Law firms are founded with the expectation of success. Partnership agreements are drawn up with beneficial interests in mind. Business development plans are set into motion. Staff and other attorneys are recruited with growth in mind. The concept of firm failure is usually not entertained in the same way.
But many firms do fail—for one reason or another. Sometimes interests among the partnership diverge. Other times declining profitability can spell an end to the firm’s long-term viability. It is therefore important for law firms to have agreements and policies in place to protect from unforeseen problems down the road. Ideally, these protocols are built into the firm’s initial organization documents. If they are not, a firm can take steps to incorporate these documents into its corporate structure to manage an unexpected firm dissolution.
