Legal Services for Professional Services Firms

Professional services firms are typically organized as professional corporations (PCs), professional limited liability companies (PLLCs), or limited liability partnerships (LLPs), depending on state requirements and the firm's structure. Each offers different levels of liability protection and governance flexibility. The right choice depends on your state's professional practice regulations, the number of owners, and your growth and succession plans.

Partner buy-in structures typically involve a combination of capital contribution (which may be funded through firm loans, bank financing, or deferred payment), agreement to restrictive covenants, assumption of firm responsibilities, and a vesting period. The buy-in price is usually based on a formula tied to the firm's book value, revenue multiple, or a combination of both.

Enforceability varies by state and depends on reasonableness of the restrictions. Courts generally evaluate the duration, geographic scope, and scope of prohibited activities. In professional services, non-solicitation provisions (preventing solicitation of clients and employees) are often more enforceable and more practically effective than broad non-compete clauses.