Why Did You Go Two-Tier, Again?

A recent post that received a fair amount of attention (or notoriety, as you prefer) was that recapping a presentation by Prof. William Henderson of Indiana University School of Law/Bloomington about the relative profitability of firms that converted to two-tier (equity and non-equity) partnership models.

In short, the presentation asserted that, based on the weight of the empirical evidence, firms that had converted to two-tier status had lower profits per partner than single-tier firms, even correcting for market segment, etc.   Putting aside issues (many of which astute readers pointed out) such as the inability to conduct the counter-factual experiment of what would have happened to these firms had they not converted to two-tier (i.e., they might have performed even more poorly), the irony remains that the common wisdom of consultants recommending the conversions and of most firms adopting it was that going two-tier would increase PPP.  At the very least, it seems safe to say that that goal was not achieved.

So here's your opportunity—all of you in two-tier firms, that is—to chime in on why your firm become two-tier.   Rules of the poll:  You may only vote once, but you may select more than one reason for the conversion.

Results to be published in a week to ten days.