Your Practice: Partners
How do I oust a partner?
Often when partners are not performing it is because the younger partners are not getting their ‘sweat’ money. The words ‘I did my time, so he’ll have to do his!’ are not uncommon from the older partners – times have changed and we need to ‘get over it’ quickly.
Keeping the younger partners today requires a different way of thinking andfirst and most common one is you must pay sweat money today. From where?From the existing profits, which means that if partners are no longermoving and shaking, then we need to underpay underperformers.
The partnership agreement needs to reflect this.
Other issues that I would suggest you deal with in the partnership agreement:
- Reduce capital accounts
- Get rid of Goodwill
- Ensure there are no retiring partners pensions that need to be paid fromfuture profits
- Introduce ‘Loan stock’ for all staff which can be valued based on turnoverthereby encouraging staff motivation etc
So, answering your question directly probably means changing the partnershipagreement to meet the demands of the current business.
If partners are unwilling to change, it would suggest that they are unwilling to ensure the long-term success of the business. Would you want to work for a business that is unwilling to change a partenrship agreement that is aimed at the long-term success of the firm?