I am coming into a partnership and looking over some of the bills in the company. I noticed the phone service bill is about $215/month which includes 2 lines with unlimited long distance. That seems a little high for the relative small business this runs.

When I left my previous large employer we had just switched to Voice over IP and was going to be a big cost savings for them.

I am curious who I should look into for this and see if it could lower monthly cost for this business.

Who would you recommend for this if I did away with our current analog line?

Services that would be needed:
1. 2 lines
2. 2nd line would need to be for a fax machine as well
3. caller ID
4. Call forwarding

Any suggestions would be greatly appreciated.

You probably can do far better using VOIP but it will require reliable and relatively fast internet. Not sure what phone system if any you are using and if so if it has voip as an native capability. You can run Asterisk on a Raspberry pi and handle two lines and a fax server. So even if your existing hardware if not capable. You can also use a hosted pbx solution and use hardware in the cloud.
The line counts mean less in the VOIP world. Basically you have numbers (DID) that people call into and channels that is basically how many simultaneous calls. You can have one number and handle hundreds of calls if you have the channels. You can have numbers for everyone, or just a main number or both. Fax numbers can be dedicated buy most ip pbx's can detect fax tones and you don't have to have a dedicated number.
Let us know about your internet and location so we can get you more pointers.
Things like asterisk can do voicemail auto attendant, fax server, acd, forwarding, company directory and a few thousand other things, and the software is free.

We use Ooma in our office which works pretty good for $13/month. Our internet is spotty though so we still pay AT&T $40/month for a fax line. We get a lot of invoices for our projects via fax, so it has to be reliable.

We use 8x8 and have been pretty happy with it.

I would also recommend to take a look at a FreePBX setup if you do look to the in-house route. It's based on Asterisk but adds a very nice fully featured Web GUI for the management and voicemail access applications of the system.

https://www.freepbx.org/

I've set this up a a number of smaller businesses (even up to 100 extensions so far) without a problem.

There are several packaged versions of asterisk. I typically use PBX in a flash, which also leverages Freepbx but again your network infrastructure needs to be in order for any VOIP implementation, hosted or run on your own local hardware.