Trial Period for Potential Partners of Professional Services Firms
The partners of a professional services firm should be sure to establish detailed procedures for the admission of new partners. A full discussion of the procedures for admission of new owners to a partnership or limited liability company is provided in the chapters covering Issuance of Partnership Interests (§ 50:3) and Issuance of LLC Ownership Interests (§ 61:1) in Business Transactions Solutions on Westlaw Next. While most of the procedures discussed in those chapters apply to professional services and limited liability partnerships, it is obviously necessary to take into account the need for new owners to satisfy applicable professional standards and requirements. One method sometimes used to ease the transition to ownership status is an agreement for admission of an associate to a professional partnership that covers the duties and responsibilities of the associate for a specified trial period prior to an agreed date that the association is promoted to partner status. During the trial period the associate may even be allowed to share in the profits of the partnership as part of his or her compensation package. It is typical for the parties to include non-competition provisions that would be applicable following the termination of the associate’s relationship with the partnership. See Specialty Form at § 55:152 of Business Transactions Solutions or contact email@example.com for a complimentary copy.