The number everyone quotes. And the one that actually matters.
Every year, CPA Canada's compensation study produces a number that circulates through the profession with a certain satisfaction. In the most recent study, owners of accounting firms reported median compensation of $270,000. It is the figure that gets quoted at conferences and in recruitment brochures, the proof that ownership pays. It is also, for most of the people reading this, not true.
It is a real number and a good one. But it answers only half of the economic question a partner should be asking, and for most independent firms it answers the wrong half. The $270,000 is a median across all firm sizes, pulled upward by multi-partner practices. If you run a solo or two-partner firm, your number is almost certainly lower, and the gap between the headline figure and your figure is the first thing worth noticing. The median describes the profession. It does not describe you.
The more useful question is not what the practice pays the owner. It is what the owner pays the practice. And for a great many independent firms, that second figure, measured in hours, in dependence, in a business that cannot be sold, is the one that determines whether the practice is actually worth running.
The number that is missing from the compensation study
Consider two partners who both draw $270,000. The first works a disciplined schedule, has a team that can carry files to near-completion without partner review, and could step away for a month without the practice suffering. The second draws the same figure but works sixty-hour weeks through three busy seasons a year, personally reviews every significant file, and holds every important client relationship in their own hands. On the compensation study, these two partners are identical. In economic reality, they are running entirely different businesses.
The difference is not visible in the draw. It is visible in the effective hourly rate, and in the answer to a harder question: what happens to the practice if the partner stops? The first partner owns a business. The second partner owns a job that pays well and cannot be sold for anything close to what the compensation figure implies it should be worth.
Why the effective hourly rate matters more than the draw
The math is uncomfortable but simple, and it bites hardest at the smaller end. Take an owner drawing $120,000, closer to the reality for a solo or small independent practice than the $270,000 median. Working a disciplined 2,000 hours a year, that is an effective rate of about $60 an hour. Working the 3,000 hours that many owners quietly put in, it is closer to $40. That is a rate a competent senior manager commands as a salaried employee, without the capital at risk, without the personal guarantee on the office lease, and without the liability that comes with signing the engagement. Run the same calculation on your own draw and your own real hours before reading further. The number is often sobering.
This is the quiet economics of a great many independent firms. The owner is not being paid a premium for ownership. They are being paid a salary for labour, and calling the difference profit. The practice is not generating a return on their equity so much as consuming their time and paying it back at a discount.
"A practice that cannot run without the partner is not an asset. It is a job with unusually high overhead."
What the market actually pays for
The valuation market has already priced this distinction, even if many partners have not. The old rule of thumb, one times gross revenue, has been quietly displaced for firms that can demonstrate real transferability. Firms with recurring advisory revenue, client retention above ninety per cent, and a team that services clients without partner involvement now command earnings-based multiples well above the legacy revenue rule. Firms that depend entirely on a single senior partner for every significant relationship trade below it, because a buyer is not purchasing a business. They are purchasing the hope that clients stay after the person they trust has left.
The implication runs in one direction. Every hour a partner spends doing work a staff member could do, every relationship the partner holds that no one else in the firm could inherit, every process that lives only in the partner's head, lowers the value of the practice at the exact moment it appears to be raising the partner's contribution. The busiest partners are often running the least valuable firms.
The pricing model is where the economics are decided
None of this is destiny, and the lever that moves it most is pricing. The profession has been shifting, slowly and unevenly, away from the billable hour. According to the AICPA and CPA.com benchmark, only about ten per cent of advisory practices still bill primarily by the hour, and the firms that have moved to fixed-fee and value-based models report materially higher recurring revenue per professional. Ignition's 2025 benchmark found that eighty per cent of firms planned to raise prices in 2026, and that most of those who had already done so lost no clients.
The billable hour is not merely an administrative choice. It is the mechanism that ties a firm's revenue to a partner's time, which is precisely the dependency that caps the effective hourly rate and suppresses the sale value. A firm that prices by the hour is, by construction, a firm whose economics are bounded by how many hours its partners can personally work. A firm that prices by the engagement, or by the outcome, has at least the possibility of breaking that link. Pricing is not the whole answer, but no firm has ever restructured its economics without first restructuring how it charges.
The point of this issue
The compensation study will tell a partner what firms like theirs pay their owners. It will not tell them whether their own practice is worth what they put into it, or whether it could run without them. Those are not questions a national survey can answer, because the answer is specific to each firm, and most firms have never measured it.
That is the gap this issue exists to close. The Practice Intel section sets out five questions every partner should answer before the next fiscal year. And this issue introduces Practice Pulse, a tool built specifically to help partners at independent Canadian firms measure the economics that the compensation study leaves out.
The questions that do not change
Every issue of The Curated covers what is moving in the profession: the vendor launches, the governance shifts, the market pressures. Those things change constantly. But underneath them sit two questions that do not change, that every partner at an independent firm is answering whether or not they have ever written the answer down. The first: is this practice worth what you put into it? Not what it pays you, but what it returns on the hours, the risk, and the capital you have committed to it. The second: can it run without you? Not for a day, but for a month. A quarter. Permanently, when you decide to stop.
Practice Pulse is built around those two questions. It is a short, structured, confidential assessment for partners at independent Canadian CPA firms. It asks about your firm's size and revenue, your pricing model, your technology stack, your effective hourly rate, and the degree to which the practice depends on you personally. It takes about six minutes. It is free, and it is Canadian-specific, built around the realities of Canadian firms rather than adapted from American benchmarks that do not fit.
There is a second reason to complete it. The Curated will publish the first Canadian Independent Firm Benchmark Report once the founding cohort reaches one hundred named submissions. Every partner who completes Practice Pulse is building the dataset they will later read, a benchmark that does not currently exist anywhere: what independent Canadian firms actually charge, how they actually staff, and what their partners actually earn per hour. National surveys measure the profession in aggregate. Practice Pulse is designed to measure the part of it that looks like your firm.