Free Attorney Operating Agreement Template
Attorney Operating Agreement
This Attorney Operating Agreement ("Agreement") is made and entered into as of the [Date], by and between the undersigned, who are the members ("Members") of [Your Company Name], a law firm organized under the laws of [State], with its principal place of business at [Your Company Address] ("Company").
I. Recitals
1.1 Background:
This Attorney Operating Agreement ("Agreement") is entered into by and among the undersigned individuals who are licensed attorneys and the founding Members of [Your Company Name]. The Members seek to establish and operate a law firm under the terms and conditions set forth in this Agreement.
1.2 Intent of the Members:
The Members desire to form a professional legal entity for the purpose of providing high-quality legal services to clients in compliance with all applicable laws and regulations. This Agreement is intended to outline the structure, governance, and operations of the Company, as well as the rights and responsibilities of each Member.
1.3 Binding Effect:
This Agreement represents the complete and binding understanding between the Members regarding the operation of [Your Company Name]. Any prior agreements, discussions, or understandings between the Members that are inconsistent with this Agreement are hereby nullified.
1.4 Good Faith and Professional Standards:
The Members commit to conducting the business of the Company in good faith and with adherence to the highest standards of professionalism and ethics. This includes ensuring compliance with the rules of professional conduct as established by the [State] Bar Association and other relevant legal authorities.
1.5 Legal Entity Formation:
The Members agree that [Your Company Name] shall be formed as a [type of entity, e.g., Professional Limited Liability Company (PLLC)] under the laws of [State]. The Members have executed and filed all necessary documents to formalize the establishment of the Company.
1.6 Mutual Cooperation:
The Members acknowledge that the success of [Your Company Name] relies on mutual cooperation, shared commitment to client service, and the equitable division of responsibilities, profits, and resources. The Members agree to work collaboratively and resolve disputes constructively to achieve the objectives of the Company.
II. Formation of the Company
2.1 Company Name:
The name of the law firm is [Your Company Name]. The name is chosen to reflect the core values and purpose of the firm. Any future change to the Company’s name may be made upon unanimous consent of the Members.
2.2 Principal Office:
The principal office of the Company is located at [Your Company Address]. The Members may, at any time, establish branch offices or relocate the principal office within the jurisdiction. Any relocation of the principal office must be agreed upon by the Members in writing.
2.3 Formation Date:
This Agreement shall be effective as of [Date]. The formation of the Company shall be legally recognized by the jurisdiction of [State], and the Company shall comply with all relevant regulations in the jurisdiction where it operates.
2.4 Purpose:
The purpose of the Company is to operate as a law firm providing legal services in the fields of corporate law, intellectual property law, estate planning, and litigation. The Company may, in the future, decide to expand or modify its areas of practice to include additional specialties such as environmental law or international trade law through mutual agreement between the Members. Any change to the Company’s purpose or business activities must be reflected in an amendment to this Agreement.
III. Membership and Capital Contributions
3.1 Members:
The Members of the Company are the undersigned attorneys. The initial Members are:
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[Attorney Name 1], with the title of [Title], residing at [Attorney Address]
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[Attorney Name 2], with the title of [Title], residing at [Attorney Address]
Additional members may be added upon the unanimous approval of the existing Members, subject to the provisions of this Agreement.
3.2 Capital Contributions:
Each Member shall contribute capital to the Company as follows:
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[Attorney Name 1] will contribute [$50,000].
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[Attorney Name 2] will contribute [$50,000].
The contributions may be in the form of cash, assets, or other resources deemed necessary for the business. Additional capital contributions may be required at any time, provided all Members agree to such contributions in writing.
3.3 Additional Contributions:
The Members agree that the Company may require additional capital contributions to meet its financial obligations, expand its operations, or for other purposes deemed necessary. The Members shall meet and discuss such contributions, and no Member shall be obligated to contribute unless agreed by all parties.
IV. Management and Operations
4.1 Management Structure:
The Company shall be managed by its Members. Each Member shall have an equal vote in the management of the Company, regardless of the amount of capital contributed. Any decision requiring a vote shall be decided by a majority of the Members unless otherwise stated in this Agreement. Should a situation arise where decisions cannot be made by consensus, the Members agree to seek a neutral third-party mediator or arbitrator to resolve the issue.
4.2 Responsibilities of Members:
Each Member agrees to perform their responsibilities in a professional and diligent manner. These responsibilities include but are not limited to:
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Representing clients within the scope of the Company’s legal practice and ensuring the firm’s clients receive top-quality service.
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Overseeing and managing the operational, administrative, and financial activities of the firm.
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Developing and maintaining business relationships that promote the growth and success of the Company.
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Ensuring the Company adheres to ethical and legal standards as set forth by the state bar association and other governing authorities.
Each Member will also be responsible for creating and following firm policies that govern work processes, client communication, and employee relations.
4.3 Decision-Making:
Decisions of the Company shall be made by a majority vote, unless specified otherwise in this Agreement. In the event of a tie vote, the matter shall be referred to a neutral third-party mediator agreed upon by the Members. If mediation is unsuccessful, the issue shall be resolved by arbitration. The Members agree to act in the best interest of the Company at all times.
V. Profit and Loss Distribution
5.1 Profit and Loss Allocation:
Profits and losses of the Company shall be allocated to the Members in proportion to their capital contributions. Specifically:
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[Attorney Name 1] shall receive [50%] of the profits and losses.
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[Attorney Name 2] shall receive [50%] of the profits and losses.
If there are any additional Members, their share of profits and losses shall be proportionally determined based on their capital contributions.
5.2 Draws and Distributions:
Each Member may request a draw or distribution from the profits of the Company, subject to the availability of funds and the approval of the Members. Draws and distributions may be made periodically or upon request, but must be done in accordance with the financial standing and operational needs of the firm. Draws may be subject to tax withholding as required by law.
5.3 Retained Earnings:
The Company may retain a portion of its earnings for reinvestment in the business, including expansion, marketing, and employee development. The retention of earnings will be determined by the Members during annual meetings.
VI. Compensation
6.1 Member Compensation:
Each Member shall be entitled to receive compensation for their legal work performed on behalf of clients, in addition to any profit distributions. Compensation will be based on an hourly rate, percentage of fees generated, or other methods determined by the Members. The Members agree to establish a formal compensation plan that is competitive with industry standards and reflects the contributions made by each Member.
6.2 Employee Compensation:
Employees of the Company, if any, shall be compensated according to employment agreements negotiated by the Members. Employee compensation will include salaries, bonuses, and benefits, all determined in accordance with the Company’s financial standing and industry standards.
6.3 Bonuses and Incentives:
The Company may also offer bonuses or other incentive programs to Members or employees based on performance, profitability, and achievement of business goals. These programs will be developed and approved by the Members, and such bonuses may be paid annually or as agreed upon.
VII. Books and Records
7.1 Accounting System:
The Company shall maintain its books and records in accordance with generally accepted accounting principles (GAAP) and applicable tax laws. The Company’s fiscal year shall end on [date]. The financial statements of the Company will be prepared annually and provided to all Members for review.
7.2 Inspection of Books:
Each Member shall have the right to inspect and copy the books and records of the Company at any reasonable time. The Company will make all necessary documents, including financial reports, available to Members upon request.
7.3 Audit of Financial Records:
The Members agree that, at least once every [2] years, an independent auditor will be engaged to perform an audit of the Company’s financial records. The Members will mutually agree on the selection of an auditor.
VIII. Liability and Indemnification
8.1 Liability of Members:
No Member shall be personally liable for the debts, liabilities, or obligations of the Company, except as provided by applicable law or as otherwise agreed upon in writing by the Members. Members will be protected from personal liability under the law, but they will remain responsible for their own actions, including malpractice.
8.2 Indemnification:
The Company agrees to indemnify each Member against any personal liability, loss, or expense arising from their good faith actions in the ordinary course of the Company’s business, except in cases of gross negligence, fraud, or willful misconduct. The Company will maintain adequate insurance to cover such indemnity, including professional liability insurance.
IX. Withdrawal and Termination
9.1 Withdrawal of a Member:
Any Member may voluntarily withdraw from the Company with at least [90] days’ written notice to the other Members. Upon withdrawal, the departing Member shall be entitled to the return of their capital contribution, subject to the terms of this Agreement. If the withdrawal impacts the Company’s ability to continue operating, the remaining Members will meet to discuss the future of the firm.
9.2 Dissolution of the Company:
The Company may be dissolved at any time by a unanimous vote of the Members. In the event of dissolution, the assets of the Company shall be liquidated, and the proceeds distributed first to pay off any debts or liabilities of the Company, with any remaining balance distributed to the Members in proportion to their capital contributions.
9.3 Business Continuity Plan:
In the event of the sudden incapacity, withdrawal, or death of a Member, the Company will follow a pre-determined business continuity plan, including provisions for the buyout of the Member's interest in the firm, as agreed upon by the remaining Members.
X. Dispute Resolution
10.1 Mediation and Arbitration:
In the event of any dispute arising out of this Agreement, the Members agree to first attempt to resolve the dispute through mediation. If mediation is unsuccessful, the dispute shall be settled by binding arbitration under the rules of the American Arbitration Association (AAA). The arbitration decision will be final and binding on all Members.
10.2 Jurisdiction:
Any legal action related to this Agreement shall be filed in the courts located in [County], [State], and the Members consent to the jurisdiction and venue of such courts.
XI. Miscellaneous
11.1 Amendment:
This Agreement may be amended only by a written instrument signed by all Members. Any amendment must be in writing and signed by all Members of the Company.
11.2 Governing Law:
This Agreement shall be governed by and construed in accordance with the laws of the state of [State]. In the event of any inconsistency between this Agreement and the laws of [State], the laws of [State] shall prevail.
11.3 Severability:
If any part of this Agreement is determined to be invalid or unenforceable by a court of competent jurisdiction, the remainder of the Agreement shall remain in effect, and the invalid or unenforceable provision shall be replaced with a valid provision that reflects the intent of the original provision.
IN WITNESS WHEREOF, the undersigned have executed this Attorney Operating Agreement as of the date first written above.
[Your Company Name]
[Attorney Name 1], Member
[Attorney Name 2], Member
