Most lawyers expect the law firm partnership model to wither over the next decade, as the legal services market embraces alternative business structures and technology, while ditching hourly billing – according to a new survey.
The traditional law firm partnership structure is still dominant in the profession but the arrival of alternative business structures has disrupted the status quo and may eventually become the norm in high-volume legal services, according to research.
HMRC is set to scrutinise the status of law firm partners after measures announced in the Budget. The Treasury is to consult on removing the presumption of self-employment for LLP partners and on countering the “artificial allocation of profits to partners”.
A lender has lost its appeal against a High Court ruling that said a solicitor was not liable for its loss in a £2.5m mortgage fraud perpetrated by her former partner because she was not aware of the misrepresentations he made.
Investment by Dragon’s Den star James Caan has given the law firm Knights privileged access to clients and helped boost fee income by 20%, according to its managing partner. Meanwhile Parabis chief executive Tim Oliver has warned about the entry of the big accountants.
It has now been 12 months since the formal introduction of alternative business structures (ABSs) by the Legal Services Act 2007. Prior to the reform being introduced, speculation about the effects such radical changes would have was rife. In particular, those pessimistic about the changes lamented the undermining of the legal profession via the introduction of so-called ‘Tesco Law’, combined with the ringing of the death knell for the high street firm as we currently know it.
A former fixed-share partner at south-coast law firm Lester Aldridge has lost his appeal against a ruling that he was a partner and not an employee in the limited liability partnership and so unable to claim unfair dismissal.
Is partnership an “inefficient and unattractive” structure that should be ditched to survive in the new legal marketplace, or is it a viable current model with much to offer lawyers wanting flexible governance and discretion? Both sides were put at a conference this week.
With the days of full distribution of profits to partners coming to an end, Mark Waddilove, a tax director at accountants Baker Tilly, and Jonathan Cheney, a managing associate at national law firm Addleshaw Goddard, explain how a corporate member of an LLP can mitigate the tax charges on retained profits
Partnership law expert Peter Garry outlines the significant problems solicitors are storing up by forming LLPs without a written members’ agreement. He explains that many solicitors practising within LLPs are needlessly exposing themselves to potential litigation and considerable financial loss.