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Ways to Reduce Risk of Partnership Disputes in Washington DC


Many clients come to us once a business dispute has already materialized. This means stress levels are on the rise, and you could be facing expensive legal costs in order to resolve the matter. If you have a partnership, it’s important to meet with a Washington DC business litigation attorney who can help you with a plan ahead of time to reduce the chances of a partnership dispute before one actually occurs.

Comprehensive Partnership Agreement

One of the first things you can do to start is have a comprehensive partnership agreement in place. If you don’t have one that addresses how and where partnership disputes are resolved, you and your partners will be forced to rely on legal statutes and case law to govern your business. Unfortunately, this may not work in your favor given that “one size fits all” may not work for your business.

At a minimum, your partnership agreement should discuss important details like:

  • Roles, obligations, and duties of partners
  • Compensation and how profits are to be distributed
  • What percentage of control does each partner have
  • List the capital each partner is contributing at the start
  • Define the procedures for decision making
  • How deadlocks are handled
  • What circumstances would lead to the partnership ending
  • How “worst-case scenarios” are handled

Consider creating something called a decision matrix which is a table that evaluates a variety of alternative possibilities in various scenarios. You should sit down and really put some thought into the potential challenges and scenarios your business will face and ensure you have dispute resolution processes in place.

Evaluate the Effectiveness of Your Current Plan

If your business is already up and running, you should look at what you have in place already to see if there are any dispute resolution provisions. If not, you need to get on this as soon as possible. Sit down with your partner or partners to discuss options. Disagreements will always arise, so not every dispute may need to go through a dispute resolution process.

Have a Buyout Agreement

When you created your partnership, did you include a buyout agreement? This is a document that specifies the terms and conditions of how a partner could buy out, or force out, a partner who won’t leave voluntarily in the event he or she is not performing. If you don’t already have one in place, sit down with your partners and agree on something. Include a statement about the requirement to go to mediation or arbitration if a dispute should arise about implementing a buyout agreement.

Have a Washington DC Business Litigation Lawyer Draft Your Documents

One of the best ways to avoid a potential partnership dispute is to have a Washington DC business litigation attorney handle drafting your partnership agreement and related documents. The benefit of having a business attorney do this is that they have the experience and know what types of disputes often wind up in litigation. A partnership agreement is only as good as the person who drafted it.

Skip the urge to download a boilerplate partnership agreement template off the internet, as there is not a single format that suits all partnerships. Contact Tobin O’Connor Concino P.C. today at 202-362-5900 to schedule a consultation and let us help your partnership reduce its risk of litigated disputes.


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