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Washington Lawyer

Legal Spectator: Partners as Friends

From Washington Lawyer, January 2014

By Jacob A. Stein

spectator“Indeed the words ‘friend’ and ‘friendship’ have become so stretched and extended as to have lost a good deal of their meaning, and this even before we begin to ask for lines of demarcation between friendship and other relationships. . . .[1]” 
                                                                   —A. C. Grayling

Mr. Grayling’s recent book, Friendship, is a history of those who defined the meaning of the word. He brings in the Greek and Roman authors and the philosophers who have taken the subject seriously, people such as Plato and Aristotle and many others, with words such as these:

Real friendship is a slow grower, and never thrives unless engrafted upon a stock of known and reciprocal merit.    
                                                            —Lord Chesterfield

Cicero (106–43 B.C.) wrote about friendship. He was in need of protection from so-called friends in the circumstances of Julius Caesar’s death. Here are Cicero’s comments:

Friendship is nothing else than an accord in all things, human and divine, conjoined with mutual good-will and affection.
                                                           —Cicero, De Amicitia, 
                                                                            Ch. vi, sec. 20

Cicero was a lawyer. However, I don’t think he had time to give attention to his civil law practice. If he had, he would have advised the rich Roman businessmen about the elements of a partnership. Roman law, as it was then, is much like our general partnership law. Two or more people shake hands and agree they are now on a profit and loss status, and each is the agent of the other in this fiduciary relationship. The English took up the Roman law and converted it to their laws. These laws were brought to the American colonies.

Now back to our friends. I have met over the years many lawyers who have had a small partnership practice, and all were close friends. When one of the partners had a serious problem, he knew he could see a co-partner only two doors away. His friend listens and sees things that the actor before him does not. The actor does not see the whole play. He solves the problem. Furthermore, in those days, when a partner lost a big case, his friends, right then and there, put together the memorandum requesting a new trial.

Judge Benjamin Cardozo defined the obligation in a fiduciary relationship for the New York Court of Appeals in Meinhard v. Salmon, 249 N.Y. 458, 463–64, 164 N.E. 545 (1928):

Joint adventurers, like co-partners, owe to one another, while the enterprise continues, the duty of the finest loyalty. Many forms of conduct permissible in a workaday world for those acting at arm’s length are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the marketplace. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior. As to this there has developed a tradition that is unending and inveterate. Uncompromising rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty by the “disintegrating erosion” of particular exceptions. . . . Only thus has the level of conduct for fiduciaries been kept at a level higher than that trodden by the crowd. It will not consciously be lowered by any judgment of this court. 
                                                           —Benjamin N. Cardozo.

That strict obligation has drifted away. The general partnership and its fiduciary obligations has been replaced by the limited liability partnership and the corporate veil. The individuals are protected.

There are law firms with outposts all over the world. Many partners spend years without meeting any of their fellow partners.

In reading about friendship, I came across many people who exalted in the subject of friendship and its worthiness. However, I did come across some comments that question this exaltation. Here are a few:

The holy passion of Friendship is of so sweet and steady and loyal and enduring a nature that it will last through a whole lifetime, if not asked to lend money.
                                                        —Mark Twain, 
                                                           Pudd’nhead Wilson’s Calendar

Love thy neighbor as thyself, but choose your neighborhood.
                                                        —Louise Beal

There is no stronger bond of friendship than a mutual enemy.
                                                      —Frankfort Moore

Nothing so fortifies a friendship as a belief on the part of one friend that he is superior to the other.
                                                     —Honoré de Balzac (1799–1850)

If we were all given by magic the power to read each other’s thoughts, I suppose the first effect would be to dissolve all friendships.
                                                         —Bertrand Russell

My friends, I wish you all good times, good clients, good reputations, and those of you who wish to become judges, because you are specially qualified, will be appointed.

Reach Jacob A. Stein at [email protected].

[1] Grayling, A. C., Friendship, New Haven and London: Yale University Press, 2013.