Whether you are considering leaving or joining a general partnership, limited partnership or LLP it is crucial that you seek advice early about the terms of the partnership or members’ agreement.
Partnership and members’ agreements are not one size fits all and most partnerships have lengthy bespoke agreements. The temptation is to shy away from reading the small print and focus on the remuneration but it can often be the other terms of the agreement which can cause most problems. Do you really know what you are signing up to?
There are various types of partner, including fixed share, salaried and full equity partners each with differing entitlements and responsibilities. Becoming a partner may mean that you are no longer an employee and your rights and obligations may change substantially. Following recent case-law some partners may now also enjoy “worker” status with the added benefit of a bundle of other valuable rights and protections, for example, relating to pension and holiday so we recommend taking advice early to ensure you are being treated fairly and lawfully.
Fox & Partners can help you to understand fully your status, rights, obligations and the terms of the partnership or members’ agreement so that you know how your relationship will operate whilst you remain a partner at the firm and also what will happen if you leave.
Once you have handed in your notice to leave or signed up to a new agreement it will be extremely unlikely that you will be able to negotiate changes. Therefore it is crucial that you take advice early before taking these steps.
Before deciding to leave a partnership Fox & Partners can work with you to consider:
- the mechanisms for your exit. Can these be shortened?
- what payments you are entitled to receive on exit
- could you be subject to a period of garden leave? How will this impact your profit share and other entitlements?
- what will happen to your relationships with existing and prospective clients, customers, suppliers and staff?
- are there any restrictions on your next role? Are these enforceable?
- what are your on-going responsibilities and liabilities after you have left?
- what arguments can you raise to increase your exit package or minimise any ongoing restrictions?
- what is the best strategy to achieve your objectives?
Similarly before deciding to leave one firm for another you should be comfortable that you understand the terms of the new partnership or members’ agreement and that you have the freedom to fulfil your aims.
Some of the key considerations are:
- profit-sharing structure
- financial management
- retirement and expulsion provisions
- exposure to liabilities
- post-termination restrictions
- notice periods
Fox & Partners provides fast, cost-effective and commercial advice to guide you along the partnership process and help you to decide if the offer on the table will satisfy your objectives.
How Fox & Partners can help…
- we can provide you with a list of questions for you to ask the firm before you join
- we can carry out a review of the partnership or members’ agreement and provide a report on the key aspects
- we can provide a tailored strategy to achieve your objectives, whether these are to leave your existing firm and join another or to negotiate changes to an offer of partnership.
Please call us on 020 7618 2400