Partner or group departures seldom go smoothly – at least that is what we hear in the legal news headlines. However, the transitions that do go well, and there are many of those, tend not to be newsworthy events. Most of us tend to be interested in the salacious details of where it all went wrong, who is to blame and who acted badly. But what makes successful departures different? Simple answer: preparation and planning. More
into New Partnerships While Minimizing Risk and Reducing Potential Liabilities
Partner Departure Tips.
Planning is Key to Successful Attorney Transitions
Mitigating Risks During Departure, Part 2: Minimize Exposure to Potential Claims Following a Partner Departure
It is important to remember that there are no absolute safe harbors protecting you from potential liability even when you endeavor to do all the right things when departing your firm. This is true in large part because there are often grey areas within the rules, tensions between those rules and your obligations to your firm, and a disparity between what is in the best interest of the firm versus the client, and even potentially you. In addition, you cannot control the response, behavior and/or motivations of certain firm members that may not want to see you succeed or are angry that clients may leave with you. Yet, making informed decisions, strategically planning and consciously navigating these grey areas helps to mitigate many of these risks.
As stated in part one on this topic, there are two main categories of risk a departing partner faces when considering his/her transition to a new firm. First, the risk that your firm will find out about the potential departure (or departure considerations) prior to the time that you are ready to tell the firm or provide formal notice. Second, the risk that your conduct with respect to your departure plans or considerations will expose you to potential claims by your firm or your clients of unlawful or unethical conduct. Sometimes attorney conduct will potentially implicate both categories of risks. Part two on this topic of mitigating risks analyzes ways to minimize your exposure to potential claims or allegations of misconduct following a partner departure. More
Mitigating Risks For Departing Partners, Part 1: Control the Timing of Your Departure Announcement
Taking the plunge to embark upon an attorney transition inherently involves some risk. Like with most things, some of the risk you can control, some may be outside of your control. However, taking steps to mitigate risk whenever possible will reduce the likelihood that you are subject to ethical scrutiny, disputes with the firm or protracted legal battles following your departure. It will also increase the likelihood that the firm will cooperate with your client transition plan and the eventual return of your capital.
There are two main categories of risk a departing partner faces when considering his/her transition to a new firm. First, the risk that your firm will find out about the potential departure (or departure considerations) prior to the time that you are ready to tell the firm or provide formal notice. Second, the risk that your conduct with respect to your departure plans or considerations will expose you to potential claims by your firm or your clients of unlawful or unethical conduct. Sometimes attorney conduct will potentially implicate both categories of risks. The first part of this article on mitigating risks will analyze ways to avoid having your firm or clients finds out about your departure before you are ready to announce it. More
Partner Departure Tip: Don’t Let Your Emotions Rule the Day
Perhaps the single biggest factor partners underestimate when transitioning their practice to a new firm, or starting a new practice, is the emotional impact of the move. Even those who consider themselves stoic and rational by nature are often caught off-guard by how highly emotional this transition can be, for both the departing partner and for those whom he or she is leaving behind. In fact, there are a whole host of emotions that may accompany any departure including excitement, relief, sadness, anger, elation, fear, betrayal and sometimes a bizarre combination of them all. However, emotions can be kryptonite to judgment. And clouded judgment often results in poor decision-making. More
Partner Departure Tip: Locate Your Partnership Agreement and Read It
If you are a partner in a law firm, your partnership agreement is the key document that defines your rights and obligations as a partner. It can govern everything from how you get paid, to how the firm is managed, to what liabilities you have agreed to assume. In addition, it most likely has specific terms that impact how you should properly withdraw or depart from your partnership when the time comes. However, the longer you serve as a partner in a firm, the further removed you often are from what is actually contained in the partnership agreement (which also may have been amended numerous times over the years.) More