Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. Our firm is a 5 attorney firm in Detroit with three partners and two associates. The three partners are 79, 72, and 67 respectively. All three are considering succession and exit options. While internal succession is an option the firm has had a few merger chats with larger firms - on isolated unplanned occasions. We are having problems getting focused and generating interest from other firms. Is there a suggested process and or documents that we should prepare to generate interest and properly package our firm?

A. I suggest that you start by preparing an offer package that can be provided to other firms that you may approach directly or indirectly. A good offer package consists of the following:

1. A firm profile (without identity for some presentations)
2. Nondisclosure Agreement
3. Detained Offering Memorandum (Confidential Descriptive Memorandum)

The Offering Memorandum

Tells the firm's story

Provides relevant facts other firms want to know including:

Make no mistake, this is not the workers' comp act you knew two months ago. Rich Hannigan's article in the August Illinois Bar Journal highlights key changes to the law, many of which take effect next month.

The Illinois Supreme Court has announced that retired Associate Judge Charles J. Gramlich has been recalled to duty in the 7th Judicial Circuit. This appointment was required by the recent death of Judge Lois Bell. This recall is effective Aug. 1, 2011, and terminates on Dec. 3, 2012.

A recent upgrade of the Illinois Lawyer Now site comes with three main improvements. First, members can now comment on posts and the comments can be viewed by anyone visiting the site. The login to comment is the same that members use on the main ISBA site (ISBA.org). The photo gallery has been upgraded to include a slide show and provide a much better viewing experience. Another improvement is the addition of an archive search on the left hand column of the page. This allows members easier access to past stories on Illinois Lawyer Now.

Thank you for visiting the site.

ISBA Director of Legislative Affairs Jim Covington reports from Springfield on two family law bills recently signed into law: (PA 97-189)-Penalty for False reporting of child abuse or neglect enhanced to a Class 4 felony and (PA 97-186)-two changes affecting past-due child support.

You just don't get Twitter, you say? You're not alone. But many of your colleagues, including some who shared your skepticism, are using Twitter to reach out to fellow practitioners, communicate with the public, and make themselves better lawyers. Read all about it in the August Illinois Bar Journal.

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the senior partner in a six attorney firm in Los Angeles. I am 68 years old and thought that it was  about time I begin thinking about retirement and begin discussions with my other partners. We have no partnership agreement and no plans in place to effect the transition of partners. What are some of the methods being used by law firms effect the retirement of partners?

A. There are almost as many approaches as there are law firms - ranging from partners that just leave and give their practices to the others partners to various methods for buying out the departing partner's interest in the partnership. In the final analysis the optimal approach is what makes everyone happy and a solution that everyone can live with. Here are a few illustrations:

 Fully Funded Retirement

• Partner gets capital account
• Share of current year earnings
• Benefits from the partner’s personal retirement plan
• No payment for share of WIP or AR

50 Percent Wind Down Option – Then Retirement Payments For Live

• Five year step-down plan in lieu of payoff
• Partner get capital accounts
• Share of accounts receivable
• No share of WIP
• Five year stepped pay down to 50%, then for life one-half of 5th year payout.

Pension For Live