Accountancy firms set up as partnerships need to consider retirement when writing partnership agreements to avoid potential disputes in light of Parr case, explain Lydia Danon, partner and Andrew Flynn, associate at Cooke, Young & Keidan LLP
It is now common for limited liability partnerships (LLP) and partnership agreements to include a compulsory retirement age for partners/members of a firm. Some partners, particularly those with busy practices, are simply not ready to pack up their desks and head to the putting green or beach.
Many choose, and are able, to negotiate with their former partners a part-time role or ‘less invested’ presence at their firm, having dedicated (in many cases) their entire working lives to it. Partners tend to be de-equitised and then take on a consulting or salaried partner role.
The recent case of Parr v MSR Partners LLP (formerly Moore Stephens LLP) is a cautionary tale about the important decisions and choices an existing equity partner should consider and make should that time come.
