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Shurmust
Shurmust, Attorney
Category: Business Law
Satisfied Customers: 150
Experience:  I have completed over 30 criminal jury trials in the last three years and teach Business Law part-time for a state college.
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How do you determine partner worth. I am starting a business

Resolved Question:

How do you determine partner worth. I am starting a business with a Doctor who has an MFT license who will be clinical director of the business. I will be program director. She says it is standard for her to get 70 percent because of her license and I have to split 30 percent with another partner.Me and the other partner will be performing 90% of the work load. How should we determine each persons percentage?

Submitted: 1 year ago.
Category: Business Law
Expert:  Shurmust replied 1 year ago.

Shurmust :

Greetings! I am happy to help you with this matter. I trust all is well. Congrats on your recent venture.

Shurmust :

The big question is what do you she is entitled to? She says 70%, what do you and your partner thing?

Shurmust :

What are your thoughts?

Customer:

all 3 are investing capital. Her lawyer told her 70% is standard because of her licence. is this standard

Customer:

we have no idea, it seems a bit high

Shurmust :

Not necessarily.

Shurmust :

If it seems high, you are not obligated to go into business with the person. Shop around, if you are getting the same rates, than maybe you should go with her and the person you trust.

Customer:

is there a stand

Shurmust :

Are you each planning on putting up equal capital?

Customer:

standard

Customer:

yes

Shurmust :

It would be hard for someone to get the majority if everyone is paying the same capital?

Shurmust :

I am not familiar with a standard.

Shurmust :

Again, there is supply and demand. For example, it may be "standard" for an attorney who refers a case to another lawyer to get 33%.

Shurmust :

However, some lawyers are of the opinion that if the lawyer is doing nothing on the case, than they should only get 20%. This has also be codified by certain state statutes.

Shurmust :

What do you think she should be entitled to? Everything is ultimately negotiable is what I am saying.

Customer:

50% and 25% for the other 2 partners

Customer:

are you saying there is no standard or you don't know

Shurmust :

It would likely to be wise to shop around, talk to others with a similar arrangements. I do not feel your counter-offer is unreasonable considering you doing the majority of the work. Additionally, you may also wish to structure the income based upon the total amount of income derived. For example, if you do certain things that she is incapable of doing therefore bringing in more money to the business you should be rewarded/compensated more..

Shurmust :

I am saying that I have never heard of an industry standard.

Shurmust :

Additionally, there are several factors that may determine what percentage each party receives. You should negotiate a rate all three parties feel are suitable. It is clear you are not comfortable giving this high amount, and I can't blame you.

Customer:

you dont know what the percentage should be?

Customer:

or how to determine what it should be?

Shurmust :

I am not aware of a set percentage.

Shurmust :

The way you determine what the percentage to be is based upon the facts between the parties, experience, work, capital, market, etc.


 

Customer:

is there a formula?

Shurmust :

I have heard of set up's of 50, 25, 25; 60, 20,20; 70, 15, 15

Shurmust :

The formula is based upon your experience, your partners experience, the market, work, etc.

Customer:

thanks

Shurmust :

Also, it would probably be wise for you to be provided with certain "incentives" or "bonuses"

Shurmust :

Good luck! My pleasure. Please provide me positive feedback so I receive credit. If you need anything in the future, do not hesitate to reach out.

Customer:

Nothing that determines what her license is worth

Shurmust :

Certainly the fact she is licensed is of value, but 70% seems very high.

Shurmust :

Does that really seem equitable? I would certainly say no.

Customer:

Thank you

Shurmust :

Good luck! My pleasure!

Shurmust :

Why did you rate me with poor service?

Shurmust :

If I did not answer your question, or you were not satisfied, I would have preferred you have told me.

Shurmust, Attorney
Category: Business Law
Satisfied Customers: 150
Experience: I have completed over 30 criminal jury trials in the last three years and teach Business Law part-time for a state college.
Shurmust and 8 other Business Law Specialists are ready to help you

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