Friend and I who went to law school together want to go into practice together (specifically, COA/HOA collections); however, she is not licensed, yet. I am. She would be working the same as I, just unable to give advice, file, etc. (all the things that require a license). Our deal would be that upon her licensure, she would get a percentage ownership of the firm (probably 49-50%). However, I litigate, and would anticipate bringing on cases to the firm outside of just HOA/COA stuff. (Cont’d)…

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Just wait! Handle your own cases until she’s ready to practice.

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These non-HOA/COA cases would be primarily handled by me. My concern is that I would be building a name and equity from those cases, plus I’m taking on all the risk and liability (and the main responsibility since it’s my license tuning the line). Any ideas on how to structure this? What if she doesn’t pass the bar? What if my cases build the equity more than the HOA/COA cases? How do I approach that fairly? Any help or suggestions are greatly appreciated!

You’d potentially hire them as a clerk, until they pass the bar, then they can be promoted to an equity partner. At that time, you can structure it in a way so that you respectively get different percentages of profit depending on who generates the business, who does the work, etc.; but, I think you need a lot more groundwork than what is provided above.

Don’t forget to check your local ethical rules/professional rules of conduct and applicable state law (ie your friend’s name can’t be on the door prior to being barred, etc.). I have so many thoughts on this, but, perhaps of most importance: malpractice insurance (!!!!)

Consider working for a solo/boutique firm while you’re waiting on your friend to finish LS/pass the bar. This would allow you to get an inside look on what managing a small firm entails, how it functions, what it requires, best practices. It is A LOT of work beyond legal and I really don’t know how ppl do it. I only worked at a small firm pre-LS and learned so much about the mgmt end (think: bank accts—escrow, iolta, taxes, operation, collections, fees, engagement letters, required policies, partnership agreement, what happens when one wants out, etc.). Post-LS, I left small practice behind but trying to toss out anything that immediately comes to mind.

A lot to think about. Heed with caution and triple check every step. It would likely be good to reach out to other solos for insight and hear about their experiences, especially how they just got started (consider hiring someone experienced to assist with back-office stuff as a manager). There’s prob a bowl for solos tbh and, if so, that’s be worth checking out.

Good luck, and be careful!

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