Your firm can finish the year with more revenue and still have unanswered questions about profitability. Did the firm earn the return it expected from that growth?
The 2026 Rosenberg Survey gives firm leaders a reason to ask. Among participating firms with more than $2 million in revenue, revenue grew 7.6%, while income per partner (IPP) grew 3.9%. This was the fourth consecutive year in which IPP growth trailed revenue growth.
Those figures don’t tell you whether your own firm’s profit margin changed. To understand your results, start with the costs behind your growth and the number of equity partners sharing the income.
Identify where the additional revenue came from
The same growth rate can reflect very different changes within a firm. Higher fees on existing work have different staffing implications than more engagements. An acquisition brings people, expenses, and integration work. A new service line may require investment before it contributes much income.
Before setting next year’s goal, separate the effect of higher fees from additional work. Identify how much of the increase came from acquisitions or new services.
A firm might generate the same additional revenue by raising fees or taking on more engagements at current rates. The second path may require more staff time, producing a different income result. Understanding where growth came from and what it required helps you decide where to focus next year.
Set expectations and a timetable for investments
Some pressure on income is a reasonable consequence of building the firm. Hiring ahead of demand or developing a specialty can increase costs before the benefits appear. The question is whether those benefits arrive on the timetable you expected.
When should new hires begin supporting additional work? If a manager was hired to free partner time, has that time become available? What would tell you the investment needs adjustment?
“We’re investing in the firm” becomes more useful when it comes with a specific expectation and a date to review progress.
Look at partner income alongside firm income
Admitting an equity partner may reduce IPP even when total firm income rises. A retirement can increase IPP if firm income holds steady. Neither movement, on its own, tells you whether the firm is operating more effectively.
Look at total firm income alongside the number of equity partners. Together, they help explain whether a change in IPP reflects the income available to distribute, the number of partners sharing it or both.
Bringing in new equity partners may temporarily reduce IPP, even as total firm income grows. Partners should agree on the expected financial impact of that ownership transition and how long it should last, then assess progress against those expectations.
Check what growth asked of the people doing the work
Revenue per person helps you examine whether revenue grew faster or slower than staffing. The staff-to-partner ratio shows how many staff members support each partner. Neither measure alone tells you whether workloads are manageable or work is assigned effectively.
If you added staff, are they taking on the work you hired them to do? If staffing stayed steady, did higher fees or a different service mix account for growth, or did people work more hours?
The survey gives you a comparison; your engagement economics and workload patterns help explain the result.
As you plan for 2027, look for a gap between expected and actual results worth examining. Perhaps a service line added revenue without the expected income, or clients absorbed more partner time than anticipated. Establish what happened before deciding whether to change fees, staffing or the growth target itself.
Your next revenue goal will be more useful if the partnership can explain how reaching it should improve the firm’s economics.
