Robert Postlethwaite looks at alternatives to traditional partnership & LLP ownership
For most law firms, the traditional partnership (or LLP) continues to be the ownership structure of choice, rewards of ownership being confined to a select group of lawyers who demonstrate stellar client service, outstanding ability to generate new business, effective team management, or sometimes more than one of the above.
Best model?
Is this the best model for all firms? We all know that a sea change is taking place in how legal services are delivered in the UK. ABS registrations are growing steadily; new equity-backed entrants are coming into the market; competition is intensifying and growing in sophistication. Thinly-capitalised law firms will be vulnerable to those which have equity backers willing to invest for the longer term. As if that wasn’t enough, tax changes are bringing to an end the self-employed status of many fixed share or salaried partners.
Any law firm weighing these threats might usefully consider whether a shift towards wider ownership and longer-term reward should form part of their response.
Most firms have talented lawyers who are not
