I’ve counseled hundreds of partnerships and I’ve been a partner in at least 4 different businesses. Partnerships come with substantial risk because human relationships are dynamic, and sometimes unpredictable. There are clear fundamentals to a strong partnership which are discussed in the various other articles found on this blog, however, the most critical aspect of all of this is having your own personal exit strategy from the beginning. That means, asking yourself how you’ll be able to transition out of the partnership if things don’t work out the way you intended. I believe this entails at least the following:
- access to books and records of the company
- access to accounting records of the company
- access to bank accounts of the company
- maintaining client contracts/engagement letters for each of your client matters including contact information and copies of all of your client files
- protecting your intellectual property rights i.e. the intellectual property you created and brought into the partnership
- protecting your client relationships
By having access to or control over the things listed above you at least set yourself up for a smoother transition in the event your business partner leaves the business (regardless of the reason). For me personally, I’ve been in a situation where a former business partner left the business to pursue other opportunities at a different firm. The impact was minimal because I had access to all of the company’s financials, had copies of all of my client records, and cultivated relationships that mattered the most for my transition into a new partnership.