And as I said earlier, the business always has to be properly managed. The bottom line can't be left to a matter of chance or someone's unrealistic dream of what might be. Because the partnership was out of control. Very often because of expansion and new ventures, debt is being incurred to pay the draws of rainmakers and the acquisition costs of practice groups. Power struggles have been known to erupt to decide who should control.
Money is borrowed against receivables to pay operating expenses and partners.
It all comes down to the management of changing circumstances. Because of the enormous risks of being a partner, you will also see a lot movement of professionals, including partners, from one firm to another, taking their clients with them. But there also may have been the threat of the continued costs of these legal battles, which take their toll and may have added to the hard debt as you call it. The culture has to match. But once the merger occurs the practices must be integrated and a high level of communication among partners must occur.