It is 14 years since the Limited Liability Partnerships Act demonstrated the formidable lobbying clout of the global accountancy giants – what were then the ‘Big Five’ (Arthur Andersen RIP). Perhaps that clout has diminished a little.
For last week George Osborne confirmed in his budget he will press ahead with controversial changes to LLP member tax rules.
The Law Society is among those to have complained that there is no evidence these changes will generate substantial revenue – nor has any explanation been given regarding why it is acceptable to place UK LLPs at a disadvantage.
LLP numbers have been creeping up in the law and now comprise some 1,593 firms, 15.1% of the total. The measures are already having an impact on some, for example requiring them to raise capital from members.
Some suggest the changes could encourage businesses to choose limited company rather than partnership status. But the reality is the advantages of LLP status are unlikely to diminish the vehicle’s appeal for those practices which already use it.
Remuneration processes and capital-raising will be subject to review, but do not expect a sudden ‘back to the future’ surge in law firm structures. The profession has moved on.