Law Firm Re-Equitization: How to Double Down on a Bad Bet with Somebody Else's Money


Law Firm Re-Equitization: How to Double Down on a Bad Bet with Somebody Else’s Money

"Re-equitization." It is a term, and more importantly a process, which relates to law firm partnership and capitalization structure. The concept is to convert salaried attorneys to partial-profit-participation minority owners. Several firms appear to have adopted the practice, suggesting that somebody is spreading it — possibly even getting paid well to sell it.

It is one of the most singularly bad ideas since lending your last $5,000 to Cousin Frank so he could pursue his "double down on losing bets" strategy on blackjack

So why doesn’t it work?

(Reprinted with permission of the Daily Journal Corp.-Copyright 2014)

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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