Is joint representation for a practice purchase advisable?
Joint representation is never advisable if one or the other potential client is uncomfortable with joint representation. If the parties are comfortable with the idea, joint legal representation is allowed under California law if the clients have received full disclosure of the potential risks and have agreed to do so before joint representation begins. The question then becomes is joint representation advisable in your particular situation? Practice sales have significant opportunities for conflicting issues: non-competition, retreatment, representations, and tax allocations being first among many. Therefore, I do not consider it generally advisable for a buyer and seller to be jointly represented. However, I believe joint representation can work well when (1) the seller is retiring, (2) the sale is to the seller’s child or a 10 year (or greater) associate, and (3) both sides express a genuine desire that the contracts be drafted in a fair and nonpartisan manner. In these cases, a sign
Joint representation is never advisable if one or the other potential client is uncomfortable with joint representation. If the parties are comfortable with the idea, joint legal representation is allowed under many state’s laws if the clients have received proper disclosure of the potential risks (known and unknown) and have agreed to do so before joint representation begins. The question then becomes is joint representation advisable in your particular situation? Practice sales have significant opportunities for conflicting issues: non-competition, retreatment, representations, and tax allocations being first among many. In fact, many conflicts many not appear until negotiations have progressed; conflicts can even first appear after the sale has closed! Therefore, I do not consider it generally advisable for a buyer and seller to be jointly represented. However, I believe joint representation can work well when (1) the seller is retiring, (2) the sale is to the seller’s child or a 10
