Brief summaries of changes to Dutch and Caymans limited partnership law

Law firm Jones Day has published a short summary of recent changes to Dutch limited partnership law, principally that tax transparency will now be automatic. 'Dutch Limited Partnerships Attractive Alternative to Luxembourg and Irish Fund Structuring' is available at: https://www.jonesday.com/en/insights/2021/05/dutch-limited-partnerships-attractive-alternative-to-luxembourg-and-irish--fund-structuring

Law firm Ogiers has published a short discussion of 2020 changes to limited partnerships in the Cayman Islands. 'Private equity and Cayman Islands funds: tips, trends and pitfalls for limited partners' is available at: https://www.ogier.com/publications/private-equity-and-cayman-islands-funds-tips-trends-and-pitfalls-for-limited-partners

Practitioner articles on i) compulsory retirement, ii) demergers, and iii) partnership property

Law firm CM Murray has recently published short articles on

i) issues arising from the recent judgment in Joseph v Deloitte in relation to compulsory retirement provisions in LLP agreements - available at: https://www.cm-murray.com/knowledge/is-it-time-to-spring-clean-your-partnership-or-llp-agreement-following-the-court-of-appeal-judgment-in-joseph-v-deloitte/?utm_source=rss&utm_medium=rss&utm_campaign=is-it-time-to-spring-clean-your-partnership-or-llp-agreement-following-the-court-of-appeal-judgment-in-joseph-v-deloitte

ii) partnership/LLP demergers - available at: https://www.cm-murray.com/knowledge/partnership-and-llp-demergers-steps-to-avoid-derailing-a-spin-off/?utm_source=rss&utm_medium=rss&utm_campaign=partnership-and-llp-demergers-steps-to-avoid-derailing-a-spin-off

Law firm Birketts has published a brief article on some of the problematic issues arising in relation to partnership property in the context of an English, Welsh or Northern Irish general or limited partnership. It is available at: https://www.birketts.co.uk/insights/legal-updates/partnership-property-disputes-when-things-go-wrong

Call for Papers - 4th Annual Conference of the Partnership, LLP and LLC Law Forum

9 September 2021
Nottingham Trent University, UK

Call for Papers

The Partnership, LLP and LLC Law Forum is pleased to host its 4th Annual Conference in conjunction with the Centre for Business and Insolvency Law at Nottingham Law School. The Conference aims to bring together all those with an interest in partnerships, LLPs, LLCs and other alternative forms of business organisation in the UK and overseas.

The following speakers have provisionally confirmed:
· Professor Geoffrey Morse (University of Birmingham)
· Roderick I’Anson Banks (Partnership Counsel, 9 King’s Bench Walk)
· Jeremy Callman (Ten Old Square, Lincoln’s Inn)

Proposals are invited for further papers on any aspect of partnership, LLP and LLC law and practice, in the UK or overseas. The usual format is a 20 minute presentation accompanied by slides or a handout, followed by an opportunity for questions. However, proposals for panel discussions or other formats as welcome, as are proposals for joint papers.

Proposals should specify the i) names of the speaker(s), ii) their firm/university/other institutional affiliation, iii) their contact details including email address, and iv) the topic area(s). If the proposal is accepted, we will ask you for a title. Shortly before the conference, we will also require an abstract/summary of the paper, and any accompanying slides/handout. You do not need to supply a full copy of the paper.

It is intended that the Conference will be an in-person event, but if Covid-related restrictions make this impractical, it will be moved online as occurred in 2020. Proposals should specify whether the speaker would be prepared to present online if necessary, or only in person.

Proposals should be emailed with the subject line ‘Partnership Conference 2021 – call for papers’ to Dr Beatriz Gómez Fariñas at beatriz.gomezfarinas@ntu.ac.uk no later than 23 April 2021. Anyone wishing to make an informal inquiry ahead of submission of their proposal is welcome to do so.

We aim to confirm acceptance of papers by 14 May 2021. Conference registration will open in June and all speakers will need to register.

We look forward to receiving your proposals, and meeting you at the Conference.

Book Review: Regulation, Compliance and Ethics in Law Firms

Regulation, Compliance and Ethics in Law Firms, Tracey Calvert (2nd edn, Globe Law and Business 2020), 249pp., paperback, ISBN: 9781787423787. Also available as an e-book (see further www.globelawandbusiness.com).

This book considers regulatory compliance for law firms, although the short chapter on data protection is of more general relevance. The author is a lawyer and the director of a firm which provides regulatory compliance consultancy services to lawyers.

The content of this book is interesting and useful, but the structure is sometimes a little difficult to follow. There are discrete chapters on the Legal Ombudsman, anti-money laundering rules and remote working, all discussed with reference to the Solicitors Regulation Authority (SRA) Rules, but the division of material between the other chapters is sometimes confusing and the chapter titles are not always helpful. The book is divided into four sections; Governance and risk management, Demonstrating regulatory compliance in practice, Compliance with legal obligations, and Compliance tools and resources, but there is a degree of overlap between these sections and between the chapters within them, and it is not always clear where particular material is to be found and whether all the material on a specific issue is in one place or divided between chapters.

The section on ‘Governance and risk management’ consists of a single chapter on ‘Effective law firm management’ which itself accounts for a quarter of the book and would have benefited from a more obvious structure. The subheadings are not listed in the Contents, and it is not always clear how the different subheadings relate to each other or how the chapter is developing. Nonetheless, it contains much useful content. It
discusses the SRA Rules in detail and includes extracts from the Rules, as well as some short case studies and practical insights from senior law firm managers. It also considers compliance officers and supervision. Tables and bullet point lists are used to highlight important questions or issues that firms need to consider, and the tables in particular provide explanations of the importance of these questions or issues, and the results which firms should seek to achieve when addressing them.

The section on ‘Demonstrating regulatory compliance in practice’ includes what at first sight is a surprisingly short chapter (2½ pages) on ‘What is ethics’, but this is supplemented by a further discussion of ethics in the chapter on ‘Adding the people and commercial perspective’. The chapter on ‘Essential behaviour’ covers the SRA Principles, Codes of Conduct, and Statement of Solicitor Competence and, like the first chapter, includes extracts from many of these, a case study, and several checklists of questions for firms to consider. The chapter on ‘Evidence of compliance’ focuses on relevant policies which a firm could adopt. The chapter on ‘Safe client inception processes’ considers compliance issues arising when opening a new client file, and the need to monitor the relationship. The chapters on ‘Compliance in the litigation arena’, and ‘The Legal Ombudsman’ do essentially what they say on the tin.

The section on ‘Compliance with legal obligations’ includes chapters on ‘Managing the money laundering risk’, and ‘Managing the risks of handling data’ which again do what their titles suggest, and a chapter providing ‘An overview of legal compliance’. This provides a very brief outline of some of the most relevant legislation, including legislation relating to lawyers such as the Solicitors Act 1974, and more generally applicable legislation such as the Financial Services and Markets Act 2000 and the legislation governing data protection.

The section on ‘Compliance tools and resources’ includes, as might be expected, a chapter on ‘Resources’, but also chapters on chapters on ‘Be aware of recent changes’, ‘Remote working - compliance considerations’, and a ‘Conclusion’ to the book as a whole.

In summary, there are many useful nuggets of information and advice here for members of law firms and in particular managers, but some digging is required.

Book Review: Partner Retirement in Law Firms

Partner Retirement in Law Firms, Ronnie Fox (ed) (Globe Law and Business 2020), 136pp., paperback, ISBN: 9781787423428. Also available as an e-book.

This book considers a variety of practical issues to be considered when planning retirement. Although it is aimed at law firms, most of the issues covered would arise in other professional firms, many issues would arise in any partnership or LLP, and some would arise even more widely (particularly financial planning for retirement and the emotional impact of retirement). It is part of the Law Firm Management series, further titles in which can be found at https://www.globelawandbusiness.com/subjects/law-firm-management.

The authors are all senior practitioners in their areas, and this wealth of experience and expertise is evident in the breadth of coverage in the book, and the careful and authoritative suggestions made for dealing with the various potential difficulties identified. One of the unique features of the book is that it brings together professional advice on many different aspects of retirement – not just legal and financial but also emotional, and not just viewing it as the end of something but as the start of something else, whether that is a new career or a well-funded and rewarding retirement.

The book is divided into seven chapters. These cover the legal issues from the firm’s perspective and that of the retiring partner, accounting issues, tax, financial planning, the emotional impact of retirement, and the possibility of starting a different career.

All of the chapters are well and clearly written. They use frequent and helpful headings and subheadings (I particularly liked the division of part of one of the legal chapters into ‘key’ and ‘less common’ provisions). They also use bullet points, bold and coloured text, and some boxed text, which make it easy to read and ensures that key points are clear. It is also noteworthy that the font size is large – this is a feature of the series, but it did occur to me that it was appropriate given the target audience (and I speak as one who now needs multiple pairs of glasses for different tasks!). Readers may differ in their views on the amount of ‘white space’ on each page, but it would certainly be useful when adding personal annotations or highlighting.

The editor’s preface explains that the books is designed to be read from beginning to end and therefore cross references are unnecessary, but realistically many readers would also use this book to ‘dip into’ for reference, and cross references would have been useful, particularly given the overlap in subject matter between the two legal chapters, between the accounting, tax and financial planning chapters, and between the chapters on emotional impact, financial planning and other career options. Cross references, and index or a glossary would also have been useful in relation to particular concepts or terms which appear in several chapters (for example, anti-embarrassment clauses) or at different points of a chapter (for example, waiting room clauses).

The preface also notes that the book does not contain all the answers but will prompt the reader to ask important questions and seek relevant advice. However, the breadth of the book is impressive, and although it does not purport to provide depth, the authors’ expertise enables their concise advice to include a remarkable quantity of sound, practical suggestions.

In summary, this is a valuable source of authoritative information presented in an accessible format, not just for law firm partners but for all partners (and indeed anyone contemplating retirement). It will also provide students with useful tips on drafting relevant clauses of LLP or partnership agreements.

New journal on the future of the legal profession

Globe Law and Business has re-launched the journal Modern Lawyer (previously Modern Legal Practice). It publishes short articles from practitioners about the future of the legal profession, and the first issue covers diversity in the profession, retirement, and the role of in-house lawyers. Subscription details are at https://pages.globelawandbusiness.com/modern-lawyer.

Partner Contribution – The Ramifications of External Investment on Traditional Partner Reward Structures

UK law firm CM Murray have made available a recording of their recent panel discussion on ‘Partner Contribution – The Ramifications of External Investment on Traditional Partner Reward Structures’. It is available at:
https://www.cm-murray.com/knowledge/partner-contribution-the-ramifications-of-external-investment-on-traditional-partner-reward-structures/#page=1

New article on the use of UK partnerships for criminal purposes

Elspeth Berry, ‘Partnership Law: Used, Misused or Abused?’ (2021) 32(2) European Business Law Review 207-250

This article analyses the increasing use of UK partnerships for criminal purposes, often in other jurisdictions, and argues that the regulatory responses are inadequate, and must be supplemented by a comprehensive ethical framework.

It first argues that partnerships offer substantial benefits for a variety of businesses, but that they also have vulnerabilities which have led to their misuse and even abuse through criminal activities. It then analyses the deficiencies of the regulatory measures designed to tackle the abuses, including requirements to disclose participant identity and accounts, and anti-money laundering and tax evasion measures. Finally, it evaluates the use of a supplementary ethical framework to reduce the abuses, and examines how such a framework could be created. The analysis provides an understanding of the causes and consequences of partnership abuses and of how they can be overcome. 

If you do not have access to the European Business Law Review and would like to read the article, please contact the author at elspeth.berry@ntu.ac.uk.

Book Review: Capitalism before Corporations

Capitalism before Corporations, Andreas Televantos (OUP 2020), 224pp., hardback, ISBN: 9780198870340. Also available as an e-book.

This book considers the ways in which English organisational law facilitated commerce before incorporation became common. It focuses on the period 1790-1822 and is part of the Oxford Legal History series. In particular, it considers the extent to which partnership, trust and agency law developed to reflect the demands of traders and the need to protect third parties and society from the adverse effects of the behaviour of traders.

The book is divided into three broad thematic parts. The first part introduces and analyses partnership and trust structures and their use in the Regency period. Chapter 1 considers the definition of a partnership, and the ease with which a partnership could be dissolved, both of which issues continue to give rise to disputes today. It also considers the use of partnership assets and the ‘jingle rule’ whereby partnership assets are available to partnership creditors in priority to partners’ personal creditors. Although the title of Chapter 2 refers only to trusts, it includes a substantial section on joint stock companies (though labelled ‘The Deed of Settlement Company’) which the author describes as ‘unincorporated partnerships which made use of trusts to emulate some of the benefits of incorporation’, and this section examines the joint antecedents of both modern partnerships and modern companies.

The second part explains the authority of agents and trustees in relation to business assets. Chapter 3 discusses some of the economic theories and economic history underlying the development of agency law generally, and partners as agents in particular. It includes a discussion of the scope of partners’ agency, and the availability of set-off as between principal and third party, including where the principal is undisclosed. Chapter 4 considers in more detail the attitude of the courts to the development of agency law. Chapter 5, though focusing on trustees and executors, draws some interesting parallels between the rights of partnership creditors and those of trust creditors.

The third part discusses business failure and the distribution of risk. Chapter 6 focuses on trusts, but Chapter 7 considers the rules governing the distribution of a bankrupt partnership’s assets. It examines the development of the jingle rule, the priority of third-party creditors over partners in the distribution of partnership assets, the requirement for partners to return assets removed by them from an insolvent partnership, and the rights of creditors against the partners jointly rather than the partnership. Although the chapter title refers to dissolution and bankruptcy, and the early material focusses on bankruptcy, there is also an extensive discussion of the liability issues which arise when a partner leaves a continuing partnership, for both the departing and the continuing partners. While this situation is of course one of partnership dissolution, it is commonly regarded as a ‘partial’ or ‘technical’ dissolution, and very different to the complete dissolution which will occur on bankruptcy.

The substantive material finishes with a concluding chapter, although several of the other chapters also include a concluding section. The book includes an Appendix explaining the use of archival sources, and providing a glossary of terms and an extensive bibliography. There are ample footnotes throughout the chapters, directing the reader to important primary and secondary sources.

The rationale for the division of material between chapters is sometimes a little unclear, and both the chapters and the sections within them are sometimes given titles which do not fully reflect their content, with the result that this is a book to read as a narrative rather than a reference work.

However, it is a thought-provoking text which will be of interest to academics and postgraduate students in partnership law, the law of trusts, or the history of commercial and company law in England.

Save the date - 4th Annual Conference - Thursday 9th September 2021 in Nottingham

In conjunction with the Centre for Business and Insolvency Law at Nottingham Law School, the Partnership, LLP and LLC Law Forum is pleased to host its 4th Annual Conference.

The Conference will be held on Thursday 9 September 2021 at Nottingham Trent University (assuming Covid-19 restrictions allow for this - otherwise it will be online as in 2020).

As ever, the Conference aims to bring together all those with an interest in partnerships, LLPs, LLCs and other alternative forms of business organisation in the UK and overseas - including practitioners, academics and policymakers - and to provide a welcoming and inclusive forum in which to share and develop ideas.

A formal Call for Papers will be issued shortly.

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