Partners

by Laurie Anstis on February 26, 2013

It used to be so simple.

Law firms were partnerships. Most of the solicitors who worked in the firm were partners in the firm. They owned the firm and managed it, as well as doing legal work for their clients. Decisions were made by consensus. Each partner had the power to agree to contracts on behalf of all the others. All for one and one for all.

Every solicitor would have as his or her goal and expectation that one day, before too long, they would be a partner in their firm.

Of course, it was never really like that. Some partners have always been more equal than others, and even in the old days sophisticated partnership deeds could give enormous flexibility in the way that individual firms managed their partnerships and shared profits and losses.

But what are we to make of the modern world? The traditional law firm partnership is becoming a thing of the past. Most larger firms are now LLPs or incorporated practices.

The problem is that neither LLPs or incorporated practices actually have “partners”. LLPs have members, and incorporated practices have shareholders and directors.

That’s not stopped the use of the term “partner” though. Incorporated practices still have partners, although what exactly that means is anyone’s guess.

In the case of LLPs the position used to be simpler. Those who were partners became members in the LLP, but retained the old designation of partner, because members were the nearest equivalent to partners in an old-style partnership.

But it’s not even clear in LLPs any more. Take this, for example, from a respected City LLP:

“we use the word ‘partner’ to refer to a member of the LLP, or an employee or consultant with equivalent standing and qualifications”

So as with incorporated practices, the title means whatever it suits the LLP for it to mean.

In the commercial world, the designation “director” has long since lost its connection with actually being a member of the formal board of directors. In the legal world, “partner” is well on the way to becoming just as flexible a concept.

One comment

We also now have “directors” in our llp Lawfirm. They are not quite partners but are expected to sell like a partner.

They have no legal obligations as per the llp members.

A very odd arrangement.

by Someone further down the food chain! on 26 February 2013 at 8:19 pm. #