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LONDON-From today British lawyers will be able to limit their liability while retaining a partnership structure. Until now partners in law firms have been ‘jointly and severally liable’ which means that each partner is personally liable, down to his or her household possessions, for the mistakes of another partner.

The trend to limit liability among professional practices began with the big accountancy practices that lobbied the government for a change of status in the 1990′s, after their audit arms were hit for huge negligence claims. The audit function makes accountancy firms particularly vulnerable to large claims.

And for over a decade now chartered surveyors have been able to limit their liability by incorporating their firms into limited companies. Most, but not all, of the big agencies have taken this step.

The new LLP status means that partners will only be liable for their own negligence. But it also involves an obligation to publish accounts, something that no partnership has previously had to do. Kathleen Stewart, a partner at the Scottish firm Semple Fraser, said this could be a step too far for some. ‘LLPs will have to disclose turnover and profit share of the highest paid member of the partnership. This will deter some firms from changing their status,’ she said.

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