Did you know that there are more than 400,000 law firms in the U.S. as of 2022? With the complicated legal framework at the state and federal levels, many firms specialize in one area, such as corporate or tax. Many law firms are structured as a partnership, but what does this mean?
If you’re interested in the structure and benefits of law firm partnerships, read on to learn more.
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What Is a Law Firm Partnership?
A partnership is defined as a business relationship between two or more individuals, in which each partner shares in the profits that result. This structure is not unique to law firms, as other professions like accounting and architecture also use partnerships.
Law firm partnerships typically have an organized route to which a lawyer becomes a partner. Often, an entry-level lawyer begins as an associate, and the process to full partnership can take years.
Typically, the final step to becoming a partner is being voted into that position by the existing partners. Depending on the law firm, there could be several tiers to partners.
What Are the Duties of a Law Partner?
Law partners are the individuals who set the financial goals and operational procedures for the firm. For determining financial goals, this could include which clients and cases to take. The operational procedures are more vast but could include the following:
- Establish protocols and standards
- Managing existing relationships
- Training associates in handling cases
In law firms with different partnership levels, more experienced partners manage the other partners.
What Are the Benefits of a Partnership?
There are tax and strategic advantages to forming a partnership. The biggest tax advantage is that a business structured as a partnership doesn’t pay income taxes. From a strategic perspective, this organization reduces the workload and risks and makes raising capital easier.
Are There Multiple Types of Partnerships?
There are two major types of partnerships: general and limited. A general partnership is the most common, where all the partners share a stake in the profits of the company.
The other type is a limited partnership, with a partnership agreement dictating the responsibilities. The limited partners do not assume the same risk as the other partners.
How Can a Law firm Partnership Market Its Services?
However your law practice is structured, you need a good marketing service to promote your services. There are plenty of marketing companies out there, but you should look for a service that specializes in promoting legal services. For marketing your personal injury firm, there are companies experienced with strategies and getting results.
Are You Ready For the Services of a Law Partnership?
Now that you know about law firm partnerships and the benefits they offer, are you considering taking advantage of this structure? Each law firm is unique and the structure must be agreed upon by all the individuals who will serve as partners. No matter how you structure your partnership, hire an experienced marketing company.
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