THE MANAGEMENT ARGUMENT-- The Partnership Act 1890 provides that, unless otherwise agreed, all the partners are entitled to an equal share of the capital and profits of the business.

Every partner may take part in managing the business and every partner is entitled to be involved in all aspects of the business.The arguments for change-- A large firm with many partners and offices cannot be run on Vict orian-style principles.

Every partner is owner, manager and worker -- these conflicting roles inhibit effective management.-- Turning a partnership into a company enables a small management team to get on with managing.

The 'partners' can elect management and vote on policy as shareholders at an annual meeting.-- A market can be created in shares and outside capital introduced.The arguments for Partnerships-- Good management engages staff commitment and responsibility at all levels.

It is difficult to maintain this culture in a corporation.-- Ownership, management and work can be clearly separated in a partnership.-- Business structures should not be a straight jacket.-- A market in shares works against the interests of the firm.

Current Law Society rules do not permit investment from outside.-- Corporate law imposes additional regulatory, fiscal and publicity requirements on the organisation, causing substantial additional cost for no practical benefit.THE LIABILITY ARGUMENTThe risks that every partner is jointly liable and that those held out as partners are also liable are well known.The options are: to limit contractually liability on specific transactions; to incorporate as a limited liability company, or to form a limited liability partnership (LLP).

LLPs are a new concept.

The Limited Liability Partnership (Jersey) Law 1996 received Royal Assent last November.

It gives separate legal existence from its partners; liability limited to the assets of the LLP; security of £5 million for creditors; unlimited liability for defaulting partners, but no personal liability for innocent partners.The Department of Trade and Industry has indicated that it 'intends to bring forward legislation at the earliest opportunity to make limited liability partnership available to regulated professions in the UK, subject to appropriate safeguards to protect the interests of those doing business with the limited liability partnership'It has also said that 'limited liability partnerships registered abroad, but operating from a place of business in the UK, will be required to file financial information equivalent to that to be required from limited liability partnerships registered in this country'.There are several factors to be considered when deciding whether to change a practice's structure to limit liability.

There is a risk of losing client goodwill in attempting to limit liability, particularly on a job by job basis.

Solicitors have been able to incorporate their practices since 1988 but the Law Society has registered only ten corporate firms without an associated partnership.Another factor is that new legislative proposals for LLPs may well contain financial requirements unacceptable to many firms.

Basing practices in Jersey may not create the right image because of 'tax planning' implications.None of the possible courses of action excludes the negligent individual from tortious liability.

But is it just the individual who is negligent, or does liability extend to failure to supervise, or failure to have a proper system of supervision? It is not difficult to contemplate creative litigators extending a tort action to a wide selection of partners in a firm.The question of how many firms are involved in transactions for which insurance is unavailable, or too expensive, must also be considered.PROFESSIONALISM AND MUTUAL TRUSTFor all firms the 'management' argument can be resolved within the partnership structure.

As to liability, a few of the very largest firms may consider the LLP an attractive proposition.

Th at is if the UK government ever introduces the legislation, and it is in an acceptable form.

Neither the Jersey LLP nor the limited liability company are likely to be adopted in the foreseeable future.Partnership creates a culture of collegiality and mutual trust between the partners and this leads to professionalism and excellence of client service.

It is, and will remain, the best business form for a solicitors' practice.