Been watching suits lately and I’ve gotten to the point in season 6 where they use the buy in fund to finance a settlement, and overall I’m confused as to the idea of what a buy in is. They also mention concealing it from the partners who have left the firm, because if they found out the ex-partners would come gunning for their money. So, what is a buy in, and how does it work if you leave a firm after you’ve paid the buy in? Are you entitled to the money, or does it stay with the firm?
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Law firms are special that in many places unlike most other business they can only be owned by the professionals who do the work.
Only lawyers can be owners of a lawfirm.
You can’t really buy stock or shares in one or invest money in one.
What does happen is that the lawyers at the top of a law firm are co owners of the firm: partners. They share the profits that the firm makes, while all the other lawyers working there are paid like employees are everywhere else.
However lawyers sometimes leave a firm or eventually retire and stop being partners and new lawyers move up to become partners.
In this case they need to buy into the firm, put money in so they own a part of it. Basically buying part of a firm to become a partner in it and the money paid becomes part of the money the firm has as a whole. That money can be used to pay out those who want to stop being partners. It can sometimes be used for other stuff too, but there are things you can and can’t do with it and who you should tell
It can become quite complicated.
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