In this Ten-Minute Talk, Managing Partner Clare Murray and Partner Zulon Begum discuss LLP agreements, with a particular focus on partner remuneration.

Key takeaways from this Ten-Minute Talk:

  • The importance of ensuring the firm’s partner remuneration system, metrics and procedures are clearly documented within the LLP Agreement and any associated policies and allow for a degree of flexibility to respond to issues such as exceptional performance or partner absences and reduced working time  
     
  • Current areas of focus for firms relating to partner remuneration include (i) ensuring remuneration systems encourage high performance and incentivise transition to higher tiers (e.g., fixed share to equity), (ii) aligning partner KPIs with firm strategy and (iii) ensuring a fair, transparent and clearly documented appraisal process, including an appeal mechanism in appropriate circumstances
     
  • Key trends in partner remuneration systems and how they are developing; firms with modified lockstep systems are placing a greater degree of emphasis on rewarding individual performance

Most ambitious law firms include merger as one potential route to achieve their growth plans, whether by way of acquisition of smaller, strategically relevant firms or a ‘merger of equals’.  

Please join us during the afternoon of 29 November as we gather law firm leaders for a workshop on law firm mergers.

The event will include:
 
Key-note address on the findings of an extensive, cutting-edge PhD research project into the drivers of success across 73 large law firm mergers that took place between 2004 and 2017.
 
Fireside chat between expert merger advisers, including how to achieve a successful merger and why potential mergers fail.
 
Interactive group discussion on handling common issues which arise during the merger process, and the challenges of managing and communicating with the wider partner group.
 
Places are limited to ensure the group is small enough to generate meaningful discussion among peers.
 
Event details:
 
Date: 29 November 2023

14.00 – registration opens
14.30 – event begins
18.00 – close and networking drinks

Venue: The Bingham Room, The Honourable Society of Gray’s Inn, 8 South Square, London, WC1R 5ET
 
Please RSVP here.
 
Who should attend?

  • Managing and senior partners
  • CEOs
  • FDs/CFOs
  • Law firm board/executive committee members

Speakers:
 
Zulon Begum, Corinne Staves and Andrew Pavlovic of CM Murray LLP
Robert Millard of Cambridge Strategy Group
 
We look forward to welcoming you to this event.

In this Ten-(ish) Minute Talk, Managing Partner Clare Murray and Partner Zulon Begum discuss the key aspects of LLP agreements that professional services firms should consider updating in the current market, as well as showcasing our new online tool, CheckYourLLPAgreement.

In this video, Clare and Zulon discuss:

  • Why should firms care about their LLP agreements in the current economic market?
  • The importance of treating your LLP agreement as a living document, reviewing it regularly and ensuring it evolves in parallel with your partnership and strategy to reflect current and future business needs
  • Considerations to ensure nimble and flexible decision making, enabling your firm to respond to market opportunities or partner behavioural challenges effectively
  • How your LLP agreement can be calibrated to help manage cashflow and the impact of Basis Period Reform on firms
  • A preview of our brand new GC online tool, CheckYourLLPAgreement. The free, interactive tool will help GCs and management teams in professional services firms ensure their LLP agreement is robust, competitive, appropriate and in line with best practice

Listen to the recording of the recent Professional Practices Alliance webinar, Moving The ESG Needle For Law Firms – Deciding What Matters And What Can Be Achieved, in which our expert panel discuss how professional practices priorities are shifting regarding ESG. 

In this webinar recording, our chair Andrew Pavlovic, (CM Murray LLP), Rob Millard (Cambridge Strategy Group), Zulon Begum (CM Murray LLP) and Sarah Chilton (CM Murray LLP) discuss the following:

  • Materiality – how firms should determine their priorities when it comes to ESG, as firms move away from focussing on their own emissions and are now increasingly considering the environmental impact of their client work
     
  • Stakeholders – the importance of identifying key stakeholders and carefully considering and incorporating their interests into your ESG strategy
     
  • Client Selection – taking a nuanced approach when considering whether or not to act for clients whose ESG-related aims and values may not wholly align with that of your firm, balancing business needs, the concept of access to justice, and whether firms can use their expertise and experience to mitigate any potential negative impacts of their advice
     
  • Remuneration – the increasing shift towards incorporating elements of non-financial performance (i.e. alignment with and adherence to firms’ ESG-related policies) into partner assessment and remuneration policies
     
  • Risk Management – the risk of discrimination claims under the Equality Act 2010 where, for example, a member of staff is treated less favourably and/or harassed because of their beliefs on climate change

If you would like to discuss any of the above issues in further detail, please contact Partner, Andrew Pavlovic, who specialises in regulatory law and professional discipline matters for firms and partners.

An international merger can create a sensational headline when two prominent global law firms join forces or when two single-jurisdiction firms merge to expand their reach or safeguard their operations, such as IP firms seeking a presence in continental Europe after Brexit. Nonetheless, mergers entail more than simply a partner or team moving from one firm to another; they involve the integration of two entire businesses, or at least the majority of them.

While international law firm mergers share some similarities with mergers between two law firms based solely in the UK, there are notable distinctions and complexities that must be addressed to ensure a successful merger on an international scale.

In this article for Solicitors Journal, CM Murray Partner Corinne Staves discusses the key considerations for law firms to ensuring a successful international merger: https://www.solicitorsjournal.com/sjarticle/navigating-the-challenges-of-international-law-firm-mergers

Non-contentious partnership law specialist Zulon Begum, Partner at CM Murray LLP, recently joined Robert Bata, Founder and Principal of WarwickPlace Legal, LLC and Murray Coffey, Founder of M Coffey LLC, for their podcast GMT: The Podcast For Globally Minded Law Firm Leaders, to discuss law firm mergers, international expansion and provide an overview of recent market trends.

In this podcast episode, Zulon, Robert and Murray discuss:

  • A&O and Shearman & Stirling: what impact will this game changing merger have on the legal market?
     
  • The importance of controlling communications and the narrative around a merger
     
  • Law firm global expansion and the challenges and opportunities for international firms
     
  • Whether independent national law firms will need to re-think their strategy in an increasingly consolidated global legal services market
     
  • Analysis of recent global market trends, including India’s opening up to foreign law firms 

If you are a partnership or LLP and are considering a merger and would like to find out about how we can support you through the process, or if you have any other questions arising from this podcast, please contact non-contentious partnership law specialist, Zulon Begum.

Listen to the latest episode of ReguLaw, featuring guest speaker David Hopkins of 39 Essex Chambers.

In this episode Andrew Pavlovic, Naomi Latham and David discuss the SRA’s changing approach to sanctions and financial penalties, including:

👉 The recent increase in the SRA’s internal fining powers, with a discussion as to how those powers have been exercised to date

👉 The rare circumstances where the SRA will hold a hearing before an adjudication panel, what type of cases might be appropriate for such hearings and how often we would expect this to occur in practice

👉 The SRA’s extension of turnover based fines for firms and the introduction of means based fines for individuals

👉 Notable cases involving the fining of individuals for sexual misconduct and instances where the SRA have sought permission to address the Tribunal on sanctions

👉 The recent case of Barnes, its application to sanctions in Hutchings, and whether this case will have an impact on financial sanctions/costs orders in the Tribunal going forwards

Listen using the link above or wherever you get your podcasts.

Some years ago, I was invited by one of the leading Danish law firms to their annual partners conference. We spent a great day together, exploring how the practice and business of law is evolving and how that might impact their firm. Afterwards, the driver of the car taking me from Aarhus back to the airport pointed to a nondescript hill some distance from the road. “That,” he said, “is Ejer Baunehøj, the highest point in Denmark.” 

He was wrong, so I discovered. In 2005, a panel of experts had determined that highest point in Denmark to be Møllehøj (Mill Top), 200m away from Ejer Baunehøj. It is a whopping 51cm higher. Not only that, but the panel knocked Ejer Baunehøj down to third place, with Rodebuske in Yding Skov, 9cm lower than Møllehøj, sliding into second highest point in the land. Yding Skovhøj, a few kilometres away, would have beaten them all had it not been decided in 1953 that a bronze age burial mound on its summit didn’t count.

Møllehøj stands at just under 171m above sea level. Denmark has no [material] mountains.

Imagine (very hypothetically) that requirements emerge for states to have special ecological plans for their mountains. Would it make sense for Denmark to develop the same kinds of plans as, say, Austria or Switzerland? Would it be ethical to for Denmark to proudly report its success in implementing these plans? Clearly not. Doing so might even be called “peak-washing” – especially if Denmark did things to harm montane ecologies elsewhere but chose to ignore those.

My craggy metaphor fits well with efforts by some law firms to signal high”ESG” standards to the market by targeting their own (largely immaterial) greenhouse gas (GHG) emissions, while wilfully ignoring the (material) advice they render to clients, that harms efforts to limit global temperature rise to 1.5 degrees Celsius about pre-industrial levels. This approach is about as sensible as it would be for asset managers to manage their own GHG emissions while ignoring those of the assets in their portfolios. (Which is precisely the opposite approach to that which this industry is adopting.)

IPCC scientists and other experts say that climate change and its associated sea level rise pose existential threats to humanity that are unprecedented in 10,000 years of civilisation. The same applies in different ways to biodiversity loss, pollution, and freshwater scarcity. If this is true then wilful ignorance of the effects of one’s advice constitutes malpractice, in my opinion.

Materiality is crucial in developing strategies to deal with these challenges. Of course law firms occupy offices that consume energy. Lawyers tend to fly a lot, which uses fossil fuels and releases greenhouse gases (GHGs). Resources are consumed in manufacturing the paper, furniture, computers and all the other goods that firms use and in their disposal afterwards. Many still use single use plastics. Reducing these make for impressive bar charts, but how material is this in the greater scheme of things?

Materiality is a multi-layered pyramid:

Legal and other requirements. This layer is in two parts. The former is obvious. The latter includes other requirements to which the firm agrees to be bound, for instance in contracts of through charters of organisations of which it is a member. This forms the base of that pyramid.

Strategic alignment. Requirements imposed by the firm’s strategy, including the mix of services, markets and clients upon which it seeks to focus on growing.

Stakeholder expectations. Most modern sustainability and similar standards require that organisations consider views of their stakeholders when determining whether or not something is material, in developing policies, in setting objectives, and in making important decisions about how to achieve these. In cases where stakeholders (such as clients or employees) believe something to be material, then that stakeholder belief can, of itself, make that thing material.

Altruism choices. Investments that the firm makes that are not specifically required by the lower layers, but which it chooses to simply because it is “the right thing to do.”

My client advice is almost always the source of a firm’s most material impacts. Law firms have considerable agency in deciding which clients they will advise, the services they will render to those clients, and the substance of the advice that they deliver. Most clients are on their own sustainability journeys, feeling their way more often than not through what is also for them a dramatic paradigm shift. Law firms can (and very arguably should) play a crucial role in helping them achieve their own climate change objectives and reduce their own GHG emissions. And to hold clients’ feet to the fire, so to speak, when their actions might increase GHG emissions or otherwise worsen the climate crisis.

The Law Society of England & Wales tackles this thorny issue head-on with their recently-published Guidance on the Impact of Climate Change on Solicitors.

We at the Professional Practice Alliance will too, at our webinar on Tuesday. Should you wish to attend the webinar, you can register (for free) here.

The photo of Møllehøj (which is just behind the farm building) is by J. Miall, published on Wikipedia under Creative Commons. 

In professional services firms we are now beginning to see an increased focus on “advised emissions”. The Law Society of England Wales has recently published guidance on the impact of climate change on solicitors, in which, among other things, it asks solicitors to consider the climate impact of their client work and climate related issues/risks when deciding whether or not to act for particular clients.

In addition to environmental considerations, many professional services firms are considering more generally how they can realistically entrench ESG into their own business, people and client strategies.

Join our panel of experts at the next Professional Practices Alliance webinar, ‘Moving the ESG needle for law firms: deciding what matters and what can be achieved’, taking place on Tuesday 18 July. In this session, we will consider:·        Materiality – What is important and hence needs to be managed, and what is not (hence can lead to accusations of ‘greenwashing’?)
 ·        Stakeholders – How do firms decide who their stakeholders are when determining their policies and approaches to ESG?
 ·        Client acceptance – To what extent should ESG be a factor when considering whether to accept instructions?  How much ESG due diligence should firms be doing on prospective clients?
 ·        Governance – Can firms instil culture/good practice through effective governance?  What can be done if partners/employees make statements or act in a way which challenges that culture?
 ·        Regulation – Should regulators be providing rules or guidance as to when it is or it isn’t appropriate for firms to act for certain clients?Date: Tuesday 18 July
Time: 9am – 10am BST

Webinar Chair:
Andrew Pavlovic, Partner, CM Murray LLP – Professional Discipline and Regulatory Specialist

Speakers:
Robert Millard, Director, Cambridge Strategy Group – Law Firm Strategy and Sustainability Advisor 
Zulon Begum, Partner and Head of Non-Contentious Partnership Practice, CM Murray LLP
Sarah Chilton, Senior Partner, CM Murray LLP – Partnership and Employment law Specialist
 Register your place here.

Should you have any questions that you would like to be put to the speakers, please email Andrew Pavlovic.
 Is Your Firm prepared for the Financial Year Ahead?
Key Trends and Challenges for Professional Services Firms in 2023/24We are also delighted to share with you the recording of our recent webinar, ‘Is Your Firm prepared for the Financial Year Ahead? Key Trends and Challenges for Professional Services Firms in 2023/24’, in which our expert panel discuss the financial year ahead for professional services firms. Listen to the recording here and see below for further details. In this webinar, you can hear from Chair, Corinne Staves (CM Murray LLP), and speakers Robert Millard (Cambridge Strategy Group), David Shufflebotham (Pep Up Consulting) and Andrew Pavlovic (CM Murray LLP) as they discuss the following issues to include in professional service firms ‘to do’ list for the next financial year: ·        How to remain profitable and effectively manage the firm’s cash flow at a time of stalled economic growth, inflation, cost of living crisis and basis period reform.
 ·        Implementing a strategy and the importance of having a Plan B strategy, especially during a time where firms are adapting to deliver client services in a new technological era.
 ·        How to maintain and enhance a firm’s culture and productivity in a hybrid working environment, including the impact that long-term hybrid working may have had on a firms culture.
 ·        Key regulatory developments and the practicalities surrounding how to approach them, specifically the new SRA regulations to address toxic work environments by actively challenging behaviours in the workplace.
 ·        Whether ChatGPT could spell the end of lawyers or whether it can be harnessed to improve service delivery and profitability of firms.
 ·        The potential regulatory issues that arise from using new technology (such as Chat GPT) to assist with delivering client services.
 ·        The increasing need for professional service firms to address environmental issues.Listen to the recording here

If you would like to discuss any of the above issues in further detail, please contact Partner, Corinne Staves, who specialises in partnership issues for firms and partners. SAVE THE DATESWe have an exciting program of webinars planned for the next few months:

19 September 2023: ‘Judgment Day: the adoption of AI and machine learning by professional firms, and the associated risks, opportunities and challenges for firms’

29 November 2023: ‘Professional Firm Mergers’The Professional Practices Alliance is a multi-disciplinary collaboration between leading UK independent legal, accounting and law firm management specialist advisers, CM Murray LLP, Pep Up Consulting and Cambridge Strategy Group.

We are delighted to share with you the recording of the recent Professional Practices Alliance webinar, ‘Show me the Money! Shaping a Dynamic and Flexible Profit Sharing System to Smooth the Bumpy Road of Succession‘, in which our expert panel discuss profit sharing systems.

In this webinar, you can hear from guest speaker Jonathan Blair (Womble Bond Dickinson), chair Zulon Begum, (CM Murray LLP), and PPA speakers David Shufflebotham (Pep Up Consulting), and Sarah Chilton (CM Murray LLP) as they discuss the following:  

  • A refresher on the different types of profit sharing systems used by firms and how to deploy them, focussing on fixed share, variable share, managed lock step, and managed merit systems 
  • An assessment of the impact that each profit sharing system can have on partner behaviours, specifically assessing the impact that they have on collaboration, apportionment of risk, and investment
  • Structuring a firm to motivate, encourage, reward and incentivise partners not only financially but through peer recognition and career progression
  • The succession of the partnership, including elegant exits, smooth retirements and the importance of structuring a firm to appeal to the next generation of partners

If you would like to discuss any of the above issues in further detail, please contact Partner, Zulon Begum, who specialises in partnership law for firms and partners.