12 Warning Signs You’re Headed for a Lawsuit with Your Partner-Part 8
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.