Navigating partnership conflict in law firms — 10 top tips to prevent disputes

Partnership disputes in solicitors’ firms aren’t uncommon. They can be costly, emotionally draining and disruptive to the day-to-day running of a practice.

Here, Oliver Andrews from our specialist professional services team shares ten top tips for preventing partnership disputes — alongside guidance on recognising the warning signs and responding effectively if conflict does arise.

Spotting the warning signs of a partnership dispute

While some partnership disputes announce themselves clearly, others begin with far subtler signs.

Based on our experience, here are some behaviours from partners to watch out for:

• Acting defensively or in an uncharacteristic way. Trust your instincts if something doesn’t feel right.
• Becoming increasingly disengaged and disinterested in the business — possibly in combination with increased absences.
• Unusually protective or controlling behaviour in relation to clients — sometimes paired with unexpected changes to a LinkedIn account.
• Significant changes in financial circumstances. While there could be numerous perfectly justifiable reasons for this, financial pressures can lead to uncharacteristic behaviour.
• Increased use of personal mobile/IT systems for business communications and abnormal changes to working patterns like late-night or weekend activity. This may indicate a desire to be ‘off the record’.
• Undisclosed meetings with staff or other secretive conduct could point to a planned ‘team move’.

While none of these signs — particularly when considering any one point in isolation — mean that there is or will be a partnership dispute, they may signal that trouble is on the horizon.

Preventing partnership disputes before they arise

Prevention is always better than cure.

Here are ten practical steps to reduce the likelihood of disputes:

1. Choose your partners wisely — entering into a partnership with someone that you don’t trust or get along with on a professional level should be a red flag.
2. Have the difficult ‘what if’ conversations at the outset — for example, discuss scenarios like client ownership if someone leaves.
3. Draw up a properly drafted partnership agreement — the importance of this can’t be overstated.
4. Try to avoid single points of contact for key clients — this discourages possessiveness.
5. Include post-termination restrictions — these help to prevent a partner leaving with a big chunk of the partnership’s business.
6. Plan for dispute resolution — consider mechanisms for resolving deadlock.
7. Carry out periodic partner reviews/appraisals — no one should feel that they’re immune from scrutiny.
8. Implement appropriate IT safeguards — protect confidential information where possible to prevent misuse.
9. Put financial safeguards in place — for example, require two signatures on the bank mandate for payments above a certain value.
10. Document key decisions — record meetings and other discussions in writing but bear in mind that such documents may be disclosable in court proceedings.

Responding when a dispute arises

If you think that a partnership dispute has arisen, here are some points to consider:

• Don’t ignore the problem. Get legal advice as early as possible — perhaps even before the dispute comes to a head.
• Consider whether partnership assets/bank accounts need to be secured — for example, by changing mandates.
• Protect any information or documentation that could be vital to supporting your case or potentially damaging if taken and misused by a partner. You may also need to consider regulating access to the firm’s premises.
• Avoid acting in haste when suspending or dismissing a partner. Ensure that there’s a sound legal basis for the action and that it can be properly justified at a later date.
• Be mindful of how your approach to a departing partner might influence others who may be considering their own exit. Are you trying to set an example?
• Explore whether a negotiated departure can be agreed. This is often done in conjunction with legal advice to ensure that you’re clear on the appropriate parameters of any negotiation.

Talk to us

Our expert commercial litigators and specialist professional services team resolve partnership disputes swiftly and effectively — whatever their type or complexity. With the strength, depth and experience across our team, we make sure that your dispute is handled in the most practical and cost‑efficient way possible.

Talk to us by calling 0333 004 4488, emailing hello@brabners.com or completing our contact form below.