Limited Liability Partnership FAQs

26.09.06

On 1st October 2006 Warners will transfer its practice to a Limited Liability Partnership (“LLP”). The LLP will continue to be known as Warners. The official registered name will be Warners Law LLP.

What is an LLP?

Under the Limited Liability Partnerships Act 2000 an LLP is a corporate body with a legal personality that is separate from its members (owners) similar to a private limited liability company. It is not a partnership. It is, however, more flexible than a limited liability company in that the rights between its members are governed by agreement between them.

Why convert to an LLP?

This new form of legal entity is designed to provide a more modern business model for professional partnerships enabling them to operate in a similar way to a private limited company. Warners decided to transfer the practice to such a new business model to become more efficient operationally and to have corporate liability, rather than individuals having joint and several liability as in a partnership.

Have other law firms transferred to LLP status?

A large number of law practices now operate through the LLP model and an increasing number of law firms are either in the process of transferring to LLP or planning to do so. Future legislation in the form of the Legal Services Bill, whereby the Government seek to promote great efficiency on the part of law practices in providing services to clients, will add momentum to change. Law practices will operate not only as traditional law firm partnerships, but as limited companies, LLPs, multi-disciplinary practices (“MDPs”) and with non-lawyer owners as alternative business structures (“ABSs”).

What will change in Warners’ relationship with its clients?

Warners’ aim will continue to constantly provide the highest quality of service to all clients, whether individuals or businesses. Warners has already changed its structure and management organisation to increase efficiency and be more responsive to clients’ needs through teams of lawyers in place of the traditional large departments. This will continue in the LLP model.

Why have Warners converted to LLP status now? Is there any significance in the timing?

It made sense to consider how Warners might operate as an LLP following the legislative change in 2001. The further legislative changes that will directly and radically impact on the legal profession following a review by Sir David Clementi (The Clementi Report) and now being legislated through the Legal Services Bill also required reflection. The partners of Warners unanimously decided, after very careful consideration, that changes should be made to further improve efficiency and the provision of service to clients. Although this would have occurred with the restructuring into teams of lawyers in any event, such structural and managerial reorganisation was also entirely compatible with an LLP. The actual date of transfer to an LLP coincides with Warners’ financial year.

What level of professional indemnity insurance will the LLP carry?

Although the former partners of Warners, as members of the LLP, will not be individually or jointly liable as in a general partnership, Warners Law LLP will have the same corporate liability and that risk will be covered by professional indemnity insurance as before.

What benefit do clients derive from the change?

Although Warners has been restructured to provide even greater efficiency and response to clients’ needs (and this would have happened without LLP status) the transfer to LLP will add an additional impetus to Warners being a more modern practice. This will provide a clearer and more efficient business structure operationally.

Will you still use the term “partner”?

Since an LLP is not a traditional partnership, it was not thought appropriate to refer to the owners as “partners”. The correct term for owners of an LLP is “members”. A list of Warners Law LLP members will, as required by legislation, be available at our registered office. Warners will operate, as before, by individual talent constantly striving to exceed clients’ expectations. Clients will still deal with individual lawyers at the appropriate level of seniority for the matter on which we are instructed. With our new team structure, Warners will strive to provide even greater responsiveness to clients’ needs. One of the responsibilities of each team leader is to ensure that client care is paramount. Warners remains a “people business” and the training and development of each lawyer, however experienced, is part of Warners’ culture, as is knowing our clients and their individual requirements to tailor a high quality service to their particular needs.

What happens if you are currently acting for us?

If you have an active matter with us, you will be issued with new Terms of Engagement by the LLP. These will not have to be signed and returned as the revised wording will provide that continued instructions assume acceptance of these Terms. If we are representing you in any court proceedings at the time of conversion, we will make any necessary arrangements to formally notify the court of the change of name and status.

Will there be any visible changes to the firm?

To coincide with transferring to an LLP, Warners will be refreshing the “Warners brand” and identity, as well as launching a new website, new leaflets and other materials.

Will there be any changes to the fees you charge?

Warners’ charging structure will remain exactly the same. The usual annual review of our rates will be made with effect from 1st October 2006.

Do clients need to do anything about reappointing Warners as solicitors or in any other respect?

No, Warners will deal with all the necessary formalities.

For further information please contact:

Richard Ireland

Managing Director Warners Solicitors

Bank House, Bank Street

Tonbridge

Kent TN9 1BL