In this Live Expert Discussion, a panel of market-leading partnership and employment lawyers, a law firm management consultant and a private equity recruitment specialist discuss everything you need to know about the legal and commercial risks, protections and strategies, and commercial realities of partner team moves in the Professional Services and Private Equity sectors.
Team moves are often considered to be a key strategy for expansion and are viewed by some as a more effective option than simply hiring an individual partner, without the rest of their successful team. However, it is common knowledge that embarking on a team move is a potentially high-risk strategy, with many pitfalls, and partners who are looking to move firms in this way often find themselves facing expensive litigation as a result. It is therefore critical that partners and acquiring firms consider the potential risks and remedies that are available against them in the event that they breach their obligations, as early as possible and with the benefit of clear legal advice.
There are likely to be many team moves afoot in the current economic climate, with top firms inevitably beginning to consider whether they may benefit from hiring new teams, who would not otherwise be available for potential recruitment in ordinary circumstances. On the other hand, partners may be considering what the future holds for them at their existing firm, depending on how their firm has managed to weather the COVID-19 storm and has treated them during this difficult period.
In the recording of this discussion, chaired by Sarah Chilton (CM Murray LLP), you can hear expert panellists Jonathan Cohen QC (Littleton Chambers), Robert Millard (Cambridge Strategy Group), David Fisher (CM Murray LLP), Gail McManus (PER Recruitment) and Wonu Sanda (CM Murray LLP) discuss the key legal issues and wider commercial realities of partner team moves, including:
- The key express and implied obligations that normally apply to partners/LLP members and are likely to pose a significant issue when contemplating a team move, including duties of good faith and to give a true and fair account, and post-termination restrictions;
- What are the risks of breaching any express or implied obligations in the context of a team move? What remedies would be available to the exiting firm, in the event of breach? Would the situation be exacerbated if partners attempt to bring associates or other junior employees along with them in a team move?
- What are the commercial and practical realities of embarking on a team move? What are the types of steps that should be taken by partners and the firms they are looking to join, and at what stage, in order to minimise their legal and financial risks? What considerations should be taken into account when thinking about a potential settlement strategy? Should all parties obtain separate legal representation?
- What steps can be taken by firms to protect themselves against team moves, or at least to mitigate against the risk? What are the types of provisions that can and should be inserted into membership/LLP agreements in order to minimise any potential damage suffered by firms in the event of a team move attempt?
- Assuming the move is a success, how can acquiring firms successfully integrate the new team into their business? What level of collaboration is needed between the new team and the existing workforce for the team move to be truly effective?
If you would like to discuss any of the issues raised in this recording further, or for guidance in relation to the legal obligations, risks, remedies and other practical issues associated with a potential or threatened team move, please contact Partners Sarah Chilton and David Fisher or Associate Wonu Sanda, all of whom specialise in partnership and employment law issues for firms, partners, multi-national employers and senior executives.