Critical questions to ask before joining a partnership

July 26, 2017

It may be obvious to most lawyers when advising their clients who seek to enter a partnership that basic questions must be asked. What continues to amaze me is that many of those same lawyers, when joining a partnership themselves, do not undertake the same level of due diligence they recommend to their clients. I am not sure if this oversight is due to the excitement of achieving the holy grail or relief of having made it to the ‘top’ after years of hard work. Whatever the reason, when our legal recruitment consultant team ask the questions below of partners or associates on the brink of accepting partnership, many do not have the answers. Below are some of the due diligence matters to consider on admission to partnership:

  1. Seek a copy of the firms accounts to allow you to asses your financial risk.
  2. Traditionally, firm financial success is based on by average profit per equity partner, determine the profit per partner.
  3. Seek information on staff, associate and partner turnover. Not just in terms of numbers but also the reasons for their departure.
  4. Are the office premises leased or owned? Look at the terms of the lease and if personal liability attaches to partners.
  5. What are the capital contribution provisions on admission and on leaving the partnership? How is capital contribution funded?

This list is by no means exhaustive and not intended to replace advice that ought to be sought from a lawyer or accountant but it serves as a reminder that every lawyer considering partnership should conduct the same level of due diligence they would recommend to their clients. If you’re considering joining a partnership and have questions about the process, contact a member of our legal professionals’ recruitment team – we’d be happy to discuss your options in the market.

Dal Bhathal, Managing Partner