Best Practice: Should capital contributions be required for new equity partners?
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am the sole owner of a 25-attorney litigation boutique firm in Los Angeles. I am the only equity partner with nine non-equity partners and 15 associates. I am concerned that if I don't provide a path to equity partnership, some of my senior talent may gradually defect to other firms or split off to create their own firms. I also believe that providing a path to equity partner for deserving non-equity partners is the right thing to do. Therefore, I am planning on admitting two non-equity members this year. Should I require capital contributions?
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