Hey partner, are you sure you're tenured?

The recent headline in The Wall Street Journal would have been unthinkable a decade ago: "Partnership Is No Longer a Tenured Position."

The accompanying article talked about the phenomenon of "de-equitization" -- law firms terminating partners or moving them from the equity rolls to a lesser status in order to improve firm profitability.

In a previous column I suggested that there is nothing surprising or inherently wrong in this. As law firms become more subject to the competitive dynamics of corporate America, they must reflect those dynamics in their own operation. The phenomenon is here, it's going to expand, and every lawyer who is not a sole practitioner must be prepared to think about it.

"De-equitized" lawyers have likely earned good money during their time with the firm, but they will face many hard questions. Did they save enough to be independent, or did their standard of living increase over the years to match their income? What severance package did they receive? Did they receive a pro rata share of the goodwill of the firm? Will their ego be able to gracefully handle the psychological impact of being told "you're not wanted here?"

Some of these questions are highly personal, but others go to the heart of something many lawyers have but too few lawyers understand: their partnership agreement.

If you are the partner in a firm of any size, did you read your agreement before joining the partnership? Could you answer these questions right now?

• How much did you actually pay to join the firm?

• Would you have to pay if you left voluntarily?

• Do you receive severance and your share of your receivables if you leave involuntarily?

• Are you a personal signatory to the firm's line of credit?

• Do you have a real voice in firm management (one wonders -- did the 45 former Mayer Brown partners have a say in the firm's decision to "downsize" them)?

• Is the management system one vote per lawyer or one vote per pro rata share?

Many lawyers leap at the chance to become partner, but don't think the decision through.

If you're an associate at a large firm making a $200,000 salary, is it really worth it for you to become a junior partner with a $250,000 draw and the legal liability that goes with it?

If you're joining the partnership of a small firm, do you know if your up-front contribution is going for the improvement of the firm or is being split among the other partners?

In a firm of any size, do you know if there are only certain times of the year (for example, your anniversary date, or the last day of the fiscal year) when you can leave and get your full investment back?

The partner who can't answer such questions is in the position of the cobbler's children who lack shoes. Before you read through one more contract for a client, read your own -- with your own firm.