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November 29, 2006

To Partner or Not To Partner. That Is The Question.

Connecticut Law Tribune - November, 2005

I remember reading years ago about a marriage prenuptial agreement that was so specific as to each spouse’s responsibilities, right down to the husband’s obligation to put the toothpaste cap back on the toothpaste tube, that most people thought it was a prenup on steroids. The spouses, however, clearly loved it because it laid out all the expectations each had of the other so neither one was in the dark about their responsibilities in the marriage.

Well, partnerships are like marriages. Half will last a lifetime, the whole being greater then the sum of it’s parts; growing together, getting stronger through adversity and filled with compromise. The other half will end up in a bitter and nasty separation and dissolution fighting over assets and the custody of the children (read "clients"). Therefore the burning question that’s always asked and must be answered is, "to partner or not to partner?"

Like marriage, partnering should be for the right reasons. However, most lawyers enter partnerships for the wrong reasons borne out of fear of the unknown, doubt about their own capabilities and a lack of understanding about what partnership truly means. Do you really need a partner and all of the emotional and financial entanglements it entails in order to assuage those fears? The answer is a resounding "no."

These are the wrong reasons to partner with another lawyer:

"I want someone to bounce ideas off of." As a rule, most lawyers are very generous with their knowledge and will give invaluable guidance if asked. It is important to maintain relationships with your peers, law school alumni, your bar associations and the like and you will get all the guidance and mentoring you need. Continuing legal education will provide a great base for practical knowledge and an opportunity to network with others in your area of concentration. Depending upon your office selection, should you choose a shared suite, you will have a built-in sounding board without the financial intimacy.

"I want to be able to take a vacation and know my clients are being taken care of." (And from the client’s perspective, "who will take care of my case if you are not available?") Any solo will tell you they have strong reciprocal relationships with other solos and cover for one another when necessary. It is very important you have a dialogue with your clients about a planned or unplanned absence even if the client never asks because it is a legitimate concern of clients who hire solos.

"I don’t want to take all the financial risk." If you are going out on your own, you are taking a calculated risk, period. If you wish to defray cost, how you set up your office, whether working in a suite of other lawyers with shared services or setting up shop by yourself, will determine your cash outlay and financial risk. If you’ve already invested nearly $100,000 in your education is a few more thousand any riskier?

"I’m not very good at (fill in the blank)" Sharing your profits with someone simply because they have an accounting background while you can’t balance a checkbook is not a reason to take on a partner. It is a reason to hire an accountant. If they don’t work out you get another. Not so easy with a partner.

"I want to partner with someone who can teach me." Again, sharing the profits in exchange for guidance you can pretty much get for free if you are properly networked, belong to the right associations and taking continuing legal education, is just giving away your hard-earned dollars.

Do not take on a partner out of fear. You will be living and breathing this partner morning, noon and night. You are depending upon this person for your livelihood while making them the caretaker of your professional reputation.

The short list of the right reasons to take on a partner is: You share a similar vision of where you want to go with your law practice and how you want to get there and are committed to being in it for the long haul. You respect each other’s ability as a lawyer and trust the other to make decisions in your absence which will be binding upon you. Each of you has something of comparable value to bring to the partnership, skill sets which compliment and enhance each other. Both of you recognize your equal responsibility to develop business and bring in clients. You share a work ethic and morals. (Partnership brings both benefits and liabilities and you do not want to be vulnerable to the ethical missteps of a partner who does not necessarily share your values). You work well together.

Partnerships can be a wonderful experience when entered into for all the rights reasons and with the right partner. If you decide to partner, make sure you have a partnership agreement that clearly spells out all the financial agreements between the partners not just while you are together but also should you part company....right down to who puts the toothpaste cap back on the toothpaste tube.

Susan Cartier-Liebel is solo practitioner, adjunct professor at Quinnipiac University School of Law and a business consultant for solo and small firms. She can be reached at SCartier_Liebel@comcast.net. Copyright © Susan Cartier-Liebel (2005) All Rights Reserved. No portion of this material may be copied, transmitted, posted, duplicated or otherwise used without the express written approval of Susan Cartier-Liebel.

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