Q: If an equity partner in a law firm screws up badly and the firm is sued - can the partners expel her and keep her stake?
This is for something I'm writing ( a work of fiction) and I'd like to have something with this situation: a lawyer who just borrowed a lot of money to become an equity partner in a law firm is sabotaged to accidentally reveal some very private client info to the wrong people. The lawyer and firm are sued - and the law firm settles - but I want the lawyer to be expelled from the firm and to lose all the money she put into the firm- does this sound possible? Legal? (like are there any kind of firm bylaws where if a lawyer screws up they can forfeit their equity rights?)
A:
The answer to this question will depend on form of the entity that is the law firm, and the organizational agreements associated therewith. A well-drafted Shareholder's Agreement or Partnership Agreement can spell out the particular circumstances under which an equity owner/partner can be removed without dissolution of the entity. No one will be able to tell you whether that is possible without reviewing the organizational agreements.
Good luck to you.
1 user found this answer helpful
A:
I agree with Mr. Pederson, but what concerns me is what your status is. Are you a researcher? Are you a journalist? Are you a student? Are you a law partner? Are you J.K. Rowling? Your question first says it is for something you are "writing." Then you state " I want the lawyer to be expelled from the firm and to lose all the money she put into the firm" Maybe you are just writing a work of fiction. In which case, there is no law that would require the result you are looking for in the situation you outline. Read some cases to see if law firms were allowed to do this.
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