Adding a partner or associate to your professional practice.

ABSTRACT

Written partnership agreements, employment contracts and related documents may seem to complicate what appears to be a straightforward arrangement, and can make a close relationship somewhat more impersonal. The decision to add a partner, however, is fundamentally a professional and business consideration, and raises many economic and practical issues that either aren't initially apparent or which may only become relevant after the passage of time. In addition, the tax laws may cause two seemingly similar approaches to have significantly different results. It is worth the time and effort to think through your objectives and the price you are willing to pay to realize them, and to recognize that your new associate will have some legitimate concerns that need to be addressed. A well thought-out written arrangement will provide both of you with a degree of certainty and the comfort of knowing that you and your associate have the same understanding of your common venture.