Retiring from a law firm

[BenValue]

I have worked for a law firm for 20 years dealing with Wills and Probate. I am now going to retire. I own a 15% share of the law firm partnership.

Once I retire as a partner I guess I won't be protected by the firm's insurance policy in relation to any possible negligence claims. Is there any ways I can protect myself against this potential liability?

I know next to nothing about partnership law

[newlyretired]

I would expect any negligence claims to relate to the time that you were working, and to be covered by the insurance in place at that time...
...however IANAL and I'm sure that someone who knows more about this will be along soon.

newlyretired

[scrumpyjack]

What is the legal structure of the firm? LLP, Unlimited liability partnership etc etc

I guess you would normally have an indemnity from the continuing partners in your retirement deed but that of course is only worth what they can/will pay if things go wrong.

Don't forget you would also be on the hook for things like lease and pension liabilities, etc.

Usually partners, in stable marriages!, will have put assets such as the family home into the wife's name precisely to give some protection against these sort of liabilities.

Whether the firm's PII policy covers you in future depends on the terms. Normally I would have thought it would cover you for negligence claims arising out of past work if the policy was in force at the time of the negligence.

[keith]

Hi

you dont say whether you will be doing work as a self employed person

[BenValue]

Thank you very much for your replies

The firm I work for is an old fashioned unlimited liability partnership. I am one of the two equity partners. I receive a salary and a 15% share of the profits.

I have been given a new partnership agreement adding a new partner which says I retire on 28 January 2020. I have been asked to sign the agreement but I have said I want to take advice. There is no indemnity from the continuing partners in the agreement.

I got divorced two years ago and so have no wife/partner to put my assets into! I sold my house and I just hold shares in an investment portfolio.

I will have a look at the firm's PII policy to see what it covers.

[tacpot12]

I would suggest that you need to take independent legal advice from an expert in partnership transfers. I expect it will be money well spent.

[dspp]

I have worked for a law firm for 20 years dealing with Wills and Probate. I am now going to retire. I own a 15% share of the law firm partnership.

Once I retire as a partner I guess I won't be protected by the firm's insurance policy in relation to any possible negligence claims. Is there any ways I can protect myself against this potential liability?

I know next to nothing about partnership law

You should also be talking to your insurer about what I thought was called run on insurance, but I now think is called run off insurance:

https://www.professionalindemnity.co.uk ... n_Off.html

i.e. you can do this the legal way (your partners indemnify you) or the insurance way (just buy insurance).

regards, dspp

[Steveam]

I think run off insurance is only relevant if the firm is to cease trading and is required as part of the SRA close down process. I think the advice given above to consult an expert is excellent and will be money well spent for your future peace of mind regardless of claims. It might be worth talking to the firm’s PI insurer (with the other partners agreement). Make sure you keep the SRA properly informed about your retirement and ceasing to be a partner - the firm’s registration will need to be amended. IANAL.

Best wishes,

Steve

[scrumpyjack]

I retired from a very large partnership (>100 partners) 12 years ago but at that stage the partnership had already been transformed from a traditional unlimited liability partnership to an LLP, so things were quite simple. In a firm like that a number of partners are retiring every year so everything was properly organised with high quality legal advice. Dealing with retirements was routine.

I think you really must take proper advice on this particularly as with your firm (2 partners) retirement is not a routine procedure. Also if you have 15% presumably the other partner has 85% and must be the one calling the shots on everything!

You need to be protected and it should be the continuing partners who pay for the protection!

[MaraMan]

I think you should definitely get some professional advice. But from my days as a professional I would say that your company's PI insurance is claims made and as such the company would be covered, as they would be the insured for any claims made on an ongoing basis, arising from your prior acts. If you want cover for personal liability then I would suggest you probably need an individual run-off policy, these should be available from any decent broker.

[gryffron]

I would expect any negligence claims to relate to the time that you were working, and to be covered by the insurance in place at that time...

Whilst that's entirely true, it does rely on you knowing who the insurer was at the time. A friend of mine, long term company director long since retired, faced a work injury claim from an employee of thirty years ago. Although he always had appropriate insurance, he had no memory who the policy was with at that time.

Since, it appears to me, similar historic claims are possible in the OP's circumstances, it is well worth having a list of the historic policies kept somewhere safe.

Gryff

[Dod101]

I have worked for a law firm for 20 years dealing with Wills and Probate. I am now going to retire. I own a 15% share of the law firm partnership.

Once I retire as a partner I guess I won't be protected by the firm's insurance policy in relation to any possible negligence claims. Is there any ways I can protect myself against this potential liability?

I know next to nothing about partnership law

I think your most sensible first port of call is to know what the firm's PI policy says about retiring partners. it may be that you are covered anyway by its wording. If not, then professional advice, independent of your firm of course, may well be a good idea.

Dod

[dspp]

I have worked for a law firm for 20 years dealing with Wills and Probate. I am now going to retire. I own a 15% share of the law firm partnership.

Once I retire as a partner I guess I won't be protected by the firm's insurance policy in relation to any possible negligence claims. Is there any ways I can protect myself against this potential liability?

I know next to nothing about partnership law

I think your most sensible first port of call is to know what the firm's PI policy says about retiring partners. it may be that you are covered anyway by its wording. If not, then professional advice, independent of your firm of course, may well be a good idea.

Dod

And in any case it is the existing PI provider who is most likely to provide the run-off cover that I am fairly certain you would be advised to buy.

dspp

[Charlottesquare]

Another area worth considering may be a notice in the London Gazette, whilst a long time ago (1980s) I know my father insisted on his retirement as a partner in a law firm (Scotland) being so documented.

[BenValue]

Again many thank you for all your helpful replies. I am obtaining legal advice as suggested.

My partner was diagnosed with breast cancer yesterday and all this stuff seems slightly less important today!

[didds]

Since, it appears to me, similar historic claims are possible in the OP's circumstances, it is well worth having a list of the historic policies kept somewhere safe.

Gryff

and what happens if the policy was with a company that no longer exists?

or it does exists but the policy at the time had limits set that were seen as generous for the time but decades later dont come close to the sums that may be requested/due?

didds

[Dod101]

Since, it appears to me, similar historic claims are possible in the OP's circumstances, it is well worth having a list of the historic policies kept somewhere safe.

Gryff

and what happens if the policy was with a company that no longer exists?

or it does exists but the policy at the time had limits set that were seen as generous for the time but decades later dont come close to the sums that may be requested/due?

didds

I think the answer to that is whether the current policy is written on a claims made basis or not. In other words insurers recognise that claims can sometimes take a long time to be discovered and the policy will cover claims made in a given period and will not pick up only claims which occurred in a particular period. It is in any case often difficult to say when the act causing the claim occurred. PI claims are not like a motor car collision with a date and time of the occurrence but probably emerge over a period through a series of actions.

Dod