Welcome to Part 8 in a 12-part series entitled “12 Warning Signs You’re Headed for a Lawsuit with Your Partner”. The eighth warning sign is …
#8: Not using lawyer or using inexperienced lawyer to handle documentation of deal
In addition to creating the partnership agreement, we litigate partner disputes. All too often, the partner disputes we see in our office arise as a direct result of poorly drafted partnership agreements (remember, when I say “partnership agreements”, I am also including limited liability operating agreements and corporate partnerships). Those defective agreements were usually drafted by non-lawyer clients (often by pulling some form off the internet without having any idea how good that form is or whether it adequately addressed their unique partnership terms and conditions, concerns, needs, objectives, and fears) who were trying to save a buck (on transactions involving millions of dollars no less!) or by lawyers who were “dabbling” outside their core area of expertise. One lawsuit we litigated involved this exact situation; the legal fees far eclipsed whatever money that client may have “saved” by not having an experienced lawyer prepare their agreement. Solution: Always, always, always hire a competent lawyer to draft these important documents. The investment will pay for itself many times over in the savings you will hopefully realize in not having to pay a litigator later to prosecute or defend against a lawsuit.
If you are entering a partner or joint venture relationship of any kind, whether it is an LLC, corporation, general or limited partnership, call us. We can set it up to minimize the risk of future disputes. If you are having challenges with a current partner, call us. We may be able to help you resolve your dispute and avoid a lawsuit. If litigation with your partner is inevitable, we can handle that as well. If you’re not sure if your agreement is properly drafted to minimize your risks of future dispute and/or to adequately protect you in the event of a future disagreement, call or e-mail us to learn about our special “Partnership Agreement Audit” offer. For more information, call Jeff Lerman at 415-454-0455 x234 or e-mail him at [email protected].
