International law firms have evolved not least because global clients need legal advisers who can look after all aspects of multi-billion dollar cross-border deals. They therefore operate in precisely the kind of market where catastrophic claims could easily arise. Many of these firms are structured as a single partnership with branches in a number of financial centres. A mistake in one territory could become a personal catastrophe for every one of the partners. Even partners practising in different continents and time zones, and who have no personal responsibility for the mistake whatsoever, could be bankrupted.
The UK limited liability partnership (LLP) was designed to protect its members from such claims. Its protection is widely acknowledged to be effective overseas and a cut above that of its US counterparts. A handful of major London law firms have become UK LLPs, yet none of them has multiple overseas branches. Why have none of the firms with, say, 10 or 15 overseas branches adopted an LLP structure?
