Partnership Agreements for Law Firms

Nicholas Wright is chief executive of Wright Son & Pepper LLP, which has been in Gray's Inn, London for approximately 200 years. The firm's main areas of expertise are in commercial, private client, partnership and regulation law. Nicholas has specialised in partnership and professional regulation for over 20 years and has been a member of the Solicitors' Assistance Scheme for most of that time. He has acted as receiver and assisted firms in professional difficulty in an orderly winding up of their activities at the request of the Law Society. He has acted for a number of substantial firms in dealing with regulatory issues, as well as dealing with drafting, restructuring issues and disputes, both for firms and for individual partners. Nicholas is, with Victoria Wright, the editor of that part of Cordery on Legal Services (Butterworths, 1995) which deals with practice structures. He is also the author of the first edition of Partnership Agreements for Law Firms (January 2008) and LLP Conversion for Law Firms(April 2010), published by the Ark Group.

Part One: Tackling the Current Issues in Partnership Agreements Chapter 1: Partnerships, LLPs and limited companies...1 Chapter 2: Alternative Business Structures - Outside participation in legal firms...5 Chapter 3: Attracting new partners - LLPs and partnership...11 Chapter 4: How is the partnership managed?...13 Chapter 5: Salaried and junior equity partners...17 Chapter 6: Discrimination in partnerships...19 Resolving the issues in the partnership agreement...21 Chapter 7: Profit sharing...25 The equality system...25 Profit share by capital contribution...26 Seniority (lockstep)...26 Merit or performance systems...27 Hybrid profit-sharing systems...29 Variables in merit-based systems...30 Capital-based hybrid systems...31 Retirement annuities...32 Retaining profits...32 Chapter 8: Different categories of partner and new partners...35 Chapter 9: Additional benefits and provision ...39 The kinds of benefits...40 Flexible working arrangements...41 Contents I V Chapter 10: Supervision and disciplinary provisions...43 Partners' obligations...45 Compliance with regulatory obligations...46 Disciplinary measures...47 Performance measurement...47 Chapter 11: De-equitisation...49 Provisions for expulsion from the partnership...50 Chapter 12: Expulsion, retirement and dissolution...53 Expulsion...53 Suspension...55 Challenges to expulsion...56 Retirement...57 Accounting...58 Distribution of shares...59 Anti-embarrassment clauses...60 Restriction of competition...60 Indemnities...61 Dissolution...62 Chapter 13: Good faith, arbitration and mediation...65 The duty of good faith...66 Preventing litigation...68 Indemnity and compensation...69 Arbitration...70 Mediation...71 Part Two: Case studies Preface to Case Studies...75 Case study 1: A defective business plan...77 Case study 2: Failure to draft for change...79 Case study 3: Failure to implement partnership clauses...81 Case study 4: Failure to notify insurers of claims and circumstances...85 Appendix 1: A deed of partnership...87 Index...111