Why extending partner review cycles is usually a bad idea - and what to do instead

Every few months, a managing partner asks me the same question:

“Can we move our partner reviews from annual to every two years to reduce our administrative burden?”

On the surface, the logic seems sound. Reviews take time. They create friction. They consume leadership attention.

Extend the cycle. Reduce the noise. Move on.

I advise professional services firms on partner reward, partnering strategy and incentivizing growth. I have seen this experiment play out in law, accounting, engineering, media and consulting firms.

The fundamental problem lies in the question itself: partner reviews are not an administrative burden. Done well, they drive growth across the partnership. 

The difficulty is, most professional services partnerships don’t invest the time to do them well – as a result, they are done poorly, add little value for the partner or the partnership and become an administrative burden, giving rise to the question of lengthening the cycle. 

In this article, I outline three problems that emerge when firms lengthen partner review cycles and a three-step approach for what leaders should do instead.

Three problems caused by extending partner review cycles

Three predictable problems emerge when firms lengthen their review cycle.

1. Market reactions slow. 

A lot can happen in a partner’s practice or client base in one year, let alone two. 

If you only sit down with partners once every few years, meaningful course correction becomes almost impossible. Leadership is left with blunt options: place the partner on a heavy improvement plan, wait for conditions to improve or begin a termination process.

Short review cycles change that dynamic.

When managed effectively, they allow firms to address partner contribution issues in near real-time. Leadership can quickly direct support and resources to partners who are struggling or are suddenly carrying a significant workload.

2. Leaders delay difficult conversations.

You see the data. A partner is slipping or overheating because client demand suddenly spiked.

Strong leaders act immediately. They speak to the partner, acknowledge the issue and agree a plan.

Yet many leaders don’t.

When firms lengthen the review cycle, they hand leaders the perfect excuse to delay difficult conversations.

Surfacing gaps in partner contribution early sends a message to the wider partnership that you take accountability for results seriously. 

This in turn helps protect fairness in profit-sharing and strengthens trust across the partnership.

3. Long-term priorities lose momentum.

Mature firms require partners to reflect on their practices periodically, typically at least annually. 

When firms stretch the review cycle, drift becomes more likely. The work that shapes the firm’s future gets crowded out by day-to-day delivery.

This is where partner contribution often slips.

Investments that matter most to the firm lose momentum: transforming a work type with AI, opening a new workstream with a key client or leading the work to launch a new office.

Shorter review cycles reinforce the behaviors that drive growth, ensuring partner contribution stays aligned with firm strategy and long-term value creation.

Your partner performance reviews are your primary driver of business growth – stretch them out, and you will lose drive. 

In addition, partner performance reviews should inform partner compensation decisions. Extending the review cycle weakens the quality of those decisions.

Three elements of an effective partner review cycle

The best partnerships have challenged the assumption that the partner review cycle must always coincide with the partner compensation cycle. Separating them improves accountability for promises made and leads to better compensation decisions.  Adding in-flight check-ins helps to further drive partner performance.

Here is a three-step approach to aligning long-term firm priorities with partner contribution and related compensation implications.

1. Maintain an annual partner contribution cycle

Most firms benefit from maintaining a formal partner contribution review on at least an annual basis. A formal review:

• Provides a disciplined assessment of how each partner contributes to firm performance
• Allows leadership to input into partner business plans or agree with partners' forward-looking objectives and key results
• Provides well-moderated inputs – evidence – for profit-sharing decisions

While there was a push some years ago by the Big 4 and some tech firms to eliminate the annual review, most firms – and most partners – have reverted to them, primarily because the business cycle also follows an annual pattern. 

Some firms have replaced the annual review with a 3 or 4-monthly, or semi-annual snapshot that is less burdensome than a big once-a-year exercise.  This is also a good approach if you have both discipline and technology in place to support a more frequent review cycle. 

We don’t work with a single market-leading professional services firm that waits for two years or longer to review their partners’ contribution to the firm.

2. Adjust partner equity less often than annually

While I often argue in favor of shortening partner performance review cycles, there is a case for lengthening the partner compensation cycle in certain circumstances.

Many firms review partner compensation annually at the same time as partner contribution. That is appropriate for salary reviews for non-equity partners and bonus allocations for non-equity and equity partners.

If your firm runs an Eat-What-You-Kill compensation system or some other formula, it is easiest to review partner compensation on an annual cycle after the numbers are in.

In other systems, you could consider extending how often you adjust equity partners’ long-term profit-share:- 

• In a managed lock-step, where profit-shares are quite “sticky” by design 
• For the part of your compensation that is true equity based on the “enterprise value of the firm” (goodwill-based equity)
• Where you have contingent profit-shares or equity invested in reaching business goals that are longer-term than annual

Most firms that do extend their partner compensation review cycle to beyond annually operate on a cadence of two or three years. 

This longer cycle provides stability in individual partner economics while still allowing meaningful adjustments when contribution targets or when firm-wide milestones are met, rather than calendar-driven.

The bottom line is that how often you adjust profit-share can, but doesn't have to, coincide with how often you conduct partner reviews.

3. Check in with your partners throughout the year

Annual reviews and compensation rounds alone are not enough to calibrate partner contribution. Effective partnerships supplement formal reviews with informal, in-flight check-ins. 

These in-flight check-ins are not formal appraisals.

At their best, these are supportive leadership conversations about how the partner’s contribution is evolving and where help is needed (e.g. “hey, good job landing that massive client – what support do you need?”). 

At their worst, these are not held at all or focus on a single number (e.g. “hey, your billings are down, what are you going to do about it?”). 

Informal check-ins allow leaders to address emerging issues early, provide support where needed and reinforce strategic priorities.

This helps firms to respond to unexpected changes in market conditions (e.g. “hey, we think the market is turning for your type of work, can we re-align your priorities for the next 6 months?")

Short feedback cycles, done well, drive growth, strengthen accountability and improve partner performance. 

Most importantly, they ensure that partner contribution is managed proactively rather than retrospectively. 

Shorten contribution reviews - lengthen profit-share decisions

When reviewing your firm’s processes, keep these key factors in mind.

Stretching formal partner reviews to two years or longer is a mistake. It misses a critical opportunity to drive growth and accountability in the partnership.

Partner compensation decisions serve a different purpose. Less frequent adjustments can create stability and psychological safety. Partners can focus on building the business with their peers rather than constantly worrying about their personal economics.

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