How much is a partnership agreement?
What should I expect to pay for an attorney to help me with a partnership agreement in Georgia? There will be 2 partners. We are interested in flips and buy and holds. I had one attorney tell me it starts at $3500 and goes up from there, depending on how complicated it gets.
I paid $500 to setup my LLC and partnership agreement. We provided an excellent and very detailed skeleton though
@Account Closed attorneys that I refer my clients to charge about $350 an hour. For a basic real estate partnership, expect it to take 1-2 hours to complete.
Make sure you are utilizing attorneys who specialize in real estate. Unless you have quite the complex partnership structure, I feel that $3,500 is high for a typical real estate partnership.
Thank you for the advice. I will keep looking for another attorney. I'm waiting to hear back from a couple more. I thought I had seen on BP where people paid $500 - $750 for a partnership agreement. I thought $3500 sounded too high.
There's a big difference between proofing/editing your agreement and creating one from scratch. You two should really put together a good framework of what your looking for ...
Roles, ownership, initial investments, dissolvement options, how you're planning on adding new partners, who makes decisions, etc etc
Might have to find the junior attorney at a firm. They are generally hungrier for business. Something small like you are talking about you probably do not need the big bucks guy used to doing ultra complex agreements.
Sounds like he wants to charge for the complicated stuff and do an easy one for a large pop of money.
Originally posted by @Brandon Holley:
There's a big difference between proofing/editing your agreement and creating one from scratch. You two should really put together a good framework of what your looking for ...
Roles, ownership, initial investments, dissolvement options, how you're planning on adding new partners, who makes decisions, etc etc
I do have a lot of it written out already. I've seen some good forum posts about what to include. I need the attorney's help with a couple things I wasn't sure about and then they can just look over the rest. Doesn't sound like a $3500 job to me.
I draft my own. I got a free template off RocketLawyer.com and modified it accordingly.
The purpose of the agreement you're doing is as follows:
- To define the percentage each partner owns
- To define the compensation structure
- To define the purpose of the partnership
- To define the capital contributions each partner will make
- To define who's in charge
- To define how the books and checking accounts are handled
To define the state laws that will be applied
To define how net losses are handled - To define what the recourse is when you guys pull your pistols out and everybody starts shooting and wanting to go to court
Understand that contracts aren't worth the paper they're printed on.
You're each going to do whatever you're going to do regardless of a piece of paper.
The only purpose of the agreement is to give up rights you have so you can be sued. I did a whole post on this on my website explaining how it works in real life.
The contract is worth no more than the liquid capital each partner has that they're willing to stupidly give to an attorney to litigate. Since it costs a minimum of $250k to get to a trial, you'll get tired of paying $10-$15k/mo each to an attorney to fight each other.
Most partnership agreements I've seen have an arbitration clause to avoid this.