Law Firm Buy-Sell Agreement Template

This Buy-Sell Agreement ("Agreement") is entered into on [Date] by and among the partners/shareholders of [Law Firm Name] (the "Firm").

1. Purpose

• Provide mechanism for orderly transfer of ownership interests upon triggering events while ensuring continuity of client service.

2. Triggering Events

• Voluntary withdrawal or retirement.
• Death or permanent disability.
• Termination for cause (ethical violations, misconduct).
• Bankruptcy or insolvency.
• Expulsion under partnership agreement.

3. Purchase Obligation and Option

• Firm and/or remaining partners obligated or granted option to purchase departing partner’s interest upon triggering event.
• Order of priority: Firm first, then remaining partners pro rata.

4. Valuation

• Valuation method: [Formula based on average compensation, capital account, percentage of collections, independent appraisal].
• Timing of valuation (effective date) and valuation adjustments (outstanding receivables, WIP, liabilities).
• Provide example calculation in Schedule A.

5. Payment Terms

• Down payment amount and schedule (e.g., 20% within 30 days).
• Balance paid over [Number] years with interest at [Rate]%.
• Security for payments (promissory note, collateral).

6. Insurance Funding

• Life and disability insurance policies held by Firm to fund buyout obligations.
• Provisions for policy ownership, premiums, beneficiary designations.

7. Non-Competition and Client Transition

• Departing partner agrees to cooperate in transitioning clients, files, and open matters.
• Non-solicitation of Firm clients and employees for [Number] months, subject to ethical rules.
• Client choice honored; provide release process consistent with professional responsibility rules.

8. Covenants of Departing Partner

• Return of Firm property, books, records, and confidential information.
• Assistance with billing, collections, and ongoing matters during transition period.

9. Dispute Resolution

• Disputes regarding valuation or terms resolved through mediation followed by binding arbitration if necessary.

10. Amendments and Review

• Agreement reviewed annually; amendments require [percentage] vote of equity partners.

11. Miscellaneous

• Governing law, severability, notices, counterparts, binding effect on heirs and assigns.

Signatures

Partner: ____ Date: __

Partner: ____ Date: __

Managing Partner: ____ Date: __

Attach schedules for valuation methodology, insurance policies, and payment examples.