The recently published Legal Services Regulation Bill has proposed some radical changes to the legal industry. 

Amongst other departures , it paves the way for the introduction of multi-disciplinary practices in the provision of legal services. This envisages a “one stop shop” practice, where clients can procure everything from their conveyancing, to tax and accountancy advice.  There is no doubt that this breaks new ground for the provision of legal services in Ireland.

The Bill also provides that a period of public consultation shall be engaged in and that the Legal Services Regulatory Authority (to be established under the legislation) prepare a report on how these Multi-Disciplinary Partnerships should be introduced.

The absence of any mention of the introduction of Limited Liability Partnerships in the new Bill is conspicuous. Both the Solicitors and the Accountancy professions have long campaigned for such a structure to be created under Irish law, to counteract the difficulties created by the joint and several liability imposed in traditional partnerships. 

Limited Liability Partnerships (“LLPs”) have been permitted in the UK since the enactment of the Limited Liability Partnerships Act 2000. This legislation provides that Limited Liability Partnerships are deemed to be a corporate body and a separate legal entity from its members. This means that the members of an LLP are not liable for the debts and obligations of the LLP unless they have specifically guaranteed them. However, unlike a company, the LLP itself is not taxed. Its members are taxed on the profits or gains of the LLP’s business.

While one might expect that the introduction of the LLP would have resulted in the lowering of professional indemnity insurance premiums for professional services firms, this would not appear to be the experience in the UK. Indeed, some observers would contend that the reduction of personal risk to the members to the LLP will result in a relaxation of a firms professional standards and attention to detail.

It has been over two years since the Company Law Review Group recommended that a inter-departmental committee be set up to examine whether the solicitors and accountancy professions should be permitted to form LLPs. Having regard to the extensive public consultation that has already occurred in relation to this, it is noteworthy that this was not specifically mentioned in the legislation. However, no doubt the formation of LLP’s will be considered by the Authority in drafting its report.

Disclaimer
This publication is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Leman Solicitors for any action taken or not taken in reliance on the information set out in this publication. Professional or legal advice should be obtained before taking or refraining from any action as a result of the contents of this publication. Any and all information is subject to change.