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I would never join a firm that does this.

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There’s all sorts of things you can do to juice profits if you don’t really care about the company surviving more than 5-7 years.

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This is insane.

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can anyone tell a lowly non corporate person what this means for us as associates

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Leave. If I heard that a firm that I was at had even considered something like this, I would immediately leave. You should too. Start applying elsewhere ASAP, if you ask me…

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“It is difficult for private equity and other funding types to invest in law firms in the US due to stringent laws that restrict non-lawyers from owning law practices.”

I’m confused how they’re getting around this?

They’re planning to use the model that also gets around the corporate practice of medicine. You set up a Management Services Organization that provides “management/administrative services” via a mutually exclusive Management Services Agreement. Compensation is structured as a percentage of firm profits. Usually it coincides with an amendment of the governing documents of the “captured” firm to impose things like restrictions on transfers. In the physician practice model they usually also install a “friendly physician” owner of the captured org but I don’t anticipate that happening here.

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