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The senior member of a solicitors’ firm has been a partner for many years and has increased his share of goodwill by making purchases from retiring partners. Changes in partners now take place without payment for goodwill
I act on behalf of a three-partner solicitors’ practice. The senior member has been a partner for many years during which he bought into the partnership and increased his share of goodwill.
He has paid about £100 000 outside the partnership to retiring partners. However in the past five years changes in partners have taken place without any payment by the new partners for goodwill because it has been felt that goodwill can no longer be justified with the changes that have taken place in the legal sector.
During this time the profit share of the senior partner reduced from 40% to 25% and increased again to one-third after a partner left in 2013.
The partnership converted to a limited liability partnership (LLP) five years ago and the business of the LLP will be transferred to a newly formed limited company later this year. There is no intention...
