Top tips on LLP restrictive covenants: drafting and disputes

Partners in accountancy firms structured as limited liability partnerships (LLPs) frequently seek to bind one another with restrictive covenants to protect the business if a partner leaves. Clare Murray, managing partner and Zeinab Harb, trainee solicitor at employment law firm CM Murray LLP ask whether these legal agreements are always worth the paper they are written on

It is little surprise that one of the most common disputes between an LLP and its members is in relation to post-termination restrictive covenants. These are seen as crucial in protecting, for example, the LLP’s confidential information, client and trade connections, workforce stability and goodwill.

Naturally, these covenants really come into sharp focus when an LLP member seeks to exit to join a competing firm, and this is when attention quickly turns to the drafting and enforceability of restrictions.

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