Situation

What would you do if one day your partner strolled into your office unannounced, threw down on your desk a legal document prepared by his personal lawyer entitled “Partner Withdrawal Agreement,” and declared he wanted out, and his money, in 30 days? After recovering from his initial shock, our client called us.

The TobinLeff Solution

We consulted with our client’s legal and financial advisors, and first had to work out the thorny issue of who could represent whom in this situation given that there were three parties involved—the two partners and the firm as ongoing concern. After working that out and retaining separate advisors, we poured over the existing partnership agreement, interpreted what it said about the value of membership interests versus what the departing partner wanted, and put together a counter-offer taking into consideration that the exiting partner might attempt to take business with him which would diminish the firm’s value. After back-and-forth negotiations with the departing partner and his advisors, we secured an agreement. We subsequently helped to structure an executive compensation package with equity incentives to recruit a new, high-profile senior partner for the firm. The departed partner has since been bought out, and the agency has moved on and continued to grow.