Are you considering entering the world of business law and launching your own firm? In a sector where competition is fierce, a well-structured partnership agreement can mean the difference between success and failure. A solid agreement not only defines the responsabilities and rights of each partner, but also establishes the foundations for an effective and long-lasting collaboration

On this topic, our Global Managing Partner, Marc Gericó, analyses in an exclusive report for Cinco Días the key elements to consider when establishing a partnership agreement.

Which elements do you believe are most important in a partnership agreement?

An optimal partnership agreement is the foundation of a healthy and long-term professional relationship. In the legal sector, where trust, reputation and meritocracy are essential, I consider five elements to be indispensable:

1. Clear roles and responsabilities:
It is crucial to establish who assumes which role, particularly regarding leadership and strategic direction. We often see groups of lawyers come together with great rapport and rapid growth, but without defining a managing partner or agreeing on a clear governance structure. The absence of leadership and decision-making quickly becomes a burden: the longer it persists, the more internal dynamics solidify, becoming difficult to reverse. Without a reference figure, tensions emerge, egos clash and the shared vision is lost, undermining the development of a genuine business mindset.

2. Decision-making framework:
It must be defined how strategic matters are approved (unanimity, qualified majority, etc.) and who has executive authority in day-to-day operations. This prevents gridlock and enables agile progress.

3. Admission and exit policies:
Conditions for admitting new partners, as well as scenarios for departures (retirement, voluntary exit or conflict), should be regulated from the outset. We have seen cases where a managing partner pushes to bring in a new partner based on an impressive CV from major firms. The problem arises when the candidate’s personality and cultural fit are not properly assessed. The outcome is usually the same: as in their previous experiences, the person does not integrate, generates friction and becomes a disappointment. The supposed “star hire” ultimately fails, the firm must undo the move and everyone loses credibility. Avoiding these situations requires more strategic thinking and less dazzlement.

4. Profit-sharing mechanisms:
Compensation and distribution criteria must be transparent and aligned with effort, contribution and the firm’s objectives. A positive example we witnessed: in a mid-sized firm, the partners decided to modernise their offices and make a bold investment in their image and infrastructure. Instead of external financing, they agreed —based on generosity and a shared vision— to temporarily waive a percentage of their profits to fund the entire investment, recovering it progressively. Decisions like this demonstrate a true business mentality, alignment and long-term vision beyond immediate financial gain.

5. Conflict resolution mechanisms:
Anticipating disagreements is a mark of professionalism. Including mechanisms such as mediation or arbitration can prevent personal disputes from harming the wider partnership project.

In short, a good partnership agreement not only prevents conflicts, it drives the professionalisation of the firm, strengthens the business mindset and reinforces alignment within the partnership. When these three pillars exist, the firm does not simply grow: it consolidates with vision, cohesion and sustainability.

What are the most common mistakes when signing a partnership agreement?

From a business consulting perspective, one of the most common mistakes when signing a partnership agreement is assuming that drafting a technical legal document is sufficient. But a good partnership agreement goes far beyond that: it must clearly reflect the culture, shared vision and potential scenarios of growth or conflict that may arise during the natural evolution of a firm. From our experience, the five most frequent mistakes are:

1. Avoiding uncomfortable conversations:
Many partners shy away from discussing sensitive topics such as power distribution, a partner’s potential departure or conflict-resolution mechanisms. This avoidance, out of fear of straining the relationship, creates ambiguity and future tension.
One of the issues that generate the most frustration -and is rarely captured with sufficient clarity- is the promise of annual billing or the supposed client portfolio that a new partner claims to bring. In many cases, these figures never materialise, nor is there a sustained effort to generate meetings, opportunities or business development to approach those targets. This leads to profound disappointment and a breakdown of trust among the partners who are genuinely committed to the sustainability of the business. 

2. Failing to define roles clearly:
A lack of defined and consensual leadership is a recurring source of friction. We see firms where no one wants to assume the role of managing partner, or where there is ambiguity about who makes decisions. Over time, this lack of structure creates operational blockages, internal tensions and ego battles that hinder the firm’s development.

3. Hiring based on CV rather than cultural fit:
This mistake is more common than it seems. Bringing in partners solely for their technical expertise or impressive track record in major firms, without sufficiently assessing whether their values, leadership style and vision fit with the firm’s culture, is a high-risk move. We have seen it repeatedly: the “star hire” does not integrate, creates internal friction, destabilises the team and ultimately forces the firm to undo the decision, with clear reputational and human costs.

4. Failing to link the agreement to the firm’s strategy:
The partnership agreement is often treated as a static document, when in reality it should be aligned with the firm’s strategic vision: institutionalisation, growth, specialisation, international expansion, etc. If it is not tied to the firm’s direction, it loses strength as a management tool. The agreement should reflect where the firm is going, not just regulate what already exists.

5. Leaving the agreement in a drawer:
A good partnership agreement must be reviewed and updated when partners change, the business model evolves or market conditions shift. Otherwise, it becomes a static snapshot that no longer reflects the firm or its growth ambition.

Ultimately, the most common mistakes when signing a partnership agreement are not legal, they are strategic. A good agreement does not only organise partner relations: it provides a solid foundation for sustainable growth, true business alignment and a strong partnership culture.

You can read the full article in Cinco Días, here.