The Practical Lawyer

The courts now seem determined to tackle the issue of witnesses who are caught giving deliberately false testimony.

The SRA acquired important new regulatory powers on 31 March. Whilst the details are still being worked out, these powers will impact enormously on all law firms since they give the SRA powers to regulate firms (and not just individuals).

Following the arrival of LDPs, the next stage in opening up the ‘business of law’ under the Legal Services Act will be permitting private equity into law firms (in 2011 or 2012). In essence, this will allow external investment and is seen as the precursor of ‘Tesco Law’.

An LDP ‘manager’ is the new name for a partner in a partnership (or a member in an LLP, or a director in a company). Non-lawyers can be ‘managers’ provided they do not make up more than 25% of the ownership and management (ie 75% of ‘management and control’ must be in the hands of lawyers – which can include licensed conveyancers, legal executives, notaries, patent and trade mark agents, and law costs draftsmen but not (yet) barristers).

Clearly, all firms are incurring increased costs through having to comply with anti-money laundering requirements (in particular, AML Regs 2007, and POCA 2002). But, to what extent can such increased costs be passed onto clients?

One commentator has suggested that the Legal Services Act 2007 will lead to a radical reduction in the number of qualified lawyers.

We all know that partners owe a duty of good faith towards the partnership as a whole, and also to their fellow partners. But, the rules are different for LLPs.

The age discrimination legislation does not normally apply to employers who want to compulsorily retire employees at age 65 (provided the correct procedure is followed). But, that luxury is not available to partners, and a partnership trying to enforce a compulsory retirement age will have to objectively justify it on the basis that it is a ‘proportionate means of achieving a legitimate aim’.

We now have further High Court guidance on the importance of providing costs information and estimates to clients. The key point, of course, is that Solicitors Code of Conduct 2007 says ‘you must give your client the best information possible about the likely overall costs of a matter both at the outset and when appropriate as the matter progresses’. But, what does ‘best information possible’ mean?

More than 13,000 law firms practice as LLPs (indeed, only four of the top 25 firms in the UK are traditional partnerships). The motivation, of course, is to cap liability, and avoid insurance-busting professional negligence claims. But, there are still ways in which a member of an LLP can be liable.