This article is based on the book of the same title published by the authors in the United States. For international readers, specific references to local law, regulations and ethical standards have been eliminated. At the same time, the operation of law firms in other countries, including many in Europe, are similar. However, the authors urge readers to consider and follow the applicable regulations and laws of their own jurisdictions.
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The success of a law firm comes from good decisions made by the partners and many years of hard work. There were likely profits the partners could have taken out as compensation but rather chose to leave the funds in the firm to support its growth, largely to benefit the next generation of lawyers. As a result, fairness requires new partners to pay something for acquiring an ownership interest in the firm from those partners who are either retiring or reducing their ownership interest.