When a law firm partnership dissolves, among the serious issues requiring analysis and consideration is the firm’s office lease. This is particularly the case with law firms in Manhattan where lease obligations often represent a considerable proportion of a law firm’s finances, but, no matter where the partnership does business, it is likely that its office lease is a substantial expense. Issues of prime concern include whether the lease on dissolution creates personal liability to partners, whether the firm as an entity on dissolution has accelerated liability, how can the leased space be used by the partners upon dissolution, and whether, in the context of an accounting, the lease is an asset or liability of the firm.
Last month, the Appellate Division, Third Department, affirmed the grant of summary judgment concerning the dissolution of an upstate law firm that addressed the firm’s lease.1 The decision raises issues common in many law firm partnership dissolutions and is worth exploring.
‘Wiggins v. Kopko’
