Law Firm Formation and Structure

We counsel California law firms on all aspects of law firm formation, structure, and planning, including:

  • Law firm partnership agreements
  • Law firm start-up
  • Law firm partner compensation systems
  • Law firm attorney promotion systems

Law Firm Partnership Agreements

A law firm’s partnership agreement, or other organizing documents, is a critical element in law firm management. A well-developed and well-drafted law firm partnership agreement is a competitive advantage for a law firm. It provides the right incentives for partners and clearly guides expectations, making it easier to manage and administer the firm and to handle partner transitions at the firm.

If properly developed, the law firm partnership agreement engages the partners in essential discussions and analysis of how they should structure or restructure their law firm, how they should manage the firm, how they should divide profits at the firm, how they should handle partner transitions at the firm, and more. This process is important to identify potential differences in expectations among the partners and to address and resolve any differences in the planning or reorganizing stages, before they become problems.

If properly drafted, the law firm partnership agreement should be individualized and unique to your firm’s practice, specifically tailored to your partnership, practices, and growth plans.

The partnership agreement development and drafting process requires structure to stay on target. That’s why we developed our 3-Step Partnership Agreement Drafting Protocol, our process for developing and drafting law firm partnership agreements, designed around your practice:

STEP ONE. Development.

We first develop the Drafting Timeline, identifying key benchmarks and deliverables, and designed to keep the project moving forward to your customized partnership agreement on your schedule.

Then we move on to our assessment of your practice, your partners, and your goals with our firm’s customized interactive Partnership Questionnaire, which we have designed and refined to identify the critical aspects of your partnership, including management, profit-sharing, partner transitions, growth plans, and similar important benchmarks.

From this, we identify the unique aspects of your practice in key areas, from which we select the right partnership agreement approach and templates from our curated partnership resource library, assembled from our experience with hundreds of law firm partnerships.

STEP TWO. Drafting.

Next, we generate your Working Draft partnership agreement, including our recommendations on best practices and your choices for addressing the critical partnership functions.

From this, we have our Revisions Meeting, our video online conference to conduct a  detailed review of the Working Draft with you, discussing key issues, identifying unresolved concerns, answering your questions, and resolving important alternative choices.

We use the information from our meeting to generate your Revised Draft, reflecting your revisions and choices regarding key issues, and we follow up with subsequent revisions until all issues are distilled, addressed, and resolved for your partnership.

STEP THREE. Execution.

With all of the final revisions in place, we generate your Execution Draft along with any necessary Secretary of State or State Bar filings, delivering the robust executed electronic agreement with internal links, searchable text, and typeset formatting so you can refer to and use your partnership agreement as an ongoing and dynamic reference in your practice.

The best partnership agreements are not static, unchanging documents—they are dynamic and they evolve to match your practice as it grows. So, our process doesn’t end with execution. We schedule an Annual Review Conference once a year to discuss details about how your practice has changed and any potential revisions or amendments to the partnership agreement that may be necessary or appropriate.

Law Firm Start-up

We counsel and advise new partners, groups, and other attorneys starting new law firms or opening new California offices on how to analyze and comply with the applicable governing rules and regulations for opening a California law firm and how to plan for their future success. We counsel and advise start-up law firms on entity structure considerations, partnership agreements, and other organizing documents, State Bar registration requirements, start-up planning and operational considerations, and law firm compensation structures.

Law Firm Compensation Systems

We counsel and advise California law firms on developing and implementing law firm compensation systems for partners. One of the most critical aspects of law firm management is how the firm’s profits are divided among the partners. For most California law firms, because partner practices can differ in significant ways—different fee structures, different receivables, different expense loads, different staffing requirements, different business cycles—law firms need partner compensation systems that are flexible, dynamic, and fair, tailored to all partners’ practices and designed to generate an equitable division of firm profits, year after year, whatever the changes the firm may experience.

Law Firm Attorney Promotion Systems

We counsel and advise California law firms on developing and implementing attorney promotion systems for associates, counsel, and other attorneys at the firm. A critical aspect of growth for any law firm is to train and to elevate attorneys into the partnership, with corresponding compensation plans for promotion. A properly-developed and implemented attorney promotion system will be a competitive advantage for your firm, aiding in the retention and recruitment of talented attorneys.