During the past 15 years, I have had the opportunity to read and analyze nearly 150 partnership agreements, and it always amazes me how outdated and inadequate so many of them are.There are basically two major reasons for this. First, many firms just fail to give adequate attention to their partnership agreements. Second, over the years, the firm may have modified its original agreement or made separate agreements as new partners entered, and these agreements are significantly different from one another. None of the agreements have been consolidated into one current agreement.

This type of environment sets the groundwork for future legal problems. Several years ago, it was estimated that over half of all small and midsized accounting and law firms lacked adequate agreements. I don't know what the percentage is today, but I imagine that it has not improved much.

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