d39bcd59_ons_of_non_equity_partnerships__Advantages
[Management Attribute] Buy/sell [Pitfalls] The firm’s buy-in process has to be “priced” at market value, which many firms overestimate, making the buy-in cost too steep for income partners. Sometimes becoming an equity partner does not earn the non-equity partner much more in overall income, benefits, or authority, so it doesn’t seem worth it to commit to equity partner. Sometimes, the firm’s equity acquisition process can cause an income partner to take a pay cut net of buy-in, and many cannot visualize the ROI of doing so. [Advantages] 
Firms that consistently use a two-step process to admit equity partners can use the non-equity step to prepare potential equity partners for their buy-in, reveal the equity shareholder agreement to them, and share other details firm leadership might not feel are appropriate to share with all managers. Note: We advocate that you share those details with all managers.
The pros and cons of non-equity partnerships
Advantages