August 11, 2015 Practice Points

The Right and Wrong Reasons to Form a Partnership

By Emily J. Kirk

In the article "The Right and Wrong Reasons to Form a Partnership," published on August 4, 2015, in Above the Law, author Susan Cartier Liebel equates partnerships to marriages. She states that, like marriages, "[h]alf [of partnerships] will last a lifetime, the whole being greater than the sum of its parts; growing together, getting stronger through adversity and compromise." But she cautions, "[t]he other half will end up in a bitter and nasty separation and dissolution, fighting over assets and the custody of the clients." Accordingly, Liebel recommends that you consider the right (and wrong) reasons to form a partnership.

Liebel lists the following as the "wrong" reasons:

  • I want someone to bounce ideas off of. Liebel suggests that lawyers need to have avenues available to seek guidance and mentorship. But lawyers can get that through relationships with peers, law school alumni, bar associations, and the like. Online educational sources and continuing legal education programs are also available. Lawyers can find networking and educational opportunities that will allow them to collaborate without having to share "financial intimacy."
  • I want to be able to take a vacation and know my clients are taken care of. Liebel acknowledges that time away from the office is a reality, but she recommends that solos consider building strong reciprocal relationships with other solos and small firms so that they can cover each other when necessary. Liebel also suggests discussing any planned or unplanned absences with clients ahead of time so that they will know that a plan is in place to take care of their needs—even without a partner in the office.
  • I don't want to take all the financial risk. As Liebel says, going solo is a calculated risk—period. Accordingly, Liebel suggests that (instead of partnering) lawyers consider various options for setting up office space to help defray some costs (e.g., sharing office space or services).
  • I'm not very good at (fill in the blank). Liebel states that sharing profits with someone because of concerns about not being good at certain administrative tasks, marketing, etc. is not a good reason to take on a partner. It is, however, a good reason to hire someone who is proficient in that skill.
  • I want to partner with someone who can teach me. Again, Liebel recommends that lawyers can get guidance and education for free or through low cost programs and associations rather than "giving away . . . hard-earned dollars."

Liebel also provides a short list of the "right" reasons to take on a partner:

  • You share a similar vision of where you want your law practice to go, how you want to get there, and are committed to it for the long haul
  • You respect each other's abilities as lawyers and trust each other to make decisions in your absence
  • You bring something of comparable value to the partnership, such as complimentary skill sets
  • You recognize your equal responsibility to develop business
  • You share a work ethic and morals
  • You work well together

Liebel concludes by saying that partnerships can be wonderful experiences when entered for the right reasons with the right partner. And if you are considering a partnership, she recommends having a partnership agreement that spells out all of the financial agreements between the partners while together—and if the partners should part company.

Keywords: solo and small firm, litigation, partnership, partner, Susan Cartier Liebel

Emily J. Kirk is with Thompson Coburn LLP in St. Louis, Missouri.


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