip side is these large corporate firms with 100 partners and that seems like a total shit show as well. Good luck bringing in a project into either one of those situations...the small guys will try pay you off with a finders fee or some other menial offer to make your partnership ambitions go away and the large firms you aren't going to have the political connections, pull, or or resume to land a profitable project for them. At which point you gotta ask yourself if you have the skills, balls, and start up money to go out on your own...
tduds
Jul 12, 18 11:30 am
Medium-sized firms exist.
OneLostArchitect
Jul 12, 18 1:17 am
I was given an option to buy in.... I did not see the value and in reality would rather have my money tied up in real estate. Company can go belly up and what actual assets does an architecture firm have? My money would just vanish. What am I actually buying? I’m so happy I didn’t make this mistake as I felt i was getting forced into ownership and back away from the golden handcuffs. Start your own firm... if your name isn’t going to be on the front door I saw forget it.
sandrock
Jul 12, 18 4:59 pm
thanks everyone, these comments really help! Sounds like in general it's not a good investment.
I'm about ten years into my career and have a goal to become a partner someday. Just curious how others here became a partner/principal?
Did you work hard and become a valuable asset to the firm, then promoted to a principal? Did you have to wait and buy out a retiring principal? Did you just buy into the firm?
I'm sure it all varies by firm and everything is different, I'm just trying to get an idea, do I need to have a big chunk of cash or can I become principal by working hard and being a good architect?
thanks.
There is most certainly some sort of financial investment required.
In some cases you can buy into the firm gradually, essentially by being bonused a percentage each year over a period of time. In others you'll need the "big chunk of cash". In many cases it's a combo of those two. You'll never just be "promoted" to principal - there needs to be a financial agreement, valuation of the firm, etc. The other option of course is to start your own firm, on your own or with others.
Start your own firm.
Either buy-in or generate revenue.
Having a network of clients who will hire you for projects is usually an important consideration.
I would suggest modifying your dream to: becoming a partner some OR starting your own firm.
Unless you are in an organization with a clearly defined promotion system, the partnership thing can depend on a lot of timing and economic factors that are usually beyond your control.
When I was younger, I thought I could get rich quick by learning how to trade stocks. Needless to say should have just put my money into a index fund. However, after learning about evaluating a company based on fundamentals, management, product and financials, most architecture firms are literally the worst investment ever and the pyramid scheme of “buying in” is just that in most firms, a pyramid scheme. Unless your talking about an AECOM, I would never put money into a traditional design firm.
Most firms aren't a true pyramid scheme, as that would require doubling the number of partners in each generation, which quickly becomes untenable. It's more of a Ponzi scheme - the principals aren't multiplied in each generation, they're just replaced, and each generation pays for the one that came before it, and everybody's happy until the returns stop coming in. It's only a bad investment if you end up being the last generation - so if you do buy in, start grooming the youngster who will one day buy you out.
Some firms have enough partners that they might be pyramid schemes. Years ago before my state let firms have names other than those of the partners, our receptionist had to remember 10 names every time she answered the phone. These days the firm has more than 20 partners.
A firm in my past had a crew of sad little "partners" with 1 & 2% stakes in the company. The majority partners with 25%+ stakes treated them like dirt.
a AE firm I heard about had a bunch of people buy into his already failing company...2008 hit and the main principle hit the road with the remaining cash and left everybody else with the debt...f-ed over a lot of good people.
I agree with the comments above, don't buy into a firm. Be a "rainmaker" and bring in the clients. Once you have a reasonably steady stream of clients that come to you then partner with a really good management partner to "run " the office ( assuming your skill set is better at bringing in clients ) or vice versa, if you are better managing the office side of things find a designer / charismatic type to bring in the clients and open your own shop.
most firms are small, incestuous, one or two person firms and they don't want partners. The flip side is these large corporate firms with 100 partners and that seems like a total shit show as well. Good luck bringing in a project into either one of those situations...the small guys will try pay you off with a finders fee or some other menial offer to make your partnership ambitions go away and the large firms you aren't going to have the political connections, pull, or or resume to land a profitable project for them. At which point you gotta ask yourself if you have the skills, balls, and start up money to go out on your own...
Medium-sized firms exist.
I was given an option to buy in.... I did not see the value and in reality would rather have my money tied up in real estate. Company can go belly up and what actual assets does an architecture firm have? My money would just vanish. What am I actually buying? I’m so happy I didn’t make this mistake as I felt i was getting forced into ownership and back away from the golden handcuffs. Start your own firm... if your name isn’t going to be on the front door I saw forget it.
thanks everyone, these comments really help! Sounds like in general it's not a good investment.