Trends and Analysis for Successfully Transitioning Lateral Partners
into New Partnerships While Minimizing Risk and Reducing Potential Liabilities

Separation Agreements.

Court Found No Conflict of Interest with Dual Representation of Law Firm and Partner Against Claims from Departing Partner Shareholder

Earlier this year, California’s Fourth District Court of Appeal found that a partner’s status as 50% shareholder of a law firm did not give rise to a conflict of interest which would preclude the firm’s counsel from defending the firm and another partner against the departing partner’s lawsuit.  (See Coldren v. Hart, King & Coldren (2015) 239 Cal.App.4th 237.)  The Court also found that under the facts specific to that case, the departing partner did not have standing to bring a motion to disqualify the firm’s counsel based on an alleged conflict of interest. The Court’s analysis in this matter is helpful in guiding not only attorneys who are considering whether there is a conflict with such dual representations, but for law firm’s handling the transition of departing partners and who want to avoid potential conflicts in representing the firm’s interests in such disputes. More

Absent an Agreement to the Contrary, the California Uniform Partnership Act Controls the Scope of a Departing Partner’s Liability to a Former Partnership for Partnership Obligations Incurred by the Firm after Partner Dissociation

A significant issue for departing partners is to understand and evaluate the scope of any potential liability he or she may have to their former partnership once the departing partner provides notice of departure and dissociates with that partnership.  In some instances, partnership agreements set forth specific terms upon which a departing partner may continue to have obligations to its former partnership for certain firm management expenses that the former partners had agreed to share for a reasonable period of time beyond the terms of the partnership. More