NY BigLaw Partner Wins Lion's Share of
Partnership, Law License in Divorce

By Noeleen G. Walder
New York Law Journal
New York Lawyer
August 4, 2009

An attorney who rose to partner by virtue of his own "tenacity" and "perseverance," has to hand over only 25 percent of the value of his partnership interest to his estranged spouse, a Westchester judge has ruled.

During most of his nearly 30-year marriage, Stuart Fleischmann, a partner in Shearman & Sterling's capital markets group, was the sole breadwinner, while his wife, Toni, stayed at home with the couple's three children, attended firm functions and hosted clients at their home.

For the most part, the judge said that her activities represented her overall contributions to the marriage, as opposed to her specific contributions to Mr. Fleischmann's appointment as a Shearman & Sterling partner, Supreme Court Justice Lewis Jay Lubell held in Fleischmann v. Fleischmann In September 1979, Mr. Fleischmann enrolled at Villanova Law School, where he finished half of the curriculum before marrying Ms. Fleischmann on Dec. 27, 1980.

Mr. Fleischmann paid his way through law school, using scholarships, summer earnings, gifts from his parents, and savings.

In 1982, after graduating second in his class from Villanova, Mr. Fleischmann made hundreds of phone calls and traveled to New York on several occasions to interview for positions. His "unwavering" efforts paid off when he landed an associate position at Shearman & Sterling, according to the decision.

"While still childless and with similar vigor," Ms. Fleischmann, a Rutgers University graduate, pursued her own career. After working in the anesthesiology department at New York University Medical Center, she returned to Rutgers to earn a master's degree in allied health. Mr. Fleischmann paid for most of his wife's educational expenses.

In April 1989, Ms. Fleischmann left her job as a marketing consultant to give birth to the couple's first child. She then stayed home to raise him and his two younger siblings and oversee the daily operations of the household.

In November 1990, Mr. Fleischmann obtained a .486 percent stake in Shearman & Sterling, an opportunity he had been able to pursue as a result of his wife's "devotion to the household and the children," according to the decision. From 1989 onwards, Mr. Fleischmann billed more than 3,000 hours a year.

For her part, Ms. Fleischmann attended her husband's business events and hosted clients and coworkers at their home. However, she never referred clients to her husband or brought clients to his office.

On Jan. 23, 2006, Ms. Fleischmann, 51, filed for divorce. She requested a 50/50 split of both the law license and partnership interests.

In a 2007 stipulation, the couple agreed that Mr. Fleischmann, 52, had constructively abandoned his wife, and decided to share residential and physical custody of the children, to sell the marital home and take up separate residences in Scarsdale.

The following year, Justice Lubell oversaw a 10-day trial on the remaining issues, including the equitable distribution of Mr. Fleischmann's law license and partnership interest.

At trial, the parties agreed that Mr. Fleischmann's law license was worth $2.8 million, and stipulated that the marital component of his license amounted to $1.4 million. The couple further stipulated that Mr. Fleischmann's partnership interest amounted to between $322,000 and $709,000, depending on whether he retained his employee pension accounts and tax-deferred retirement plans in his name.

'Modest Contributions'

Late last month, Justice Lubell held that Ms. Fleischmann, who contributed "minimally" to her estranged husband's attainment of his law license, was entitled to 10 percent of the license's value under §236B(5)(c) of the Domestic Relations Law.

In reaching this determination, the judge noted that Ms. Fleischmann did not pay for any part of her husband's education, or assist Mr. Fleischmann with his law school or bar examination studies, "devoted much of her efforts to her own studies" and contributed "modest and unspecified earnings to the marital pot."

"Where only modest contributions are made by the non-titled spouse toward the other spouse's attainment of a degree or professional license, and the attainment is more directly the result of the titled spouse's own ability, tenacity, perseverance and hard work, it is appropriate for the courts to limit the distributed amount of that enhanced earning capacity," Justice Lubell wrote in awarding Ms. Fleischmann $140,000 or 10 percent of the marital component of Mr. Fleischmann's license.

Ms. Fleischmann fared only slightly better when it came to equitably dividing her estranged husband's partnership interest.

While Mr. Fleischmann worked thousands of billable hours during his "steady rise to partner," the "responsibilities of the household leading to the partnership were not disproportionately borne by Toni," particularly since the couple's first child was not born until Mr. Fleischmann was on the cusp of becoming partner, Justice Lubell wrote.

The judge found that Ms. Fleischman's "efforts and contributions are, for the most part, relegated to 'overall contributions' to the marriage, rather than specific contributions to [Mr. Fleischmann's] attainment of his partnership interest."

However, the judge said that it "cannot be ignored" that Ms. Fleischmann became a stay-at-home parent attending to the couple's children on a full-time basis at the same time she attended firm functions and events and hosted clients and coworkers at the martial residence.

Therefore, the judge concluded that she was entitled to 25 percent, or $177,250, of her estranged husband's partnership interest.

Herman Tarnow, of the Tarnow Law Firm in Naples, Fla., represented Ms. Fleischmann. He declined to comment.

Ronald J. Bavero of Berman Bavero Frucco & Gouz represented Mr. Fleischmann. "This decision for the trial judge represents a continuation of the recent trend of the Appellate Division, Second Department, which is to limit the equitable share for licenses and practices" of law partners and other professionals, Mr. Bavero said.