Joining a new firm
Joining a new partnership orLLP (or being promoted to partner ofLLP member from within) is usually an exciting opportunity. It is also a point to which some people look back and think, “I wish I’d taken some good advice at the time.”
Although the terms on offer may often be presented as set in stone, there is usually scope for negotiation. It is particularly important for more junior partners/LLP members to understand the extent to which they will be able to participate in the management and profits of the firm and the extent to which they are potentially responsible for its debts and liabilities.
Although LLPs have limited liability, the degree of protection may be compromised by personal guarantees to major creditors, such as lenders and landlords.
It is also important to consider all aspects of the terms on offer in the context of the business as a whole. For example, is the reality that the equity is controlled by one or two powerful individuals who will always bein a position to call the shots, or is there a wider spread of power and influence, with greater scope for future personal development?
If you are joining at a more senior level, it is equally important to understand where you fit within the structure, the legal responsibilities you are taking on, the extent to which you are protected by the LLP/partnership terms and the rewards you can expect.
We advise partners and LLP members on joining all kinds of partnerships and LLPs, including in relation to professional and financial services.
Particular terms which we regularly provide advice on include the following:
- partnership/LLP status – equity, fixed share or salaried?
- scope for progression
- capital requirements
- drawings, remuneration and profit share
- any bonus arrangements
- voting rights and management structures
- notice periods
- garden leave
- post-termination restrictions