One of the downsides of limited liability partnership (LLP) conversion which was not mentioned in the article 'LLPs point the way' (see [2007] Gazette, 30 August, 18) is the internal opportunity cost of having to devote a significant amount of management time to the numerous administrative tasks associated with conversion. For larger firms, much of this burden is likely to fall on the practice's risk management function.


The danger is that this will impede - and might in some cases be seen as a substitute for - a wider analysis of the risks facing the firm, and the resulting implementation of initiatives which may in themselves be more effective in addressing day-to-day operational risks, as opposed to LLP status, which provides 'last resort' protection against catastrophic claims.



Firms which still have some way to go to address risk management issues may therefore be better off doing so before seeking to convert to LLP status, and this may also make conversion easier if, and when, it does take place.



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