Monday, November 27, 2017
The Jewel Doctrine; More from Dean Weidner
The Jewel Doctrine posits that, upon the dissolution of a partnership (and especially a law firm), business that is being performed at the time of dissolution continues to be an asset of the partnership. Hence, the proceeds of that work will be applied to the satisfaction of partnership obligations with the balance split amongst the partners (now former partners) in accordance with their respective sharing ratios. In connection with the breakup of major money center law firms, most precipitated by the 2008 economic crisis, the firms to which those partners went have asserted that the Jewel Doctrine should not apply, and they should keep all of the proceeds of the transferred projects. In contrast, those in charge of the winding up and termination of those failed firms, many having significant third party debts, have argued that the Jewel Doctrine should apply. This is a topic that Tara McGuire and I addressed in an article titled Conflicting Views as to the Unfinished Business Doctrine, 46 Texas Journal of Business Law 1 (2015). HERE IS A LINK to that article.
Most recently, Dean Don Weidner, whose credentials include having served as the Reporter on the Revised Uniform Partnership Act, has published a piece in the Florida Bar Journal titled Leaving Law Firms With Client Fees: Florida’s Path. In this article, Dean Widener argues that the Jewel Doctrine is correct, especially as to contingent fee cases, and that as well it should be applied beyond situations of a law firm’s dissolution. HERE IS A LINK to Dean Weidner’s article.