A comprehensive law firm partnership agreement should serve many purposes. It should address all of the significant “life moments” of a law firm, such as the admission of partners, the management of the firm, partner compensation, withdrawal of partners, partner retirement, and dissolution. In addition to providing this agreed to “road map” for how the partners want to run their business, a law firm partnership agreement can also help reduce the risk of disputes among partners and their firm. Moreover and to the contrary, the absence of an agreement, experience demonstrates, greatly increases the likelihood of disputes among partners even when times are good. For, when left to common law and/or statutory rights, partners and partnerships—and particularly law firm partners and law firms—are able to fashion numerous imaginative arguments by which they may seek to obtain redress, which can take years to unravel before a judge or arbitration panel. This is the case despite that law firms and lawyers should abide by their agreements whether they are written or oral.

A recent case from a Colorado state court illustrates how the absence of an agreement led to litigation among lawyers and suggests how the existence of an agreement may have avoided such disputes. In this month’s column, we briefly discuss this case and make some general suggestions that can be implemented by firms ahead of time in the hope of avoiding disputes.

‘Fisher v. Reilly’

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