Law firms break up all the time and for lots of reasons – some acrimonious, some amicable. Naturally, you don’t anticipate a divorce when your firm is launched. But you can improve the odds of a successful union by (a) careful planning, (b) common core principles, and (c) shared obligations. And if things go bad, there are ways to protect yourself and your clients.
You might think referring a client to another lawyer is as simple as making a phone call. That would be a mistake. When you send a client elsewhere, it’s important to protect yourself by: (a) defining the referral, (b) informing the client, and (c) documenting the event. You should also flag any special issues or potential problems.
Of-counsel relationships have many advantages. But they can lead to unintended liability and ethical problems. These can largely be avoided by: (a) carefully defining the of-counsel arrangement, (b) monitoring the of-counsel lawyer, and (c) communicating what the relationship means for clients.
Sharing office space is a good option for some lawyers. It provides professional companionship while allowing them to pool rent and resources. But the arrangement can be confusing to clients. They may think the lawyers are practicing together in an actual firm. This creates the risk of one lawyer being sued for the mistakes of another. Problems can be avoided by taking some basic risk management steps.
Forming a law firm is a big deal. It creates client obligations and determines how firm members deal with each other. It also has to be run like a business. Minimum standards apply. Some small firms call themselves a “firm,” but they are run like unrelated solo practices. These are “silo firms,” and they are a bad idea.
