A Poughkeepsie lawyer has sued her firm claiming that colleagues changed their partnership agreement behind her back to strip her role in managing the business.
Beth L. Harris is seeking to reverse changes to the partnership agreement, in a June 20 complaint filed in Westchester Supreme Court against Shaw, Perelson, May & Lambert LLP and five equity partners.
“In flagrant contravention” of the partnership agreement’s requirement for all six equity partners to consent to major decisions, according to the complaint, five equity partners, “acting in secrecy and without even informing Beth of their actions,” redefined consensus as requiring five votes.
The firm’s founder, David S. Shaw, stated in an email that “the matter will be addressed in an appropriate forum and we expect a resolution which will be satisfactory to all of the partners.” Meanwhile, “We are conducting business as usual in the interest of our clients.”
The firm primarily represents schools, including more than three dozen public school districts in the region. It has offices in Poughkeepsie and Valhalla.
Harris was hired in 2002 and became an equity partner in 2008.
In 2015, according to the complaint, the six equity partners adopted a partnership agreement that required unanimous votes on major decisions such as a merger with another firm, dissolution of the partnership and expulsion of equity partners.
The agreement itself, the complaint states, “may not be amended, altered or modified except by a writing executed by all of the equity partners.”
But in March 2023, while Harris was on a temporary medical leave, the other five equity partners allegedly amended the partnership agreement to require five votes for major decisions.
When Harris returned to work a few days later she accidentally discovered an unsigned version of the amendment in the firm’s document management system, according to the complaint. She confronted Shaw who purportedly said, “What are you worried about? That agreement isn’t worth the paper it’s written on.”
At that point, Harris claims, she had no reason to suspect that her colleagues had signed the addendum.
A year later, this past March 24, she received a copy of a signed addendum.
She says she was shocked to learn that her partners had secretly executed the addendum, “which was obviously intended to impair her management and control rights and property interest in the firm, without her knowledge or consent.”
Harris asked her partners to disavow the addendum but no one has done so, according to the complaint, and she claims she has not been allowed to inspect the firm’s books and records.
Harris accused the firm and her partners of breaches of contract. She is asking the court to nullify the partnership addendum, require unanimous consent for decisions, and grant her access to the books and records.
Besides David Shaw, the other equity partners, who are named as defendants, are Michael K. Lambert, Steven M. Latino, Margo L. May, and Julie M. Shaw.
