Most people think of law firm partnership disputes as lawyers arguing about breaking up a law firm or leaving a law firm. And that is one typical example of a law firm partnership dispute. But there are many other instances where law firm partners can become involved in a dispute that doesn’t involve ending the partnership or leaving the firm.
For example, law firm partners often become involved in disputes about how to distribute profits. Yes, there’s the partnership agreement that governs the relationship and it may describe how to distribute the profits. But that’s not always the case. Sometimes law firm partnership agreements leave vast discretion to a Managing Partner or to a Management Committee. This discretion can lead to a dispute.
And what happens when one partner or one practice group is making all the money and subsidizing the rest? Or when the firm experiences a unique one-time expense or income event? These types of anomalies often aren’t really contemplated by partnership agreements, which are necessarily targeted to the firm’s general practice. One-time expense shocks or revenue events often require specific agreements to achieve fairness.
Other examples of internal disputes abound. Partners or management at law firms can encounter disputes related to: choosing to distribute profits or to invest in growth; deciding where or how fast the firm should grow; setting policies at the firm, including in-office work requirements; and many other management decisions. It’s not uncommon for disputed management decisions, if left unaddressed, to lead to partner departures or group departures, or even dissolution of the firm.
But it doesn’t have to be that way. These disputes can be resolved if you have a mediator with the right experience and the right perspective, including deep insights into how to resolve the types of disputes that arise internally at law firms.
