The Written Partnership Agreement

Any lawyer entering into partnership with another for legal practice must form a written partnership agreement.  This written partnership agreement should contain the following clauses:

  • Nature and purpose of the partnership – This clause will guaranty that the partner(s) will not move away from the essential purpose of the business.
  • Capital contributions of each partner – This is to ensure that neither of the partners can dispute a partner’s capital contribution to the practicing business.  The contract should also lay down non-cash contributions such as goods, services, or time.
  • Profit and loss allocation – Usually, a partnership allocates profits and losses equally.  However, there may be exceptions.
  • Authority and scope of each partner – The contract has to specify which partner or partners will run the daily activities of the partnership firm, how the duties will be divided, and how decisions will be made.
  • Admission of new partners – This clause provides for admission of new partner.  It also defines the process, their rights, duties and liabilities.
  • Course of action in case a partner dies – According to law, if one partner dies the partnership is automatically dissolved and liquidated.  However, the partnership agreement may provide otherwise.

Inside The Written Partnership Agreement