In partnership litigation, a partnership lawyer who specializes in the intricacies of partnership law is a must for partners who are at each other throats. Partnership litigation, including corporate shareholder lawsuits, limited liability member lawsuits and even family co-owner lawsuits, has both a complex legal component and a highly charged emotional component.
Retaining a lawyer who specializes and has experience in partnership litigation can make a decided difference in the outcome of the litigation.
Does Your Attorney Have Partnership Law Expertise?
Lawsuits between corporate shareholders in small companies are essentially partnership fights in the context of a corporate setting. In other words, the partners have chosen to conduct their business through an incorporated entity but the various decisions and arguments that plague other partners are just as present in a corporate dispute.
Corporate shareholder disputes are governed by the California Corporations Code and the well-developed case law regarding corporations. Because this is an area of the law that many attorneys do not usually get involved with, attorneys with prior experience in corporate disputes can be a huge advantage.
Lawsuits which center around partnerships that are not incorporated can be just as complex. Unincorporated partnerships, whether general partnerships, limited partnerships or limited liability companies, all have rules to follow.
Family members who co-own property or the family business may not be subject to the Corporations Code, but will have the same issues as unrelated business partners—and then some. Lawyers who do not regularly handle partnership lawsuits may not have the expertise or experience to recognize the applicable statutes or case law.
Does Your Attorney Have Common Sense?
Oftentimes partnership lawsuits degenerate into vicious spats. That is to say, partnership fights are rarely settled based on a rational evaluation of the costs and benefits of the proposed transaction. Pride, anger, betrayal and hurt are more common motivators in a partnership battle.
A partnership attorney who understands the legal elements of the case but not the emotional elements may end up making matters worse.
It is very common for profitable partnership businesses to get crushed by attorneys fees and lawsuit paralysis as the disaffected partners engage in a battle where no one, in the end, will win (except the attorneys).
What may have been a cash cow can be destroyed as the partners bicker and attack each other. Does your attorney encourage this? Or do you have a full analysis of the legal and factual strengths and weaknesses of your case? Do you know how much the litigation will cost and how long it will take before you can get back to business?
Most importantly, the business attorney should be a trusted adviser who can tell you what you do not want to hear. Trial attorneys, of course, must walk a fine line. The client demands a pit bull lawyer who will tear into the opponent and leave him wounded and barely alive.
Many attorneys are happy to take this approach. And that approach can be called for when necessary. However, many attorneys take this approach even when a reasonable settlement is possible. This may prevent you from reaching a mutually beneficial resolution.
The Experienced Partnership Attorney as Therapist
A partnership attorney must have an understanding of the emotions of the parties. Partnership litigation cannot be separated from the feelings of betrayal and hurt. The trial attorney must understand this on a number of levels.
First, the attorney must understand what the client really wants and what trade-offs he or she is willing to make to get there. It would be nice to destroy and humiliate the ex-partner but the real goal may be to preserve the business that pays the bills and feeds the family.
The client is often fixated on extracting revenge or an apology from the ex-partner when really the better result would be to get the ex-partner out of the picture as quickly as possible—for both financial and emotional stability.
Lastly, the experienced partnership attorney must have the ability to get an emotional client to set aside the anger and hurt in order to focus on either winning the case or reaching a beneficial settlement.
Partnership litigation is expensive and emotionally draining. Depositions, trial and mediation can cause anxiety. Time spent in litigation is time not spent building the business. And money spent on lawyers is money not spent on retirement or vacations. An experienced partnership attorney can be the decisive factor in getting a good result in partnership litigation.
Laine T. Wagenseller specializes in Partnership and Shareholder Litigation in Los Angeles and Southern California. Attorney Wagenseller is the founder of Wagenseller Law Firm. The firm has handled numerous family and business partnership trials and lawsuits.