New Partner/Shareholder/Member Admittance

Allowing someone to own a part of the firm is a big decision and it is important to get it right. The decision steps include figuring out how much equity to make available and at what price. Existing owners want to understand the impact of sharing more ownership. Other considerations include debt guarantees, assumption of contractual obligations, compensation, and the adjustment of equity interests among existing owners.

Many of our clients are admitting new owners for the first time and need assistance a process to ensure that experience is positive and financially sound. Other clients already have a process but need objective advice about one or more of the critical factors. We have extensive experience helping firms admit new equity owners and focus on a fair and positive process.

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Benefits

What can you can gain from outside help when you want to admit a new owner and what can PerformLaw do for you?

The Process

How does an equity owner admission engagement work?

Resources

Where can I learn more about the topics I might want advice about?

Benefits

The confidence of knowing you will receive knowledgeable feedback.Clients who engage us to help admit new owners get objective, experienced, and practical advice about the best way to admit a new partner. We do the math, we learn the short and long term concerns of our clients, and we focus on keeping the process moving.

The ability to streamline the process steps and leave more time for strategic considerations. Use of our tools, templates, proven processes, and management expertise are included in the engagement. We provide our clients with the analysis, tools, and advice to make good decisions quickly.

A solution for the long term. All our engagements are designed to raise the level of in-house competence and promote self-sufficiency. Wherever possible, we try to create repeatable processes and recommended policies.

The ability to continue to focus on your daily responsibilities while we focus on the analysis and process. Successful lawyers are busy and must focus on client priorities. We can help you and your management keep the process moving and orderly.

What PerformLaw can do for you:

  • We help clarify and communicate expectations before and after admission.
  • We provide easy to understand analysis and processes tools
  • We provide supporting policies and explanations to ensure long-term success.
  • We help identify and address issues quickly.
  • We are available when clients need us; before, during and after an engagement.

THE PROCESS

INITIAL DISCOVERY & INFORMATION REVIEW

Income Statement and Balance Sheet

Prior and Current Year

Current Accounts of AR (Accounts Receivable) and WiP (Work in Progress)

Timekeeper Statistics

Prior 2 Years (preferably 3 Years)

Origination Statistics

Workload Distribution

Last 2 Years (preferably last 3)

By Originator with Working Timekeeper Detail

By Billing Timekeeper with Working Timekeeper Detail

Historical Compensation

Last 2 Years (preferably last 3)

Current Equity Group

Lawyers Under Consideration

Current Compensation System Detail

Operating/ Shareholder/ Partnership Agreement

COMPENSATION SYSTEM ANALYSIS

Existing Comp Plan

Create Model with New Partner(s)

  • Testing Various Scenarios

Recommended Alternative Comp Plan

Create Model with New Partner(s)

  • Testing Various Scenarios

INITIAL EQUITY ANALYSIS

Evaluate Any Existing Policies

When Compensation Is Tied To Equity

When Compensation Is Not Tied To Equity

Adjustment Of Equity - Existing Owners

Equally

Proportionately

Specific

Future Adjustments

BUY-IN ANALYSIS

Choose Method

Book Value Per

Book Value + Good Will

Stated Amount

No Buy-In/ No Buy-Out

Partial Participation

Full Participation

Cash Flow Models

Duration of Buy In/ Buy Out

Changes in Capital

Collaboration with Firm's CPA regarding Tax and Capital Accounts

OPERATING/ SHAREHOLDER/ PARTNERSHIP AGREEMENT CONSIDERATIONS

Advice Regarding Existing Provisions

New Provisions

Collaboration with CPAs and Attorneys

Resources

NOT SURE WHERE TO BEGIN?

Here are some of our most helpful resources to learn more about ..........

Knowledge Base

BLOG

Resources