Thursday, May 24, 2007
A law firm partnership agreement was amended by majority vote in a manner that impacted on compensation to withdrawing partners. The New York Court of Appeals upheld an Appellate Division decision holding that the amendment was proper because "the agreement, by its terms, unamiguously permits amendments thereto by majority vote."
Former equity partners at Fish & Neave, an intellectual property firm that has since merged with Ropes & Gray, had sued both firms after the firm had changed its accounting system in a manner that affected the compensation due to departing partners. The change had been implemented to attract potential lateral partners or a merger opportunity. Two lawyers who left after the amendment had been passed sued claiming, among other things, that the amendment should be invalidated. The court held that the amendment was properly implemented by majority vote because the agreement clearly provided that all partnership questions be resolved in a such a manner. (Mike Frisch)