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Much Ado About Not that Much: RUPA 401(h) and the Unfinished Business Doctrine

By Thomas E. Rutledge

For some 30 years, the Unfinished Business Doctrine, most famously embod­ied in Jewel v. Boxer, was generally accepted as a proper application of partnership law. Under the Unfinished Business Doctrine, fees generated in connection with projects in effect at the time of the firm’s dissolution are to be paid back to the firm in order that they may be shared amongst all of the partners in accordance with their agreement as to sharing ratios. Applying the Uniform Partnership Act as then in effect in California, the Jewel court found that, (i) after dissolution, the firm continues for the purpose of completing partnership business and (ii) no partner is entitled to additional compensation (i.e., com­pensation beyond that agreed to as a sharing ratio under the existing partnership agreement) for completing the partnership’s unfinished business. While the Jewel case was focused upon matters undertaken on a contingency basis, in no manner was the decision or the principles there embodied so restricted.

Since then, courts across the country have accepted the validity of the Unfinished Business Doctrine and have required, upon a firm’s dissolution, that the proceeds earned on matters pending at the time of dissolution, including work being done on an hourly basis, be remitted to the dissolved firm. Of more recent vintage, the Colorado Supreme Court has endorsed the Unfinished Business Doctrine, there in the context of an LLC.

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