Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the senior partner in a six attorney firm in Los Angeles. I am 68 years old and thought that it was  about time I begin thinking about retirement and begin discussions with my other partners. We have no partnership agreement and no plans in place to effect the transition of partners. What are some of the methods being used by law firms effect the retirement of partners?

A. There are almost as many approaches as there are law firms - ranging from partners that just leave and give their practices to the others partners to various methods for buying out the departing partner's interest in the partnership. In the final analysis the optimal approach is what makes everyone happy and a solution that everyone can live with. Here are a few illustrations:

 Fully Funded Retirement

• Partner gets capital account
• Share of current year earnings
• Benefits from the partner’s personal retirement plan
• No payment for share of WIP or AR

50 Percent Wind Down Option – Then Retirement Payments For Live

• Five year step-down plan in lieu of payoff
• Partner get capital accounts
• Share of accounts receivable
• No share of WIP
• Five year stepped pay down to 50%, then for life one-half of 5th year payout.

Pension For Live

Lawyers are increasingly receiving emails from alleged potential clients who supply legitimate looking but bogus checks and then develop reasons why some or all of the money has to be wire transferred to institutions or individuals who are usually in foreign countries.  We expect these fraudulent activities to continue and we want to help our policyholders avoid these situations. While the checks are transmitted in a way that appears to be legitimate, they routinely turn out to be bogus.

The same scenario is common with each of these scams. The law firm receives what appears to be a cashier’s check drawn on a legitimate domestic or foreign bank from a prospective client for a legitimate sounding business purpose. The law firm deposits the check in their client trust account. Almost immediately, the firm is besieged by the prospective client with urgent requests to wire transfer some or all of the proceeds of the check to banks or other recipients usually in foreign countries for legitimate sounding emergency needs. The original check turns out to be bogus.

The Illinois Supreme Court announced today that David A. Brown, received a majority of the votes cast by the circuit judges in the Tenth Judicial Circuit and is declared to be appointed to the office of associate judge.

Mr. Davis received his undergraduate degree in 1986 from Purdue University in Lafayette, Indiana and his Juris Doctor and M.S. in 1990 from Indiana University in Bloomington, Indiana. Mr. Brown is currently affiliated with Black, Black & Brown in Washington, Illinois.

"Understanding the Juvenile Justice Process" and "Alternatives to Juvenile Detention," two half-hour programs presented by Illinois Law, will air on Chicago Access Network Television, Channel 21 in Chicago in August. Understanding the Juvenile Justice Process will air at 10 p.m. on Tuesdays, August 2 and 16, and Alternatives to Juvenile Detention will air at 10 p.m. on Tuesdays, August 9 and 23.

Appearing on the shows are (from left) program moderator Samuel A. Kavathas, of Kavathas & Castanes in Chicago; Kaitrin E. Valencia, deputy chief, Cook County Juvenile Probation Department; Hon. James M. Radcliffe (Ret.) of Belleville; and ISBA Immediate Past President Mark D. Hassakis, of Hassakis & Hassakis, PC, in Mount Vernon.

Illinois Law is a cable production of the Illinois State Bar Association. View these programs and past Illinois Law programs online at iln.isba.org/blog/illinois-law-video.

The 33,000-member ISBA, with offices in Springfield and Chicago, provides professional services to Illinois lawyers, and education and services to the public.

Illinois State Bar Association members are being offered up to a 50% discount on tickets to Cirque du Soleil's OVO. OVO is an acrobatic immersion into the teeming and energetic world of insects. This performance is at the Grand Chapiteau at the United Center parking lot, 1901 W. Madison. The show runs through Aug. 14.

View discounts and purchase tickets.

Questions regarding this offer can be answered by calling customer service at (800) 331-6483.

ISBA’s Director of Legislative Affairs Jim Covington reports from Springfield on new legislation, including County prisoners and childbirth (House Bill 1958), Residential mortgage originators (Public Act 97-143), Uniform Foreign Country Money Judgements Recognition Act, Adoption Act Registry, Health Care PoAs and Condominiums and associations.