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.