Equity governance for consulting & professional services firms
Partner equity, client-relationship risk and firm succession - where the people are the asset, and their departure is the biggest risk.
The people are the product.
Consulting, agency and professional services firms carry a risk most other sectors don't: a senior partner leaving can take clients and revenue with them. Partner equity, non-compete terms and client-relationship protection all need to be addressed in the founders' or partnership agreement - not after someone walks.
EGF structures partner entry, exit and equity vesting explicitly, so the firm's value doesn't leave with any one individual.
structures need clear entry, vesting and exit rules from day one
and client-non-solicit clauses protect the firm's core revenue relationships
planning matters as much for a 10-person firm as a family manufacturing business
structure choice significantly affects partner liability and tax treatment
Advisory firms where partner equity and client-relationship protection are the central concerns.
Professional partnerships governed by both partnership law and professional-body regulations.
Studios where project IP ownership terms vary by client contract.
Retainer-based firms with talent-dependent client relationships needing non-solicit protection.
Delivery-heavy firms with contractor and staffing-agreement complexity across client sites.
Placement businesses where fee-sharing and non-compete terms between partners matter most.
Partner equity that survives a partner leaving.
Start, Grow or Scale - the framework covers this industry at every stage.
Simpler filings, but partnership deeds matter.
LLP incorporation or Private Limited SPICe+ filing, based on chosen structure.
Registered partnership deed or shareholder agreement covering profit-share and exit.
Registration with the relevant professional council or industry body, where applicable.
Annual LLP Form 8/11 or AOC-4/MGT-7 depending on entity structure.
Where professional services firms actually get stuck.
A departing partner takes key clients with them, with no agreement to prevent it.
Profit-share understood verbally, never documented as the firm added more partners.
The firm's continuity depends entirely on one or two founding partners staying involved.
Equal partners disagree on a major decision with no pre-agreed way to break the tie.
Professional services firms ask us this.
LLPs offer simpler compliance and pass-through taxation, ideal for pure-play consulting; Private Limited suits firms planning to raise external capital or issue equity incentives. We assess this against your growth plans.
Non-compete during the partnership is generally enforceable; post-exit restrictions are harder to enforce but non-solicit and confidentiality clauses remain valuable and are commonly upheld.
Typically based on the firm's book value or a revenue multiple, agreed in advance and written into the partnership agreement - not negotiated fresh each time a partner joins.
This should be defined by an exit clause specifying valuation method, payout timeline and any non-compete obligations - set upfront so it isn't negotiated under pressure later.
Partnership terms that were agreed verbally and never documented, plus no formal succession plan as founding partners approach retirement.
Running a consulting or professional services firm? Let's protect it from partner risk.
One conversation is enough to scope the engagement.
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