Had this article been written a week earlier, the title would have been, ‘Another one bites the dust…’ because of the news that another big-time law firm was shutting down, this time in Canada. The partners at Heenan Blaikie, a leading player in the Canadian legal services industry for over 40 years, finally voted to throw in the towel earlier this month, after over a year of speculations about the firm’s financial health.
But there is no need to be a Debbie-downer when we are all celebrating success. The law partnership of Udo Udoma & Belo-Osagie is celebrating 30 years in business and proving that partnerships can work in Nigeria. Both partners will probably admit that it has not all been roses and kisses, but learning to manage all the challenges that come with making a partnership work, remaining focused, and being able to adapt to new challenges and opportunities are all part of the recipe for a successful business partnership.
Business co-ownership is like a marriage. Most people go it into trusting, optimistic, expecting happily-ever-after, but the truth is that even in marriage, sometimes people drift apart, goals change, true personas are revealed and the relationship falls apart.
Partnerships can turn once best friends into bitter enemies and create feuds that continue for generations. Just as you would before accepting a marriage proposal, there are several questions that you must ask yourself and get satisfactory answers to before you decide to form a partnership with someone.
Compatibility – Can I work with this person? There is no point going into business with someone whose work persona is not compatible with yours. If you think differently about business ethics, work productivity, and even the level of personal sacrifice needed to get the partnership off the ground, then you probably should not be in business together. Your compatibility is crucial because as the saying goes, ‘a house divided, cannot stand’. On some level, you must be able to vouch for your partner.
Long-term vision – Do I have the same long term vision as my potential partner? In what direction do we want to grow the business? Are we on the same page about how to handle the finances? For instance, to grow the business, are all partners willing to take home a smaller share of the profits so that more capital can be invested into the business?
The Benefit – Is the partnership mutually beneficial? This is where you allow your selfish side to rule. You must gain something from a partnership: additional skill, resources, or just simply economies of scale advantages. Two heads, they say, are better than one, and more heads are better than two. The partner may bring something to the table that you lack – their network of friends and/or business associates, administrative skills, or something else that complements the skills that you have.
Intimacy – Can I be intimate with my potential partner? A partnership forces intimacy on all parties involved. You must share information, make yourself and your resources available for the benefit of the partnership and spend a lot of time together ensuring that the two entities function seamlessly in the partnership. When partners are intimate and committed to the partnership, then issues of sabotage and conflict of interest rarely arise.
Accountability – This is closely related to intimacy. The whole point of going into a business is so that you can make money. You go into a partnership because of the potential to leverage on both skills and resources to make money for yourself and your partner. Nobody wants to feel that they have been cheated, which is why transparency and accountability are essential. The rules about finances must be clearly spelled out for and respected by all concerned.
Exit – What if something goes wrong? How will you end the partnership? Unfortunately, people do not like to think about the possibility that a partnership will fail. Including an exit clause in the articles of incorporation may seem like a pre-nuptial agreement, predicting doom for the relationship, but it is better to think of the what-if situation when everyone is still ‘friends’ because if/when something goes wrong and the partnership has to fold, rarely are people rational in the decisions they make at that point. This is the main ingredient for bad blood and lengthy legal battles.
So while your law school roommate might have been a great study partner or the perfect person to unwind with, they may not be the best business partner for you and that is okay. Do not go into a business partnership with your heart. Use your head so you don’t get burned!