My business attorney, Jones, has been practicing for 36 years. I have been her client for about 10 years, since my previous one retired and recommended her.
She has won many awards over the years.
She has a partnership firm. Smith and Jones. They are the only attorneys at this firm. Their office is in a posh building in an upscale neighborhood. They are very, very successful and have had many write ups in newspapers and magazines on top of awards won.
Not 30 minutes ago this morning I received a letter from her that she was joining another law firm as a partner. That firm is quite large with dozens of attorneys. The letter says she will still represent me and is still specializing in business law.
I find this odd seeing her years in practice and that she already has her own firm.
I know why attorneys go to other firms. More money, freedom to expand the types of law practiced, etc.. But lawyers that do that are usually younger and looking to move up. Not in their early 60’s with over 3 decades experience.
I just want to get some feel as to why she’d do this at this stage of her career. I’m scheduled to have a meeting with her in a few weeks. Want to know what types of questions to ask her. Other than the obvious.
My wife is an attorney in a successful boutique law firm. Two long-time partners (one in their 40s, one in their 60s) recently left for another firm. Bigger piece of the pie is all it boils down to.
Lots of possible reasons. You say she’s in her 60s and successful. Maybe she’s looking to retire, and wants a smooth hand-off of clients to a new firm. Is her partner in the old firm also of a similar age? Maybe they’re both looking to retire.
Maybe just her partner wants out, and she doesn’t want all the hassles of running the firm by herself. Maybe they had a falling out, and dissolved the firm. Maybe someone is dying, could be lots of things.
I’m guessing that it’s some combination of wanting a smooth handover when she retires and not wanting to run a business by herself/anymore. My doctor did something similar - he was in private practice for about 30 years , sold the practice to a hospital and he is now an employee of the physican group that staffs the office. He now just does the doctoring, not the additional work involved in running a business.
I think that says it all. Many attorneys hope to make partner, but many of them do. Partners make money based on how the business does, not just on a salary or an hourly rate. More money in her pocket before retiring seems like a smart plan to me.
but right now she is making only a percentage of money that she earns through her work. By going to a larger law firm with a bunch of young associates, she can pass off work to them, and STILL get a percentage of the billing for their work too.
This is not at all uncommon, and the bottom line is she is positioning herself to continue to earn money for work that others do, as well as unloading all the unbillable work that she currently does herself that is required to run a law firm.
But a larger percentage of a lower per-capita gross revenue is less than a smaller slice of a larger revenue, notwithstanding access to more resources, a larger client base, the ability to spread overhead costs across more clients, et cetera. There are a lot of benefits to being part of a mid-sized firm as opposed to a small practice such as being able to better weather the loss of a significant client, ability to utilize the most up-to-date legal IT systems, having dedicated HR and Accounts departments instead of partners having to manage that themselves or pay someone high fees to do this work for them, et cetera.
There are, of course, all of the scenarios listed by @Horatius that might prompt a buyout or merger (dissolving up a practice due to a partner leaving, retiring, or dying) means having to pay out a valuation that the firm may actually not have cash on hand (because a law firm’s biggest asset is typically its client base), and the remaining partners may not want to take out a loan to make the payout. Buying into a partnership in a medium sized firm may come with incentives that help make that payout possible without the partners taking on a lot of debt.
A smaller slice of a bigger pie and none few of the hassles of running a business. Plus the issues others mentioned about possible issues with her current partner.
It’s a pretty bog-standard move for an attorney approaching retirement age but not ready to quit. But maybe ready to cut back.
The role of partner at a two-person firm is to bring in business and do the work. And maybe be your own secretary, paralegal, and research associate.
The role of partner at a 10-partner 50-attorney firm is to use your connections to bring in business, and do a bit of supervising of the minions doing the work. Boy, is that an easier life. Pays better too.
I think you are probably right about this. The attorney I had previously was in solo practice his entire career. Ive never encountered this situation before.
It seems pretty clear to me that she’s approaching her final glide path. By joining another firm, she can slowly cut back (or eliminate) a lot of the administrative parts of being the Big Cheese, and also farm out her client list to her new partners or associates in the new firm. Eventually, she’ll slip out the door pretty quietly, by which time she may only have a handful of clients to introduce to their new attorneys at the firm.
As others have said, there is an advantage of having a larger firm behind you as you try to slow down and eventually retire. A two-person partnership can’t really develop a meaningful transition plan,(without hiring new lawyers, which creates other issues). Big firms, other the other hand, do it all the time. She may make more or less money at the new place, but I’d guess that’s not the motivation.
And I’d say feel free to ask her. If this is the reason (or something similar) she’d have no hesitation to telling you. In fact, in some ways, she’s doing it to make it easier for her clients when she steps out.
In some cases, an atty in their 60s can really be a rainmaker and can move to a larger firm to “move up.” It is also quite common for small firms with older partners to combine with larger firms. I presume there are $ benefits to the owners of the smaller firm.
But from what you describe, I’d suspect she’s just tired of the years of managing a 2 person partnership. Realize that a firm with “dozens of attorneys” is still a relatively small firm - dependend on location, of course.
And, depending on your relationship with her and her disposition, feel free to ask. But I would imagine she has some pat vanilla “non-answer” that she provides most folk who inquire. As a longtime client, and depending on how much business you throw her way, she might be more open.
At my firm (I am a paralegal) we just had a very experienced lawyer join who, until now, had been a solo practitioner with one paralegal. Now, if she wants to go on vacation, there are other people to cover for her. Also she doesn’t need to deal with accounting, office leases, billing, or any of the other stuff that doesn’t require a lawyer.
It should be noted that despite what you see on television and in movies, partners (and especially senior partners) at mid-sized and larger firms are not typically doing much of the actual casework for litigation, negotiation, or drafting motions, briefs, and claims; while they might help structure legal strategy and supervise the development of a case, and present as ‘lead’ in a high profile case in court, their main focus is client management and retention, business development (the proverbial ‘rainmaker’), and managing the firm’s business strategy, as well as informal lobbying if they practice in an area influenced by government policy. An independent lawyer with an extensive client base can be a real get for a middle-sized firm not only for the client base they bring but the potential for attracting new business in a geographic area or business sector that they don’t have experience in, and gives the new partner security and a way to move into a more supervisory role rather than dealing with the grind of casework as well as managing all aspects of a small business. I think Better Call Saul actually does a really good job of representing how a middle-sized law firm works with Hamlin, Hamlin, & McGill, as well as the other firms they interact with on the Sandpiper class action case.