Should an HR Consultancy Practice What It Preaches on Equity?

Some HR consultancies run a minimal, informal equity program internally, a handful of undocumented grants to founding partners, while advising clients to build formal, well-governed equity plans with clear vesting and communication. The gap is a real liability: a prospective senior hire who asks pointed questions about your own equity structure, and doesn't like the answer, is unlikely to trust the advice you're selling.

The fix isn't necessarily more equity, it's the same rigor you'd recommend to a client: a documented plan, consistent criteria, and a clear communication approach that a partner could explain confidently if a hire asked about it directly tomorrow.

The opposite mistake is building an elaborate, consultant-grade equity program for a firm with three partners and no other equity holders, adding cost and complexity that doesn't serve anyone yet. Match the formality of your program to your actual headcount and grant activity, the same guidance you'd give a client evaluating whether they're ready for a dedicated cap table tool at all.

A firm this size can usually track equity on a well-maintained, signed-document-backed spreadsheet until grant activity picks up meaningfully, and paying for dedicated software before that point is money better spent on the firm's own growth.

If your consultancy has a referral or reseller relationship with a compensation benchmarking or equity management vendor, disclose that relationship clearly whenever you recommend that vendor to a client, the same standard you'd hold a client's own advisors to. An HR consultancy's credibility depends heavily on being seen as vendor-neutral, and an undisclosed financial relationship, even a small one, is a real risk if a client discovers it independently rather than hearing about it directly from your firm first.

This applies whether you're recommending Pulley, Carta, or any other tool a client happens to ask about during an engagement.

Your firm likely already has access to compensation benchmarking data through your client work, so use it: size a new partner's equity grant against real market data for comparable consulting leadership roles, rather than an informal number based on what the founding partners happened to take. This is exactly the discipline you'd recommend to a client sizing an executive grant, applied to your own firm.

Document the methodology so it's defensible and repeatable the next time you bring on a partner, not reinvented from scratch each time, and keep a copy of the underlying benchmarking data attached to the decision in case anyone questions it later.

For a smaller, partner-owned consultancy granting its first few formal equity stakes, compare Pulley's and Carta's current setup effort, 409A pricing and turnaround times; neither requires a fundraising history. If you're bringing in outside growth capital or considering a merger with a larger HR consulting platform, Carta's format is the one that buyer's team is more likely to already trust.

Whichever you choose, be ready to answer a prospective hire's questions about your own program with the same confidence you'd want a client to have about theirs.

Once your firm's own equity program is genuinely well-run, documented, consistent, benchmarked, it becomes a legitimate reference point in client conversations, provided you're careful to anonymize or generalize details rather than turning your own partners' compensation into a public case study. Prospective clients evaluating whether to trust your equity design advice respond well to a consultant who can say, honestly and specifically, that the firm applies the same standard internally that it recommends to every client engagement.

This only works if it's true. A consultancy caught with a sloppier internal program than what it recommends to clients loses more credibility than one that simply never raised the comparison at all, since the gap between advice and practice is exactly the kind of inconsistency a skeptical prospective client will remember and mention to others in the industry.

Before citing your own program to clients, work through these steps:

• Document the equity program so grants, vesting, and communication are consistent and can be explained to a prospective senior hire.
• Benchmark partner grants against real market data instead of an informal number based on what the founding partners took.
• Disclose any referral or reseller relationship with an equity or benchmarking vendor whenever you recommend that vendor to a client.
• Anonymize or generalize details so your partners' compensation never becomes a public case study.
• Match the formality of the program to your actual headcount and grant activity.