The Keys to Handling BigLaw Firm Tenants Have Changed- Part 2


Reprinted/posted with the permission of The Daily Journal Corp (2009)

A partner considering a departure from his or her law firm previously had to be concerned about the consequences to the firm that the departure would create. Now, in an LLP structure, all a partner needs to do is weigh the cost of the loss of his or her capital invested in the firm against the reward for leaving, and additional direct obligations

undertaken, such as limited lease guarantee amounts, if any. If the calculation militates in favor of departure — poof — they can be gone. There may be some entity bankruptcy and other issues that complicate this picture and they cannot be ignored, but the bottom line is that the considerable monetary hardship or unquantifiable amounts of risk caused by a BigLaw firm’s demise are no longer present, or at least not to the extent they used to be.

Thus, the change in the profile of liability associated with being a partner, and the increased mobility both in and out of law firms has impacted a critical part of the

foundation to the stability of the law firm enterprise, and destabilized it, perhaps greatly.

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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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