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Dear Oaklyn Consulting,
My longtime business partner wants to leave our business and has retained legal counsel. What should I do?
From Oaklyn Consulting
If a business partner unexpectedly announces their departure and hires an attorney, they may be signaling their dissatisfaction. While they might not intend to pressure you, their actions can make you feel cornered. Understanding what to do if a partner wants to leave a business starts with staying calm and approaching the situation strategically.
Motives aside, retaining legal counsel is an unambiguous sign that your business relationship is no longer constructive and needs to be unwound. The choices you make in this high-pressure period will largely determine what your post-partnership future looks like.
The first thing you’ll want to do is take a deep breath. Then, try and think through what your long-term goals are after the current conflict has been resolved. Do you want to continue your business as a solo entrepreneur, or is this an unexpected but welcome opportunity to try something different?
Once you’ve clarified what you want, seek wise and strategic advice. If a partner wants to leave a business and legal aggression is involved, you’ll need an attorney to navigate potential pitfalls. Your former associate might have started a clock in which you simply have no choice but to respond within the legal system. If the other party has retained counsel but seems open to a constructive conversation, you can focus on finding a disciplined, collegial lawyer who is attuned toward creating solutions, rather than being contentious.
Depending on your situation, you might also seek the expertise of other professionals. A banker might have good ideas related to recapitalizing or moving money around, or could assist with a loan. A wealth advisor or personal financial planner might have thoughts on using your own resources to solve the problem efficiently without incurring additional costs. These kinds of major decisions are where we at Oaklyn Consulting specialize, especially when they lead to the purchase, sale or recapitalization of a business. Your team of advisors can help you evaluate your options so that you enter negotiations from a position of strength.
It’s far less expensive and stressful for business associates to fully explore the options for ending their partnership amicably before getting to the point where lawyers need to be involved. If a partner leaves a partnership, the ideal scenario is for both parties to handle the transition with professionalism and fairness. However, that’s not always the case. When conflicts arise, Oaklyn Consulting can assist in unwinding business partnerships, ensuring that our clients emerge in the best possible position.
