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The Value of Partnership
[Editor's Note: Ed Wesemann developed this article for A&FP based on my inquiry about a Montreal conference he recently conducted on law firm capitalization. I think readers will find Ed's unusual analysis intriguing and valuable.]
When someone becomes an equity partner in a law firm, he or she becomes an owner of an institution that has a substantial value ' certainly greater value than is demonstrated on a cash basis balance sheet. Yet the majority of U.S. law firms admit partners with little or no requirement that they make a purchase of the firm's capital assets.
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