Law Partner Expulsion

Business Lawyer

Volumn 55, Issue 2, 2000, Pages 845-880

  Ribstein, Larry E ^a  

^a NONE

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EID: 0034393523     PISSN: 00076899     EISSN: None     Source Type: Journal    
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References (219)

1. No. CL-94-8646, 1996 WL 438777 (Fla. Cir. Ct. July 23, 1996), aff'd in part, rev'd in part, 728 So. 2d 253 (Fla. Dist. Ct. App. 1998).
2. 977 S.W.2d 543 (Tex. 1998).
3. See Beasley, 728 So. 2d at 259.
4. See Bohatch, 977 S.W.2d at 547.
5. See Allen W. Vestal, Law Partner Expulsions, 55 WASH. & LEE L. REV. 1083, 1126-27, 1133 (1998).
6. For example, Professor Vestal notes, see id. at 1127, that while a large firm lawyer may not expect a for-cause requirement, a newly minted partner who came up through the associate ranks to make partner at a small, historically stable, five-lawyer, county seat law firm in southwestern Virginia might very well have a justified expectation that good faith and fairness would include a for-cause requirement for expulsion, even in the absence of such a provision in the partnership agreement. Id. It is not clear what considerations justify this large firm/small firm distinction. In particular, a large firm lawyer is less likely to be able to protect herself through a direct role in the firm's decision making than a small firm lawyer, and expulsion may be more necessary in a small firm than in a large firm to ensure the smooth functioning of the firm.
7. 672 N.E.2d 589 (N.Y. 1996).
8. For similar theories of law firms, see Roger Bowles & Goran Skogh, Reputation, Monitoring and the Organization of the Law Firm, in ESSAYS IN LAW AND ECONOMICS: CORPORATIONS, ACCIDENT PREVENTION AND COMPENSATION FOR LOSSES 33-47 (Michael Faure & Roger van den Bergh eds., 1989); Ronald J. Daniels, The Law Firm as an Efficient Community, 37 MCGILL L.J. 801, 816-17 (1992); Arleen Leibowitz & Robert Tollison, Free Riding, Shirking and Team Production in Legal Partnerships, 18 ECON. INQUIRY 380, 383 (1980). I have previously discussed how this reputational bonding function makes law firms important adjuncts to ethical rules in minimizing lawyer-client agency costs. See Larry E. Ribstein, Ethical Rules, Agency Costs and Law Firm Structure, 84 VA. L. REV. 1707 (1998). For other discussions of how law firms reduce lawyer-client agency costs, see Jonathan R. Macey & Geoffrey P. Miller, An Economic Analysis of Conflict of Interest Regulation, 82 IOWA L. REV. 965, 968-73 (1997); Milton C. Regan, Jr., Professional Reputation: Looking for the Good Lawyer, 39 S. TEX. L. REV. 549, 565- 66 (1998).
9. For similar theories of law firms, see Roger Bowles & Goran Skogh, Reputation, Monitoring and the Organization of the Law Firm, in ESSAYS IN LAW AND ECONOMICS: CORPORATIONS, ACCIDENT PREVENTION AND COMPENSATION FOR LOSSES 33-47 (Michael Faure & Roger van den Bergh eds., 1989); Ronald J. Daniels, The Law Firm as an Efficient Community, 37 MCGILL L.J. 801, 816-17 (1992); Arleen Leibowitz & Robert Tollison, Free Riding, Shirking and Team Production in Legal Partnerships, 18 ECON. INQUIRY 380, 383 (1980). I have previously discussed how this reputational bonding function makes law firms important adjuncts to ethical rules in minimizing lawyer-client agency costs. See Larry E. Ribstein, Ethical Rules, Agency Costs and Law Firm Structure, 84 VA. L. REV. 1707 (1998). For other discussions of how law firms reduce lawyer-client agency costs, see Jonathan R. Macey & Geoffrey P. Miller, An Economic Analysis of Conflict of Interest Regulation, 82 IOWA L. REV. 965, 968-73 (1997); Milton C. Regan, Jr., Professional Reputation: Looking for the Good Lawyer, 39 S. TEX. L. REV. 549, 565- 66 (1998).
10. For similar theories of law firms, see Roger Bowles & Goran Skogh, Reputation, Monitoring and the Organization of the Law Firm, in ESSAYS IN LAW AND ECONOMICS: CORPORATIONS, ACCIDENT PREVENTION AND COMPENSATION FOR LOSSES 33-47 (Michael Faure & Roger van den Bergh eds., 1989); Ronald J. Daniels, The Law Firm as an Efficient Community, 37 MCGILL L.J. 801, 816-17 (1992); Arleen Leibowitz & Robert Tollison, Free Riding, Shirking and Team Production in Legal Partnerships, 18 ECON. INQUIRY 380, 383 (1980). I have previously discussed how this reputational bonding function makes law firms important adjuncts to ethical rules in minimizing lawyer-client agency costs. See Larry E. Ribstein, Ethical Rules, Agency Costs and Law Firm Structure, 84 VA. L. REV. 1707 (1998). For other discussions of how law firms reduce lawyer-client agency costs, see Jonathan R. Macey & Geoffrey P. Miller, An Economic Analysis of Conflict of Interest Regulation, 82 IOWA L. REV. 965, 968-73 (1997); Milton C. Regan, Jr., Professional Reputation: Looking for the Good Lawyer, 39 S. TEX. L. REV. 549, 565- 66 (1998).
11. For similar theories of law firms, see Roger Bowles & Goran Skogh, Reputation, Monitoring and the Organization of the Law Firm, in ESSAYS IN LAW AND ECONOMICS: CORPORATIONS, ACCIDENT PREVENTION AND COMPENSATION FOR LOSSES 33-47 (Michael Faure & Roger van den Bergh eds., 1989); Ronald J. Daniels, The Law Firm as an Efficient Community, 37 MCGILL L.J. 801, 816-17 (1992); Arleen Leibowitz & Robert Tollison, Free Riding, Shirking and Team Production in Legal Partnerships, 18 ECON. INQUIRY 380, 383 (1980). I have previously discussed how this reputational bonding function makes law firms important adjuncts to ethical rules in minimizing lawyer-client agency costs. See Larry E. Ribstein, Ethical Rules, Agency Costs and Law Firm Structure, 84 VA. L. REV. 1707 (1998). For other discussions of how law firms reduce lawyer-client agency costs, see Jonathan R. Macey & Geoffrey P. Miller, An Economic Analysis of Conflict of Interest Regulation, 82 IOWA L. REV. 965, 968-73 (1997); Milton C. Regan, Jr., Professional Reputation: Looking for the Good Lawyer, 39 S. TEX. L. REV. 549, 565- 66 (1998).
12. For similar theories of law firms, see Roger Bowles & Goran Skogh, Reputation, Monitoring and the Organization of the Law Firm, in ESSAYS IN LAW AND ECONOMICS: CORPORATIONS, ACCIDENT PREVENTION AND COMPENSATION FOR LOSSES 33-47 (Michael Faure & Roger van den Bergh eds., 1989); Ronald J. Daniels, The Law Firm as an Efficient Community, 37 MCGILL L.J. 801, 816-17 (1992); Arleen Leibowitz & Robert Tollison, Free Riding, Shirking and Team Production in Legal Partnerships, 18 ECON. INQUIRY 380, 383 (1980). I have previously discussed how this reputational bonding function makes law firms important adjuncts to ethical rules in minimizing lawyer-client agency costs. See Larry E. Ribstein, Ethical Rules, Agency Costs and Law Firm Structure, 84 VA. L. REV. 1707 (1998). For other discussions of how law firms reduce lawyer-client agency costs, see Jonathan R. Macey & Geoffrey P. Miller, An Economic Analysis of Conflict of Interest Regulation, 82 IOWA L. REV. 965, 968-73 (1997); Milton C. Regan, Jr., Professional Reputation: Looking for the Good Lawyer, 39 S. TEX. L. REV. 549, 565- 66 (1998).
13. For similar theories of law firms, see Roger Bowles & Goran Skogh, Reputation, Monitoring and the Organization of the Law Firm, in ESSAYS IN LAW AND ECONOMICS: CORPORATIONS, ACCIDENT PREVENTION AND COMPENSATION FOR LOSSES 33-47 (Michael Faure & Roger van den Bergh eds., 1989); Ronald J. Daniels, The Law Firm as an Efficient Community, 37 MCGILL L.J. 801, 816-17 (1992); Arleen Leibowitz & Robert Tollison, Free Riding, Shirking and Team Production in Legal Partnerships, 18 ECON. INQUIRY 380, 383 (1980). I have previously discussed how this reputational bonding function makes law firms important adjuncts to ethical rules in minimizing lawyer-client agency costs. See Larry E. Ribstein, Ethical Rules, Agency Costs and Law Firm Structure, 84 VA. L. REV. 1707 (1998). For other discussions of how law firms reduce lawyer-client agency costs, see Jonathan R. Macey & Geoffrey P. Miller, An Economic Analysis of Conflict of Interest Regulation, 82 IOWA L. REV. 965, 968-73 (1997); Milton C. Regan, Jr., Professional Reputation: Looking for the Good Lawyer, 39 S. TEX. L. REV. 549, 565-66 (1998).
14. See Benjamin Klein & Keith B. Leffler, The Role of Market Forces in Assuring Contractual Performance, 89 J. POL. ECON. 615, 629-33 (1981); Benjamin Klein et al., Vertical Integration, Appropriable Rents, and the Competitive Contracting Process, 21 J.L. & ECON. 297, 313-19 (1978).
15. See Benjamin Klein & Keith B. Leffler, The Role of Market Forces in Assuring Contractual Performance, 89 J. POL. ECON. 615, 629-33 (1981); Benjamin Klein et al., Vertical Integration, Appropriable Rents, and the Competitive Contracting Process, 21 J.L. & ECON. 297, 313-19 (1978).
16. See Ronald J. Gilson & Robert H. Mnookin, Sharing Among the Human Capitalists: An Economic Inquiry into the Law Firm and How Partners Split Profits, 37 STAN. L. REV. 313, 319, 339-41 (1985).
17. See infra note 27 and accompanying text.
18. See MARC GALANTER & THOMAS PALAY, TOURNAMENT OF LAWYERS: THE TRANSFORMATION OF THE BIG LAW FIRM 87-93 (1991).
19. See Richard A. Epstein, In Defense of the Contract at Will, 51 U. CHI. L. REV. 947, 962 (1984) (noting in explaining partnership at will as a disciplinary device that "direct legal action always costs more than the simple act of separation, and any lawsuit is costly to bring and uncertain in its outcome. Thus, while resort to legal remedies is to be expected, it will not be frequent.").
20. See infra notes 40-50 and accompanying text.
21. See infra notes 20-24 and accompanying text.
22. See Gilson & Mnookin, supra note 10, at 327-29.
23. See id. at 330-31; see also Epstein, supra note 13, at 949.
24. This has been termed a "life-cycle" problem in employee termination. See generally Stewart J. Schwab, Life-Cycle Justice: Accommodating Just Cause and Employment at Will, 92 MICH. L. REV. 8, 11 (1993).
25. See supra text accompanying note 10.
26. See infra text accompanying note 27 (discussing constraint on the firm's ability to solve this problem by restricting partners' ability to compete after leaving the firm).
27. It is not surprising, therefore, that expulsion is usually effected by at least a majority vote of the members rather than by a small group. Cf. Bowles & Skogh, supra note 8, at 36-37.
28. This is analogous to an asserted rationale for the implicit promise in most law partnerships that associates will be either terminated or promoted at the end of their probationary periods. See Ronald J. Gilson & Robert H. Mnookin, Coming of Age in the Corporate Law Firm: The Economics of Associate Career Patterns, 41 STAN. L. REV. 567, 575-81 (1989).
29. For a case holding that taking client lists may be actionable, see Fred Siegel Co. v. Arter & Hadden, 707 N.E.2d 853, 864-65 (Ohio 1999).
30. See infra note 27 and accompanying text.
31. See supra notes 8-24 and accompanying text.
32. In economic terms, lawyers receive both firm "specific" training that is useful mainly inside the particular firm and "general" training that is useful outside the firm. See generally GARY S. BECKER, HUMAN CAPITAL: A THEORETICAL AND EMPIRICAL ANALYSIS, WITH SPECIAL REFERENCE TO EDUCATION 33-51 (3d ed. 1993).
33. See MODEL RULES OF PROFESSIONAL CONDUCT Rule 5.6 (1983). Model Rule 5.6 has been interpreted to bar agreements that reduce lawyers' post-withdrawal compensation if they compete or remain in private practice. See Jacob v. Norris, McLaughlin & Marcus, 607 A.2d 142, 155 (N.J. 1992); Cohen v. Lord, Day & Lord, 550 N.E.2d 410, 410 (N.Y. 1989); ROBERT W. HILLMAN, HILLMAN ON LAWYER MOBILITY: THE LAW AND ETHICS OF PARTNER WITHDRAWALS AND LAW FIRM BREAKUPS § 2.3.4, at 2:48-2:69 (Supp. 1999).
34. See MODEL RULES OF PROFESSIONAL CONDUCT Rule 5.6 (1983). Model Rule 5.6 has been interpreted to bar agreements that reduce lawyers' post-withdrawal compensation if they compete or remain in private practice. See Jacob v. Norris, McLaughlin & Marcus, 607 A.2d 142, 155 (N.J. 1992); Cohen v. Lord, Day & Lord, 550 N.E.2d 410, 410 (N.Y. 1989); ROBERT W. HILLMAN, HILLMAN ON LAWYER MOBILITY: THE LAW AND ETHICS OF PARTNER WITHDRAWALS AND LAW FIRM BREAKUPS § 2.3.4, at 2:48-2:69 (Supp. 1999).
35. See UPA § 31(1)(d) (1914); see also Rodgers v. RAB Inv., Ltd., 816 S.W.2d 543, 548 (Tex. App. 1991) (holding that expulsion of partner pursuant to agreement dissolves the partnership by will, although agreement provides only for dissolution by unanimous vote because dissolution is the "substantive effect of expulsion under the contract"). Bohatch v. Butler & Binion, 977 S.W.2d 543, 545-46 (Tex. 1998), held that the expulsion ground of dissolution in the UPA was irrelevant because the partnership agreement provided that the expulsion did not dissolve the partnership. However, the partnership agreement probably cannot effectively prevent a technical dissolution by expulsion, anymore than the agreement can do so where the dissolution is triggered by any other cause provided for in the UPA. By contrast, under the Revised Uniform Partnership Act (RUPA), expulsion is not a cause of dissolution. See RUPA § 801(1) (1994 & Supp. 1997) (providing that dissociation of a partner under, inter alia, § 601(3), providing for expulsion, does not dissolve the partnership).
36. See infra notes 121-36 and accompanying text.
37. Compare infra notes 89-90 and accompanying text (discussing the situation where the partner is expelled contrary to an express agreement).
38. See UPA § 38(1).
39. Id. § 42 (providing for rights of partner where partnership dissolved under, inter alia, § 41(6), which refers to bona fide expulsion under the partnership agreement).
40. Id. § 26.
41. See id. § 18(a) (providing that, subject to contrary agreement, the partners "share equally in the profits and surplus remaining after all liabilities . . . are satisfied"); ALAN BROMBERG & LARRY E. RIBSTEIN, BROMBERG & RIBSTEIN ON PARTNERSHIP § 3.04(c)(1), at 3:57-3:60 (1999).
42. See RUPA § 601(3) (1994 & Supp. 1997).
43. See id. § 801.
44. Id. § 701(b).
45. Compare id. § 701(b) with UPA § 38.
46. See infra notes 40-53 and accompanying text.
47. See Larry E. Ribstein, A Theoretical Analysis of Professional Partnership Goodwill, 70 NEB. L. REV. 38, 43-44 (1991).
48. See id. at 43, 45.
49. See id. at 48-51.
50. See BROMBERG & RIBSTEIN, supra note 34, § 7.13(c)(2), at 7:196; see also In re Brown, 150 N.E. 581, 582 (N.Y. 1926).
51. See Salinas v. Rafati, 948 S.W.2d 286, 290 (Tex. 1997) (holding that partnership had no value based solely on reputations of former partners in the absence of a contention or evidence that the former partnership had goodwill separate form each partner's personal talents and abilities or that any partner had the right or sought to form a new partnership using the dissolved partnership's name); Welder v. Green, 985 S.W.2d 170, 179 (Tex. App. 1998, writ denied) (holding that it was error to award goodwill value in law firm without evidence of goodwill associated with firm's name or location separate from reputations of individual partners despite the firm's 50-year lineage through many personnel changes, reasoning that the firm was not like a "Grandfather's Axe" that retained a kind of continuity despite changing its parts). The exclusion is based partly on the ethical rule against fee-splitting. See MODEL CODE OF PROFESSIONAL RESPONSIBILITY, DR 2-107(A) (1999); see also Fraser v. Bogucki, 203 Cal. Rptr. 3d 41, 45 (Dist. Ct. App. 1988) (denying a law partner's claim against his former partners for appropriation of client relationships); Raphael v. Shapiro, 587 N.Y.S.2d 68, 72 (Sup. Ct. 1992) (holding that partner's sale of law practice in violation of ethical rules precludes collection on promissory note from buyer). By contrast, sharing in law firm goodwill is not unethical fee-splitting when goodwill is deemed to be an asset of the firm, included in the firm's value on dissociation of a partner. See Dawson v. White & Case, 672 N.E.2d 589, 593 (N.Y. 1996) (stating that "the ethical constraints against the sale of a law practice's goodwill by a practicing attorney no longer warrant a blanket prohibition against the valuation of law firm goodwill when those ethical concerns are absent"); Spayd v. Turner, Granzow & Hollerkamp, 482 N.E.2d 1232, 1239 (Ohio 1985); Gull v. Van Epps, 517 N.W.2d 531, 533 (Wis. Ct. App. 1994) (noting that the anti-fee-splitting rule does not apply as between partners in the same firm that is dissolving). MODEL RULES OF PROFESSIONAL CONDUCT Rule 1.17 (1999) explicitly permits purchase of goodwill of a law practice if certain conditions are met, including the seller's ceasing to engage in practice in the area. See HILLMAN, supra note 27, § 2.5, at 2:96-2:99. For a policy analysis of the ethical rule against goodwill payments to retiring lawyers, see generally Ribstein, supra note 40.
52. See Salinas v. Rafati, 948 S.W.2d 286, 290 (Tex. 1997) (holding that partnership had no value based solely on reputations of former partners in the absence of a contention or evidence that the former partnership had goodwill separate form each partner's personal talents and abilities or that any partner had the right or sought to form a new partnership using the dissolved partnership's name); Welder v. Green, 985 S.W.2d 170, 179 (Tex. App. 1998, writ denied) (holding that it was error to award goodwill value in law firm without evidence of goodwill associated with firm's name or location separate from reputations of individual partners despite the firm's 50-year lineage through many personnel changes, reasoning that the firm was not like a "Grandfather's Axe" that retained a kind of continuity despite changing its parts). The exclusion is based partly on the ethical rule against fee- splitting. See MODEL CODE OF PROFESSIONAL RESPONSIBILITY, DR 2-107(A) (1999); see also Fraser v. Bogucki, 203 Cal. Rptr. 3d 41, 45 (Dist. Ct. App. 1988) (denying a law partner's claim against his former partners for appropriation of client relationships); Raphael v. Shapiro, 587 N.Y.S.2d 68, 72 (Sup. Ct. 1992) (holding that partner's sale of law practice in violation of ethical rules precludes collection on promissory note from buyer). By contrast, sharing in law firm goodwill is not unethical fee-splitting when goodwill is deemed to be an asset of the firm, included in the firm's value on dissociation of a partner. See Dawson v. White & Case, 672 N.E.2d 589, 593 (N.Y. 1996) (stating that "the ethical constraints against the sale of a law practice's goodwill by a practicing attorney no longer warrant a blanket prohibition against the valuation of law firm goodwill when those ethical concerns are absent"); Spayd v. Turner, Granzow & Hollerkamp, 482 N.E.2d 1232, 1239 (Ohio 1985); Gull v. Van Epps, 517 N.W.2d 531, 533 (Wis. Ct. App. 1994) (noting that the anti-fee-splitting rule does not apply as between partners in the same firm that is dissolving). MODEL RULES OF PROFESSIONAL CONDUCT Rule 1.17 (1999) explicitly permits purchase of goodwill of a law practice if certain conditions are met, including the seller's ceasing to engage in practice in the area. See HILLMAN, supra note 27, § 2.5, at 2:96-2:99. For a policy analysis of the ethical rule against goodwill payments to retiring lawyers, see generally Ribstein, supra note 40.
53. See Zells v. Zells (In re Marriage of Zells), 572 N.E.2d 944, 945-46 (Ill. 1991) (relying partly on ethical rule forbidding sale of a law practice); Perlberger v. Perlberger, 626 A.2d 1186, 1197-98 (Pa. Super. Ct. 1993) (excluding value of contingent fee cases in part because of difficulty of apportioning the value between the law firm from which husband took the cases and the amount attributable to husband's reputation); BROMBERG & RIBSTEIN, supra note 34, § 3.05(g)(3), at 3:121; Ribstein, supra note 40, at 51. Note that there is also a problem of double-counting because the lawyer's earning power may be taken into account in determining maintenance and support. See Zells, 572 N.E.2d at 946.
54. RUPA § 701(b) (1994 & Supp. 1997).
55. See BROMBERG & RIBSTEIN, supra note 34, § 7.13(c)(2), at 7:199.
56. See Brown, 150 N.E. at 583 (holding that "continuity of organization . . . is of value in business of a complex order. Where the business is simple, the benefits of the organization are slight and not so easily transmitted"); Schoen v. J.C. Bradford & Co., 642 S.W.2d 420, 425 (Tenn. Ct. App. 1982) (holding that goodwill was attributable to "value of assets 'in place,' 'assembled' for use by a going concern, and not as separate items"); Smith, Keller & Assocs. v. Dorr & Assocs., 875 P.2d 1258, 1265 (Wyo. 1994) (holding that accounting partner may be entitled to "client base" allocated to the partner under agreement); Laura L. Crum, Comment, Dissolution of a Law Partnership - Goodwill, Winding-up Profits and Additional Compensation, 6 J. LEGAL PROF. 277, 280-82 (1981); Gary S. Rosin, The Hard Heart of the Enterprise: Goodwill and the Role of the Law Firm, 39 S. TEX. L. REV. 315, 336-40 (1998).
57. See Brown, 150 N.E. at 583 (holding that "continuity of organization . . . is of value in business of a complex order. Where the business is simple, the benefits of the organization are slight and not so easily transmitted"); Schoen v. J.C. Bradford & Co., 642 S.W.2d 420, 425 (Tenn. Ct. App. 1982) (holding that goodwill was attributable to "value of assets 'in place,' 'assembled' for use by a going concern, and not as separate items"); Smith, Keller & Assocs. v. Dorr & Assocs., 875 P.2d 1258, 1265 (Wyo. 1994) (holding that accounting partner may be entitled to "client base" allocated to the partner under agreement); Laura L. Crum, Comment, Dissolution of a Law Partnership - Goodwill, Winding-up Profits and Additional Compensation, 6 J. LEGAL PROF. 277, 280-82 (1981); Gary S. Rosin, The Hard Heart of the Enterprise: Goodwill and the Role of the Law Firm, 39 S. TEX. L. REV. 315, 336-40 (1998).
58. See supra text accompanying notes 8-9.
59. Indeed, as discussed below, a court held that Cadwalader, Wickersham & Taft, one of the best-known law firms in the United States, had no goodwill. See Cadwalader, Wickersham & Taft v. Beasley, 728 So. 2d 253, 259 (Fla. Dist. Ct. App. 1998). Note, however, that partners do receive partial compensation for goodwill in the form of a share of the realized value of work-in-process. See Ribstein, supra note 40, at 50.
60. Cf. Donahue v. Draper, 491 N.E.2d 260, 266 (Mass. App. Ct. 1986) (holding in a close corporation case that even goodwill derived from a partner's contacts may be included in value if these contacts were contributed to the firm).
61. See Ribstein, supra note 40, at 45.
62. See supra text following notes 27.
63. See Rhue v. Dawson, 841 P.2d 215, 222-23 (Ariz. Ct. App. 1992) (distinguishing ouster of a partner and expulsion per the partnership agreement).
64. See supra text following note 27.
65. The courts sometimes hold, without statutory basis, that an expulsion other than in accordance of the agreement is itself a cause of dissolution without regard to judicial decree. See Crutcher v. Smith (In re Crutcher), 209 B.R. 347, 352 (Bankr. E.D. Pa. 1997) (holding that partner's wrongful exclusion from partnership business caused dissolution on date of expulsion rather than on date of suit for accounting and damages); Fischer v. Brancato, 937 S.W.2d 379, 383 (Mo. Ct. App. 1996) (holding that the partnership was dissolved by a partner's sending co-partner a letter informing him that his interest in the partnership was terminated).
66. UPA § 32(1)(d) (1914).
67. Id. § 32(1)(f).
68. RUPA § 801(5) (1994 & Supp. 1997).
69. See Beasley v. Cadwalader, Wickersham & Taft, No. CL-94-8646, 1996 WL 449247, at *1-*2 (Fla. Cir. Ct. July 23, 1996) (holding that the firm dissolved despite an agreement conditioning dissolution on a written agreement by 75% of the remaining voting partners, reasoning that such an agreement is strictly construed and does not apply to expulsion contrary to the partnership agreement), aff'd in part, rev'd in part, 728 So. 2d 253 (Fla. Dist. Ct. App. 1998).
70. See BROMBERG & RIBSTEIN, supra note 34, § 7.06, at 7:105, 7:111 ; Robert W. Hillman, Misconduct as a Basis for Excluding or Expelling a Partner: Effecting Commercial Divorce and Securing Custody of the Business, 78 Nw. U. L. REV. 527, 547-51 (1983).
71. See UPA § 18(e), (h); RUPA § 401(f), (i).
72. See UPA § 19; RUPA § 403.
73. See BROMBERG & RIBSTEIN, supra note 34, § 7.06, at 7:105-7:106.
74. 1996 WL 449247, at *1.
75. See id. at *5. The trial court reasoned that the offer to relocate may have been in bad faith. See id. at *4. The firm had argued that the partner was preparing to leave anyway and never considered accepting the offer to move to New York. See Trial Brief of Cadwalader, Wickersham & Taft at 24, Beasley, 1996 WL 438777 (Fla. Cir. Ct. 1996) (No. 94-8646) [hereinafter Beasley Trial Brief] (on file with The Business Lawyer, University of Maryland School of Law). But cf. Day v. Avery, 548 F.2d 1018, 1028-29 (D.C. Cir. 1976) (holding that partnership merger not sufficiently fundamental to require a unanimous vote although merger caused significant change in partner's status in the Washington, D.C. office).
76. Partners Sue, NAT'L L.J., Apr. 19, 1999, at A23.
77. In Beasley, the law firm had argued that the closing of the Florida office was within the business judgment rule in light of contention between Beasley and another partner, the expelled partner's plans to leave, the questionable profitability of the Florida office, the departure of some administrators, client conflict of interest problems and the impending expiration of the office lease, and the firm's general plan to improve productivity and decrease expenses. See Beasley Trial Brief, supra note 66, at 18, 22-26.
78. Liquidation is described in UFA § 40 (1914) and RUPA § 807 (1994 & Supp. 1997).
79. Because most partnership agreements probably do not provide for the partners' rights on a judicial dissolution of the firm, the excluded partner arguably would be entitled to a per capita share of profits or surplus left over after payment of debts and partner capital and loans. See UPA § 18(a); RUPA § 401 (a), (b). However, it is more likely the court would hold that the sharing ratios in the partnership agreement superseded this default provision.
80. For a discussion of law firm reputation, see supra text accompanying notes 8-9.
81. The courts have so held for musical or other artistic groups where the firm's reputation is associated with the members' individual talents, rather than its bond ensuring reliability. See Messer v. "The Fadettes," 46 N.E. 407, 407 (Mass. 1897); Bailly v. Betti, 148 N.E. 776, 777 (N.Y. 1925); Bailly v. Betti, 212 N.Y.S. 455, 455-56 (Sup. 1925); Blakely v. Sousa, 47 A. 286, 288 (Pa. 1900). The Truth in Rock Act has been introduced, which is designed to bar deception by successors to oldies groups. See Paul Farhi, Old Pop Stars' Bill of Rights: Truth in Rock Act Takes on Imposters, WASH. POST, May 5, 1999, Style, Cl.
82. See MODEL CODE OF PROFESSIONAL RESPONSIBILITY, EC 2-11 (1999); MODEL RULES OF PROFESSIONAL CONDUCT, Rule 7.5 (1999); Siddall v. Keating, 185 N.Y.S.2d 630, 634 (App. Div. 1959), aff'd, 164 N.E.2d 860 (N.Y. 1959).
83. See MODEL CODE OF PROFESSIONAL RESPONSIBILITY, EC 2-11 (1999); MODEL RULES OF PROFESSIONAL CONDUCT, Rule 7.5 (1999); Siddall v. Keating, 185 N.Y.S.2d 630, 634 (App. Div. 1959), aff'd, 164 N.E.2d 860 (N.Y. 1959).
84. See supra text accompanying note 51.
85. See Beasley v. Cadwalader, Wickersham & Taft, No. CL-94-8646, 1996 WL 438777, at *8 (Fla. Cir. Ct. July 23, 1996).
86. A court certainly would not compel the firm to retain the partner under the long-standing rule regarding specific performance of personal service contracts.
87. Defendant's Supplemental Memorandum on Liability and Reply Memorandum on Accounting and Damages at 11, Beasley, 1996 WL 438777 (Fla. Dist. Ct. App. 1998) (No. 94-8646) (on file with The Business Lawyer, University of Maryland School of Law).
88. See UPA § 42 (1914).
89. Beasley, 1996 WL 438777, at *8.
90. See supra note 75 and accompanying text.
91. See Cadwalader, Wickersham & Taft v. Beasley, 728 So. 2d 253, 258 (Fla. Dist. Ct. App. 1998).
92. See Beasley, 1996 WL 438777, at *8.
93. See Beasley, 728 So. 2d at 258.
94. See Weidman v. Fuchsberg, 204 N.Y. L.J. 30 (1990) (overturning arbitrator's award of $900,000 to each of plaintiff partners for "bad faith termination" on the ground that this was equivalent to punitive damages and against public policy, but affirming termination payments per agreement). Notably, Beasley purported to apply New York law. See Beasley, 1996 WL 438777, at *7.
95. See Beasley, 1996 WL 438777, at *6.
96. See Beasley Trial Brief, supra note 66, at 41.
97. See supra notes 8-24 and accompanying text.
98. See infra notes 121-36 and accompanying text.
99. See supra notes 54-81 and accompanying text.
100. See supra notes 82-84 and accompanying text (discussing standards courts have applied in awarding punitive damages).
101. See UPA § 31(1)(b) (1914); RUPA § 801(1) (1994 & Supp. 1997).
102. See UPA §§ 38(1), 40; RUPA § 807.
103. See supra notes 69-70 and accompanying text.
104. 672 N.E.2d 589 (N.Y. 1996).
105. See id. at 592.
106. See RUPA § 807.
107. See supra notes 8-24 and accompanying text.
108. See RUPA § 801(1).
109. See BROMBERG & RIBSTEIN, supra note 34, § 7.01(a), at 7:6. Thus, courts might distinguish general partnerships from other types of firms where delectus personarum is not as deeply entrenched and hold that firms cannot expel members of these other firms in the absence of contrary agreement. In these firms, expulsion might not serve the same disciplinary function as in a law firm, but rather resembles a simple redemption right where protecting the member's financial interest is more important than protecting the firm's reputation. Even if the firms may seem to be similar apart from the choice of business form, the parties' choice of background rules may be significant. That is particularly clear now that the parties' choice among unincorporated business forms is not constrained by the need for limited liability.
110. Where the agreement explicitly limits the causes of expulsion, the partnership should not be permitted, in effect, to make an end run around the agreement by using the dissolution and reformation procedure. See infra text accompanying notes 176-79. The result therefore would be the same as an explicitly unauthorized ouster.
111. See supra notes 56-84 and accompanying text.
112. See supra notes 8-24 and accompanying text.
113. See infra notes 108-12 and accompanying text.
114. See RUPA § 701(b) (1994 & Supp. 1997); see also supra text accompanying note 38.
115. See supra text accompanying notes 56-84.
116. See UPA § 32(1)(c), (d) (1914); BROMBERG & RIBSTEIN, supra note 34, § 7.06(c), at 7:104-7:105.
117. See supra note 106.
118. See RUPA § 601(5). RUPA § 601(4) also permits expulsion on unanimous vote (excluding the expelled partner) in limited circumstances, such as where it is unlawful to carry on the partnership business with that partner or the partner has transferred all or substantially all of his partnership interest. See id. § 601(4).
119. See RUPA § 801(1).
120. See UPA § 38(1).
121. See RUPA § 701.
122. See supra text accompanying notes 43-53.
123. See supra text accompanying notes 56-63; see also Hillman, supra note 61, at 539-44.
124. See BROMBERG & RIBSTEIN, supra note 34, § 7.03 nn.49-52, at 7:69-7:70.
125. Beasley v. Cadwalader, Wickersham & Taft, No. CL-94-8646, 1996 WL 438777, at *6 (Fla. Cir. Ct. July 23, 1996), aff'd in part, rev'd in part, 728 So.2d 253 (Fla. Dist. Ct. App. 1998).
126. See Epstein, supra note 13, at 962-977; Schwab, supra note 18, at 28-30.
127. See supra notes 31-53 and accompanying text.
128. See Schwab, supra note 18, at 28-32.
129. See infra notes 174-82 and accompanying text (discussing interpretation of the partnership agreement).
130. See infra notes 174-82 and accompanying text.
131. See infra notes 124-36 and accompanying text.
132. See infra notes 137-73 and accompanying text.
133. See infra notes 174-82 and accompanying text.
134. See supra notes 8-24 and accompanying text.
135. See supra note 116 and accompanying text.
136. See Vestal, supra note 5, at 1125-26.
137. See Epstein, supra note 13, at 957-58 (noting that "partners are generally social and economic equals between whom considerations of inequality of bargaining power . . . have no relevance").
138. See infra notes 8-24 and accompanying text.
139. See infra text accompanying notes 174-82.
140. For example, faced with judicial restrictions on non-competition agreements, law firms have sought refuge in arbitration. See Heher v. Smith, Stratton, Wise, Heher & Brennan, 672 A.2d 1147, 1152 (N.J. 1996) (noting confidence in arbitrators' ability to resolve public policy issues); Hackett v. Milbank, Tweed, Hadley & McCloy, 654 N.E.2d 95, 100-02 (N.Y. 1995) (upholding arbitration of agreement providing for denial of ex-partner's withdrawal payment). See generally William M. Landes & Richard A. Posner, Adjudication as a Private Good, 8 J. LEGAL STUD. 235, 245-53 (1979) (discussing the competition between arbitrators and courts).
141. See generally BROMBERG & RIBSTEIN, supra note 34, § 1.04, at 1:61-1:62.
142. See RUPA §§ 103(b)(9), 106(b) (1994 & Supp. 1999) (providing that limited liability partnerships are governed by the law of the state where the "chief executive office" is located); ALAN R. BROMBERG & LARRY E. RIBSTEIN, BROMBERG & RIBSTEIN ON LIMITED LIABILITY PARTNERSHIPS AND THE REVISED UNIFORM PARTNERSHIP ACT, ch. 6 (forthcoming 2000 ed.).
143. See generally supra note 132.
144. The Delaware General Partnership Act provides: (c) It is the policy of this chapter to give maximum effect to the principle of freedom of contract and to the enforceability of partnership agreements. (d) [A] partner or other person . . . shall not be liable to the limited partnership or to any such other partner for the partner's or other person's good faith reliance on the provisions of such partnership agreement. DEL. CODE ANN. tit. 6, §§ 17-1101 (1993 & Supp. 1996). For expansive interpretations of similar language in Delaware's limited partnership and limited liability company (LLC) statutes, see Elf Atochem North America, Inc. v. Jaffari, 727 A.2d 286, 293 (Del. 1999) (enforcing arbitration and choice of forum clause in LLC agreement) and Sonet v. Timber Co., 722 A.2d 319, 320, 322 (Del. Ch. 1998) (holding that agreement giving general partner "sole discretion" preempted fiduciary duty in connection with merger converting limited partnership into real estate investment trust).
145. Bohatch v. Butler & Binion, 977 S.W.2d 543, 545-46 (Tex. 1998).
146. Cadwalader, Wickersham & Taft v. Beasley, 728 So. 2d 253, 256 (Fla. Dist. Ct. App. 1998).
147. See, e.g., Vestal, supra note 5, at 1119-20 (relying on language of prior cases to show that a case permitting expulsion without cause is contrary to precedent).
148. See Edward B. Rock, Saints and Sinners: How Does Delaware Corporate Law Work?, 44 UCLA L. REV. 1009, 1101-05 (1997) (discussing the role of moral suasion in Delaware judicial opinions on corporate law).
149. See RUPA § 401(d) (1994 & Supp. 1997) (defining "good faith" as an obligation separate from fiduciary duties); Larry E. Ribstein, Fiduciary Duty Contracts in Unincorporated Firms, 54 WASH. & LEE L. REV. 537, 541, 544 (1997).
150. See Oregon RSA No. 6, Inc. v. Castle Rock Cellular, 840 F. Supp. 770, 776, 778 (D. Or. 1993), aff'd, 76 F. 3d 1003 (9th Cir. 1996). The Castle Rock court stated: If in each contract the parties had to expressly describe and prohibit every artifice by which the parties could potentially deprive each other of the fruits of their agreement, then contracts would soon become as long as the tax code, as difficult to interpret, and (like the tax code) still contain innumerable loopholes available to a party that wished to avoid the spirit of its bargain. The better approach . . . is to treat a contract for what it is - an exchange of solemn promises - and enforce the objectively reasonable expectations of the parties. The transaction in question here is an artifice intended to thwart plaintiff's legitimate contractual expectation that it would have a right of first refusal before the partnership interest owned by CRCO could be transferred to someone outside the Cellular family of companies. As such, the Purchase Agreement violates the covenant of good faith and fair dealing that Oregon law implies in every contract . . . [T]he doctrine of good faith is not a new material term created by the court, but rather a term implied by law in every contract to give effect to the legitimate expectations of the parties that were created by the language of their contract. Id.
151. RUPA §§ 404(d) and 103(b)(5) are inconsistent with this analysis to the extent that they identify good faith as a distinct obligation. RUPA §§ 404(d), 103(b)(5).
152. See, e.g, Ehrlich v. Howe, 848 E Supp. 482, 490-91 (S.D.N.Y. 1994) (construing expulsion agreement in light of the general contractual duty of good faith). For a discussion of interpretation of and judicial standards of good faith in the enforcement of expulsion provisions, see Hillman, supra note 61, at 559-81.
153. See UPA § 31(1)(d) (1914). Though RUPA § 601(3) does not explicitly provide that the expulsion be "bona fide" in accordance with the partnership agreement, the general good faith obligation under RUPA § 404(d) applies in this context. See RUPA §§ 601 (3), 404(d).
154. See Lawlis v. Kightlinger & Gray, 562 N.E.2d 435, 442-43 (Ind. Ct. App. 1990); Levy v. Nassau Queens Med. Group, 476 N.Y.S.2d 613, 614 (App. Div. 1984); Gelder Med. Group v. Webber, 363 N.E.2d 573, 577 (N.Y. 1977).
155. See Jones v. Chester, 363 S.W.2d 150, 157 (Tex. Civ. App. 1962, writ ref'd n.r.e.) (refusing to enforce a liquidated damages provision as "unconscionable" and a "forfeiture" because the provision would punish the involuntarily terminated partner out of proportion to any damage incurred by the partnership because of his departure). Some cases, in upholding expulsion, have pointed out that the expelled partner received substantial consideration for their interests. See Smart v. Hernandez, 66 A.2d 643, 646-48 (N.H. 1949); Webber, 363 N.E.2d at 576.
156. See Fisher v. Parks, 618 N.E.2d 1202, 1209-10 (Ill. App. Ct. 1993); Rodman v. Reid & Priest, 562 N.Y.S.2d 55, 56 (App. Div. 1990); Holman v. Coie, 522 P.2d 515, 522-23 (Wash. Ct. App. 1974). Although the expulsion provision may not require special procedures, these may be inherent in other provisions of the agreement. For example, in Bohatch v. Butler & Binion, the court held that the firm breached the partnership agreement by reducing the expelled partner's tentative distribution to zero without the notice the agreement required for reducing the distribution. 977 S.W.2d 543, 547 (Tex. 1998).
157. See Smart, 66 A.2d at 646; Gill v. Mallory, 80 N.Y.S.2d 155, 156-57 (App. Div. 1948); Holman, 522 P.2d at 522; Cathy Lynn Carver & Jovina R. Hargis, The Expulsion Clause in a Partnership Agreement: A Pre-Planned Dissolution, 13 U.C. DAVIS L. REV. 868, 873 (1980).
158. RUPA § 601 cmt. 4 (1994 & Supp. 1997).
159. See Webber, 363 N.E.2d at 576; Balme v. Satterwhite, 594 N.YS.2d 158, 159 (App. Div. 1993); Holman, 522 P.2d at 524; see also Rhoads v. Clifton, Gunderson & Co., 411 N.E.2d 1380, 1382 (Ill. App. Ct. 1980) (upholding expulsion under agreement providing for expulsion of partner whose "affiliation with this firm has become detrimental to the best interest of the firm").
160. See supra notes 54-88, 91-104, and accompanying text.
161. See Vestal, supra note 5, at 1127-33.
162. See supra notes 15-24 and accompanying text.
163. 560 A.2d 619 (N.H. 1989).
164. See id. at 623.
165. See supra text accompanying notes 139-44.
166. 905 S.W.2d 597 (Tex. App. 1995), aff'd, 977 S.W.2d 543 (Tex. 1998).
167. See id. at 602, 604.
168. See id. at 604.
169. See Bohatch, 977 S.W.2d at 543. As discussed infra text accompanying note 180, Bohatch applied a fiduciary analysis because the agreement failed to specify a cause requirement.
170. Id. at 552 (Hecht, J., concurring).
171. 664 N.E.2d 239 (Ill. App. Ct. 1996).
172. See id. at 246.
173. See id. at 242.
174. See infra notes 184-93 and accompanying text (discussing expulsion of whistleblowers).
175. Beasley, Cadwalader, Wickersham & Taft, No. CL-94-8646, 1996 WL 43877 (Fla. Cir. Ct. July 23, 1996), aff'd in part, rev'd in part, 728 So. 2d 253 (Fla. Dist. Ct. App. 1998).
176. See supra notes 54-88, 91-104, and accompanying text.
177. Beasley, 1996 WL 438777, at *6.
178. See supra text accompanying note 86.
179. See Beasley, 728 So. 2d at 257.
180. See Beasley, 1996 WL 438777, at *6.
181. Id. (emphasis added).
182. Improper purpose or bad faith relates at most to the punitive damages issue. As discussed above, the Beasley trial court's holding in favor of punitive damages was questionable. See supra text accompanying note 86. The appellate court affirmed on the limited ground that the firm never objected at trial to the propriety of awarding punitive damages. See Beasley, 728 So. 2d at 259.
183. See supra notes 15-24 and accompanying text.
184. See Fisher v. Parks, 618 N.E.2d 1202, 1211 (Ill. App. Ct. 1993) (finding grounds for expulsion, including excessive jogging by doctor instead of performance of duties); Millet v. Slocum, 167 N.YS.2d 136, 142 (App. Div. 1957), aff'd without opinion, 152 N.E.2d 672 (1958) (expelling partners failed to show "incompatibility" under the agreement where the expelled partner's opposition to office building was based on his honest business judgment).
185. See Ehrlich v. Howe, 848 F. Supp. 482, 491 (S.D.N.Y. 1994) (interpreting law firm agreement providing that expulsion must be "before the partnership" as giving expelled partner a right to attend meeting).
186. These are discussed supra notes 25-120 and accompanying text.
187. See Beasley v. Cadwalader, Wickersham & Taft, No. CL-94-8646, 1996 WL 438777, at *3 (Fla. Cir. Ct., July 23, 1996) (holding that this was not an expulsion provision), aff'd in part, rev'd in part, 728 So. 2d at 253. Cf. Golden v. McDermott, Will & Emery, 702 N.E.2d 581, 588 (Ill. App. Ct. 1998) (holding that it was not duress to give partner about to be expelled the option to resign).
188. Cf. Estate of McKay v. Moses, 343 N.E.2d 45, 51 (Ill. App. Ct. 1976) (holding that a partner may not avoid the agreed consequences of withdrawal by serving a notice of "termination," thereby attempting to trigger the "termination" or dissolution provisions of the agreement); Hunter v. Straube, 543 P.2d 278, 281 (Or. 1975) (holding that a partner could not avoid the effect of provisions in the partnership agreement applying to retirement simply by dissolving the partnership by express will); Cowan v. Maddin, 786 S.W.2d 647, 653 (Tenn. Ct. App. 1989) (same).
189. Cf. Moran, Shuster, Carignan & Knierim v. August, 657 A.2d 736, 740 (Conn. Super. Ct. 1994) (holding that a partner was not entitled to retirement compensation under the partnership agreement because he withdrew and started his own firm, thereby triggering a separate provision for withdrawal compensation), aff'd, 657 A.2d 229 (Conn. 1995); Robertson v. Southwood, 447 N.W.2d 616, 620 (Neb. 1989) (holding that partner's notice of termination did not trigger the withdrawal provisions of the partnership agreement because partner did not offer to sell interest back to partnership as provided in contract); Couch v. Langan, 470 N.Y.S.2d 959, 960 (App. Div. 1984) (holding that a suit for dissolution triggered the "dissolution" rather than the "withdrawal" provisions of the partnership agreement, although the plaintiff was, in effect, seeking to withdraw), rev'd on other grounds, 473 N.E.2d 248 (N.Y. 1984).
190. See Bohatch v. Butler & Binion, 977 S.W.2d 543, 546 (Tex. 1998).
191. See supra text accompanying notes 139-44.
192. See supra text accompanying note 159.
193. See supra notes 8-24 and accompanying text.
194. See MODEL RULES OF PROFESSIONAL CONDUCT, Rule 8.3(a) (1999); MODEL CODE OF PROFESSIONAL RESPONSIBILITY DR 1-103(A) (1999).
195. See MODEL RULES OF PROFESSIONAL CONDUCT, Rule 8.3(a) (1999); MODEL CODE OF PROFESSIONAL RESPONSIBILITY DR 1-103(A) (1999).
196. 609 N.E.2d 105 (N.Y. 1992).
197. See id. at 109.
198. Id. at 108; see also Mulder v. Donaldson, Lufkin & Jenrette, 611 N.Y.S.2d 1019, 1023 (Sup. Ct. 1994) (applying Wieder to a securities dealer). The courts have declined to apply Wieder to employees where, unlike lawyers and securities professionals, ethical and legal duties are not at the core of their employment. See, e.g., Fry v. McCall, 945 E Supp. 655, 667 (S.D.N.Y. 1996) (state employee).
199. See Winston & Strawn v. Nosal, 664 N.E.2d 239, 246 (Ill. App. Ct. 1996).
200. Bohatch v. Butler & Binion, 977 S.W.2d 543, 546 (Tex. 1998).
201. See id. at 548.
202. For a contrary conclusion see Margaret Kline Kirkpatrick, Comment, Partners Dumping Partners: Business Before Ethics in Bohatch v. Butler & Binion, 83 MINN. L. REV. 1767, 1797 (1999) ("Because maintaining the ethics of the legal profession is of greater importance than ensuring the livelihood of any given firm, the court should have found that Butler & Binion was liable for expelling Bohatch for adhering to the ethical rules of the legal profession.").
203. Rule 8.3(a) requires reporting of a violation of the ethical rules "that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects." MODEL RULES OF PROFESSIONAL CONDUCT Rule 8.3(a) (1999).
204. Such perverse effects are typical in applying ethical rules to law firms. See Ribstein, supra note 8, at 1735.
205. 42 U.S.C. §§ 2000e-2(a)(1994).
206. 29 U.S.C. § 623(a)(1).
207. Id. § 630(f).
208. See Hishon v. King & Spalding, 467 U.S. 69, 77 (1984); Hopkins v. Price Waterhouse, 920 F.2d 967, 975 (D.C. Cir. 1990); Ezold v. Wolf, Block, Schorr & Solis-Cohen, 751 F. Supp. 1175, 1190-91 (E.D. Pa. 1990), rev'd, 983 F.2d 509, 547 (3d Cir. 1993) (arguing that plaintiff's failure to show pretext of sexual discrimination as a reason for not admitting the associate to partner status).
209. See Hishon, 467 U.S. at 79 (Powell, J., concurring).
210. Hopkins, 920 F.2d at 979.
211. See Caruso v. Peat, Marwick, Mitchell & Co., 717 F. Supp. 218, 220 (S.D.N.Y. 1989); Caruso v. Peat, Marwick, Mitchell & Co., 664 F. Supp. 144, 148 (S.D.N.Y 1987); Simpson v. Ernst & Young, 850 F. Supp. 648, 663 (S.D. Ohio 1994); see also Troy D. Ferguson, Comment, Partners as Employees Under the Federal Employment Discrimination Statutes: Are the Roles of Partner and Employee Mutually Exclusive?, 42 U. MIAMI L. REV. 699, 722 (1988) (advocating an "economic realities test" under which some partners would be employees for anti-discrimination law purposes).
212. See Wheeler v. Hurdman, 825 F.2d 257, 276 (10th Cir. 1987); Rhoads v. Jones Fin. Cos., 957 F. Supp. 1102, 1110 (E.D. Mo. 1997); Simpson, 850 F. Supp. at 663. For a case characterizing the plaintiff as a partner under this test, see Ehrlich v. Howe, 848 F. Supp. 482, 489 (S.D.N.Y. 1994). For a discussion of the employment discrimination cases, see BROMBERG & RIBSTEIN, supra note 34, § 2.02(b)(2), at 2:12-2:22.
213. See supra notes 194-201 and accompanying text.
214. See supra text following note 24.
215. See supra note 201.
216. See supra note 201.
217. See supra text accompanying note 99.
218. For similar arguments in the securities context, see Larry E. Ribstein, Form and Substance in the Definition of a "Security": The Case of Limited Liability Companies, 51 WASH. & LEE L. REV. 807, 824-32 (1994). See generally Larry E. Ribstein, Private Ordering and the Securities Laws: The Case of General Partnerships, 42 CASE W. RES. L. REV. 1 (1992).
219. For similar arguments in the securities context, see Larry E. Ribstein, Form and Substance in the Definition of a "Security": The Case of Limited Liability Companies, 51 WASH. & LEE L. REV. 807, 824-32 (1994). See generally Larry E. Ribstein, Private Ordering and the Securities Laws: The Case of General Partnerships, 42 CASE W. RES. L. REV. 1 (1992).