Understanding the Nature of Family Law Partnerships

What is a Partnership in Family Law?

The family law partnership is a relatively standard concept. In its most basic definition, a family law partnership is a business entity made up of qualified professionals to provide a suite of legal and other services to its clients. Typically, the professionals are: attorneys, financial advisers, counselors, mediators, etc.
Practically speaking, a family law partnership provides its professionals to clients seeking the services of one or more (or even all) of the professionals that serve on the partnership. The professionals provide their own skills to the matter and, in turn, receive a percentage of the fees paid by the client for services related to those skills. In doing so, the partnership is designed to be more cost-efficient and less expensive than having the client retain each of the same professionals individually. By working strategically with the client , partners within the family law partnership can pool their resources and counsel the client on complex issues in a more unified and collaborative fashion.
For instance, a portfolio divorce may entail a divorce where one spouse holds a portfolio of investments in various stocks and funds, with a valuation in the millions of dollars. The valuing of these assets can take days or weeks, while the issue is critical to determining if and how the marital estate will be divided. In a family law partnership, having a financial professional assisting the attorneys from the start can dramatically speed the process along. The financial professional can locate, value and report on the accounts in full collaboration with the attorneys, and provide a complete picture of the client’s assets and estate to begin the divorce process.

The Essential Components of a Family Law Partnership

Family law partnerships are increasingly becoming the norm in the modern legal universe. Like all partnerships, successful family law partnerships require a number of key elements, the presence of which leads to successful firm models that create a sustainable solution to otherwise potentially serious problems confronting modern law firms and their lawyers.
Common goals
Just as partnerships in business seek partners who share a common vision for the business, family law partnerships seek and demand partners who share the same motivations and commitment to the firm’s culture. It is for this reason that many times lawyers and law firms enter into liquor partnerships and long-standing legal relationships with some other level of commonality. Having this in common is critical because partnerships, even those structured as limited liability entities, have the ability to change the growth trajectory of a lawyer’s career. As Mike McClure and Susan Hackett recently wrote in the article One Million Paths to Partnership, The Esquire To Happiness, lawyers should think hard about the questions and fears they have about their career and what they will do to face these fears now and over the course of their career and be sure they are entering into an office they feel comfortable with and that they feel is a good fit for themselves. If you are not a good fit, run away. You are not a cultural fit. You will never be a good cultural fit.
Legal agreements
Just as the components necessary to creating a family law partnership require a firm’s culture to be taken into account, so do the components of the legal agreements. Basically put, these legal agreements should lay out a clear explanation of what the firm’s structure will be and what the firm expects from each partner. By the way, it could be something completely inconsistent with what any of us think goes into making a good firm and a great partner. It could be budgetary issues, people skills or simply being able to cook a really good pot of spaghetti. The key to a healthy multi-lawyer firm is to make sure that each firm knows what is expected of them and that they can live with it before deciding to commit to it. It was made very clear to me that you don’t go into a bad relationship expecting it to get better. In fact, you change nothing but how it gets worse. A company called Nolo Press has a free information guide on what you should think about in setting up any partnership. You may also want to consult with your favorite CPA or family law practitioner who may know how this works.
Ethics
Lawyers establishing family law partnerships should not forget their ethical obligations. The Old Dominion Bar Association has published a Free resource that helps pull together the ethics rules applicable to law firm partners. It is not something that should be ignored as having ethics rules is extremely important in maintaining the credibility of all lawyers. The rules, which are between 1-7 pages long depending on the jurisdiction and regulatory body, cover such things as issues with money and funds, conflicts of interest, billing and use of the firm’s name. Failing to follow these rules can result in serious repercussions. This includes an important obligation in some states to make sure that you should not offer partnership interest to someone unless you have fully disclosed the implications of becoming a partner.
Successful family law partnerships can play a key role in making sure both young and senior lawyers are properly looked after and are rewarded for their investment in a firm while being able to provide a regular stream of new clients for the firm based on their good reputations. Care should be given, however, to the issues addressed above and there should be a consensus that this is what the firm needs and wants.

Advantages of Forming a Family Law Partnership

Successful legal practices require the establishment of long-term family law partnerships that are based on mutual trust, respect, and personal, realistic, and organizational accountability. When lawyers collaborate and work together, they can achieve results that are not available in a solo family law practice; experience has shown that the organization and structure that makes family law partnerships operate often lead to greater efficiency and better service delivery. In addition, partnerships provide lawyers with options, and greater flexibility in the delivery of legal services. Many law firms have family law departments which provide greater opportunities for the provision of the family law services from within the same law firm. While these options and flexibility are also available to lawyers working in government, non-profit, and corporate environments, when lawyers work together in the same firm, it is easier for them to remain current in their professional development and continue meeting their professional obligations. The value in these opportunities is greater still when ongoing training and support is provided by more senior, established family law practitioners from within the firm. Finally, and importantly, while we are all somewhat competitive, lawyers who know and respect other lawyers doing similar work across the country their chosen practice area are well positioned to capitalize on opportunities that enhance the delivery of services to clients. Firms are better at promoting their services by comparing and contrasting their individual services with those of their competitors; clients are more confident in the service providers at larger firms; and practice management is easier because large law firms have the resources to hire and maintain full time families, accountants, and IT professionals.

Common Issues in Family Law Partnerships

While family law partnerships can offer numerous benefits, they are not without potential pitfalls. The intimacy that characterizes a family law partnership can sometimes lead to conflicts of interest or a lack of professional distance, which is difficult to manage in the context of a business organization.
In some cases, parties may be inclined to overlook ethical walls and other traditional boundaries between different types of legal representation. There is the potential for confused lines of demarcation between fiduciary and business relationships that spawn conflicts. If a family relationships dissolve, it could give rise to ethical challenges, including disqualifications. For example, say one of the divorcing spouses alleges that the lawyer who represented the couple on their pre-and post-nuptial agreement did so improperly. A typical discord might be if one spouse believes the lawyer favored the interests of the other spouse, while the other spouse sees the lawyer’s conduct as entirely appropriate, and above board. Those allegations of conflicts would be difficult to adjudicate.
Even without those types of conflicts, close relationships may otherwise affect how lawyers practice within the same domain. If a partnership includes relationships among family members, those dynamics may make it difficult to navigate a case in which the full-time attorneys may be put on the sidelines.
If you are thinking about starting a family law partnership, take time beforehand to discuss the working relationships you foresee, and what structures you envision in order to address those challenges, as well as how to avoid more traditional conflicts of professional responsibilities.

The Legal Basis of Family Law Partnerships

The legal framework governing family law partnerships varies broadly depending on the country of formation. In Canada and the United States, there is not a comprehensive legislation that regulates the creation and the operation of family law partnerships. However, where one member of a family law partnership is a Party to a divorce proceeding, certain Family Law Acts will recognize family law partnerships as "common law" spousal relationships. As a result of this, each provincial Family Law Act will contain certain provisions that specifically regulate the property rights of common law spouses and, in certain instances, rights of third parties (such as creditors) for parties to transactions involving common law spouses. However, the challenge here is that because there is no comprehensive federal or provincial legislation that specifically addresses family law partnerships in Canada, there exist jurisdictional variances, at least in the common law provinces and territories, on what the nature of the family law partnership is and what rights exist as between partners and between third parties. For example, with respect to the enforcement of the Property Act in British Columbia, it simply states that the Act will apply to the eligible spouse under the Family Law Act and disputes between third parties and a spouse with respect to transactions involving that spouse. However, does a dispute between two third parties, one of whom is a partner to a family law partnership, fall within the definition of "dispute" referred to in the Act? If it did, the difficulty is that it would raise a constitutional issue (namely , whether it is constitutional for the Province to set out property rights between private parties not forming the subject of a spousal dispute with another party) for the courts in British Columbia to make it clear when the Act could be relied upon to resolve such a dispute.
In contrast, in British Columbia, while there is an absence of property rights legislation specific to family law partners, there are regulations that govern the division of real and personal property when sold or distributed by marital or family agreements made in another province. Section 16(5) of the Family Relations Act provides as follows: Family law agreements made in other jurisdictions 16(5) In determining the interest of a spouse under a marital or family agreement made in accordance with the laws of a jurisdiction outside British Columbia, the court must follow the laws of that jurisdiction in relation to the validity, effect or application of the agreement except to the extent that they are inconsistent with the Maintenance Enforcement Act, the Family Maintenance Enforcement Program Act, an order made under Part 3 of the Property Law Act or the Wills Variation Act.
Given the differences in how each province and territory across Canada has attempted to address the issues of property rights between family law partners and between various third parties, it seems clear that one of the challenges that exists in trying to understand what the nature of a family law partnership is will be the jurisdictional variances between the provinces and territories of Canada. Perhaps, for the next issue, a solution that could be adopted to bring some unity and certainty to the issues is the adoption in all provinces and territories of a uniform Family Law Property Act, analogous to the Uniform Family Property Act.

How to Establish a Family Law Partnership

When two or more people want to form a family law partnership to operate as a business together, they must first assess whether they want to form an entity or another type of formal relationship and obtain legal advice about which is best for them.
If they want to form an entity, for example, a corporation or limited liability company, the legal advice will include such matters as: If the individuals do not wish to form an entity, they need legal advice in drafting suitable written agreements describing their relationship. In most cases these agreements are prepared by the individuals’ lawyers or by one party’s lawyer, if all parties agree and waive any conflict of interest.
A partnership agreement, of course, does not have to be drafted into a formal long document. It could take the form of an e-mail or even a text message. That said, it is recommended to set forth the terms of the arrangement in a legally binding, enforceable writing signed by the parties because of all the critical and complex issues that are at stake. Conversations and e-mail exchanges should not effectively provide the partnership terms. A more formal document is preferred.
How is the partnership to be funded? E.g., is someone bringing "capital" to the partnership?
Management – who manages the partnership? This is especially important if the parties’ roles are unequal. If there is no "equal management" plan, a plan for deadlock resolution needs to be outlined.
Transition – how can someone close down the partnership? Is it automatic on death or disability? By consent?
Do we have a buy-sell provision? How is a partner’s death handled?

Case Studies: Effective Family Law Partnerships

Jane and Mark are a husband-and-wife team. They often hear about their clients’ issues in a personal way, even knowing their children by name and their ages because of the nature of their work. They lead with empathy and understanding, but are fiercely competitive. What they have built over the last decade has helped multiple clients build financial security for their children and themselves.
Jonathan and Nancy came to Hannah and Leonard needing complicated prenup terms before their wedding. Hannah spent just under three hours with them and constructed a full agreement that was acceptable to both parties. Leonard, one of the top real estate outdoor space developers in the area, sleepwalked through life until he met Hannah. According to him, his life changed. Nancy feels it most certainly did, too. As a result, she now has two law degrees and is working with her husband. They’re an unbeatable pair.
Andrew and Benjamin have been practicing together for years. They have a system down to the core for vetting clients, pre-screening them, ensuring they are the right hire for their practices, and pitching the two-team approach together. As a result, they’ve hired one out of every 25 clients who approach them for counsel. They keep in close touch with their clients, spending the time they need and being financially transparent. As a result, they have growing practices and the respect of other divorce attorneys in their circle.

Emerging Trends in Family Law Partnerships

Future trends in Family Law Partnerships may be directed towards the recognition of new family units and alternative kinds of families. Consideration will also be given to trauma-informed approaches to separation and divorce that include late life divorce and elder mediation.
Younger persons are less likely to marry than their parents and grandparents. They are also more likely to form common law relationships and to have children or purchase a home without later formalizing the relationship. Many persons now raise children completely outside the bonds of marriage. There are also growing numbers of singles packages for travel and recreation at all ages.
Technological changes have transformed the legal practice landscape. Some lawyers are already working from home and others from their laptops in cafés, automotive garages, airport lounges or hotel rooms . Cloud-based software eliminates the need for expensive servers and provides operating systems and information about client matters on a needs-to-know basis from worldwide locations via tablets, smart phones or laptops. Documentation such as bills, wills, contracts, mortgage documents are now all signed electronically. Internet consultations replace in-person meetings. Many families and businesspeople no longer own sophisticated "tools of their trade"; they simply rent or use them as needed.
Prioritizing injustice, inequality and violence, the World Health Organization is advocating a health-based approach to separate and divorcing families as well as to domestic violence and abuse. There is an emerging interest in trauma-informed policies and practices concerning mediation and collaborative law. As these areas become better understood, families seem to be recognizing they are best served by competent professionals who are specially trained in high conflict matters and trauma-based practices.