Eversheds team converts firm to largest legal limited liability partnership in UK

LLPs: firms with smaller international networks to lead way because of fewer tax problems

Eversheds became the UK's largest legal limited liability partnership (LLP) last week when it joined leading Birmingham firm Wragge & Co in converting to the new business vehicle, as Addleshaw Goddard said it is also considering the change.

At Eversheds - which overtook Mayer Brown Rowe & Maw's as the largest LLP, with 1,836 fee-earners - a special team was appointed to deal with conversion, led by outgoing head of operations Colin Brown.

He said: 'It took up a lot of time, and we had to consult accountants and take external legal opinions.'

At Wragge & Co, a similar team worked on the firm's conversion for several months.

Eversheds and Wragges' move brings the number of firms making the switch to LLP to 67, with another six pending.

Wragge & Co managing partner Richard Haywood said: 'The LLP is perfect.

It meets the needs of large professional practices and is far more relevant to providing legal advice in a modern commercial environment.

We expect more law firms to follow and we're already finding it a benefit in our recruitment offering.'

Mr Brown said: 'The expectation is that most major firms will be converting over the next year or two, so it's probably safe to assume that those lawyers who are likely to be the partners of the future will have a preference for limited liability status.'

Richard Linsell, a partnership specialist at Mayer Brown Rowe & Maw, said: 'There are lots of firms actively looking to become LLPs a year from now.'

He added that firms with few foreign offices are more likely to find the LLP model attractive because complicated taxation issues are less likely to obstruct conversion.

Mark Jones, the managing partner of recently merged firm Addleshaw Goddard, said: 'On balance, if you ask if Addleshaw Goddard is likely to be an LLP in two years, I think it is more likely than not.'

Meanwhile, Wragge & Co has announced a second year of fee income rising by 2%, taking it to 79.3 million for the 2003 year-end.

The firm achieved a record profit of 27 million, meaning a 34% margin and profits per partner of 255,000 for Wragge & Co's all equity partnership of 106 - up 8.5% on last year.

Senior partner Quentin Poole said the turnover was 'a satisfying result' considering the challenging trading conditions for clients while profit - historically seen by some as a 'chink in the firm's armour' - has enjoyed a 'significant and healthy turnaround'.

The firm's human resources group reported a 10% turnover rise to nearly 9 million, while the real estate group was up 8% to 22 million.

Intellectual property saw an increase of 6 %.

Jeremy Fleming