“Thirdly,” says Franchitto, “if you’re going to later on separate, you’ve got to have an exit component to the relationship. It’s all good and proper for everybody to be happy and excited about entering into a collaborative relationship, but you need to have that contingency in there of ‘when we separate, who’s going to get the dog and the kids?’ You know, are they my clients? We’ve got to have an understanding that if we part company, I’m not going to give your clients to [someone else].”
This last issue is crucial, he says, because unlike in a marriage, the possibility of separation is fairly certain – everyone retires at some point.
“You’re going to pass on your practice to somebody else – and, if you sell your practice and you’ve got collaborative relationships, what if those firms don’t like [the new person]? And that happens.”
But how should such an agreement look? Thankfully, Franchitto says it’s not necessary to hire lawyers and put together an expensive legal document.
“A memorandum of understanding might do the job… It doesn’t have to be a twenty-page legal document at great expense from a top-ranking law firm, it can be something as simple as ‘I will do this if you will do this and vice versa. I’m a great fan of simplicity. Keep it simple, but have it structured.
“It’s better to spend the money upfront to prevent an argument than to try and defend and argument later on. Prevention is always cheaper than the cure.”