One is the loneliest number that you’ll ever do. Two can be as bad as one, it’s the loneliest number since number one.
Even for those who’ve always fantasized about hanging a shingle, the reality is that going solo can be a tough, lonely experience. From bringing in business, handling clients’ matters and paying rent and other bills, you’re completely and entirely on your own. No one else around to share the burden or expenses, to have your back, to listen to your complaints, or to blame. Still, as challenging as it is for a lawyer to start a firm solo, as the song goes, two can be as bad as one.
On the surface, partnering up to start a firm seems like a no-brainer. Partners can share costs for office space, legal research, fancy stationery, and maybe even an assistant or an associate, so you can start out in style, with much more than you might be able to afford on your own. Plus, firms are often able to get better bulk deals from vendors and thus, avoid the solo tax. On the practice side, a partner may contribute strengths that you may lack. For instance, you may be a legal genius, but also an introvert who’s afraid to ask a colleague to lunch. A partner with marketing or networking skills can compensate for your deficiencies. And a partner can also be a selling point for a small firm since you can also assure clients that you have back-up who can cover if something happens to you.
Finally, starting a firm with someone else to share the experience can be more fun. All of the cool kids in the start-up world have partners — though in that universe, partners go by the hipper title of “co-founder.” Apparently 2.09 team members is the ideal number for a start-up — and, in fact, co-foundership is so popular in the start-up world that there are several websites that function solely as matchmakers for entrepreneurs looking for to team up.
Still, just as partnerships don’t work all the time for entrepreneurs — in fact, 62 percent of businesses fail due to co-founder conflicts — the same is true for lawyers. And often for the same reasons….
In many cases, the complementary skills that made partners fall in love at the inception of the relationship are frequently the source of its breach. Take a “finder-grinder” partnership as an example. The grinder partner, who spends long nights at the office, may believe that he’s entitled to a greater share of profits than the rainmaking partner who’s constantly taking long lunches and leaving early for networking events. Meanwhile, the rainmaker may feel that he can do better by hiring a lower-paid associate to churn his cases instead of splitting fees with his grinder partner. Eventually, financial disputes drive them apart.
Differences in each partner’s goals may also lead to disputes. If one lawyer views starting a firm as a gap filler on his résumé, while the other is in for the long haul, they’ll eventually argue over matters like whether to reinvest profits in the firm or simply take a short-term payout.
Inequality between the partners can also give rise to problems. Sometimes lawyers have enough work and resources that they don’t really need a partner — but they team up anyway because they don’t want to go it alone. Usually, in this situation, the weaker partner winds up operating as a glorified associate but instead of salary, he or she is getting eat what you kill (and kill zero = eat zero). If you don’t have much business and find yourself courted for a partnership by someone who does, be careful.
Still, even if you and partner resolve these considerations in advance (and memorialize your understanding in a written agreement), there’s still risk. That’s because lawyers remain liable for their partner’s malpractice. So if you’re not one hundred percent certain that you trust your potential partner’s legal skills or personal character, then partnering up with that person isn’t a great idea.
So should you partner? That depends. I’ve met several duos who launched and grew successful practices from the start – but in those cases where it worked, the partnership was preceded by a pre-existing and longstanding professional working relationship, such as colleagues from a firm or document-review project or as team members on a lengthy moot court or mock trial project in law school. In the majority of partnerships that I’ve observed, the arrangement failed – either because the partners didn’t fully appreciate and value each others’ strengths or because the partnerships were unequal, with one partner more dependent than the other.
That’s why, as a general rule, lawyers starting a firm are better off avoiding a partnership until they’ve had a chance to get established on their own. As this Forbes article describes, there are plenty of ways for entrepreneurs to acquire the benefits of a partnership without a partner — through mentors, creation of project-specific teams, or leasing co-working space. These ideas work equally well for lawyers and are preferable to a shotgun partnership, forged in desperation or fear, that is destined to fail.
What’s your experience with partnership arrangements? Share your views below.
Carolyn Elefant has been blogging about solo and small firm practice at MyShingle.com since 2002 and operated her firm, the Law Offices of Carolyn Elefant PLLC, even longer than that. She’s also authored a bunch of books on topics like starting a law practice, social media, and 21st century lawyer representation agreements (affiliate links). If you’re really that interested in learning more about Carolyn, just Google her. The Internet never lies, right? You can contact Carolyn by email at firstname.lastname@example.org or follow her on Twitter at @carolynelefant.