Baker & McKenzie (B&M) has reorganised its partnership structure, becoming the first international law firm to operate as a Swiss Verein.
B&M has been studying different structures for years to escape the Illinois partnership that reflected the firm’s roots, but not its status as an international law firm.
A B&M spokesperson said the change was purely driven by a desire to protect the firm’s potential liability and that the new structure is not tax beneficial. Rather than reorganising as a limited-liability partnership (LLP), as chosen by many, B&M has opted for the Swiss Verein favoured by accountants such as Deloitte Touche Tohmatsu and KPMG.
The Verein is a non-practising entity called Baker & McKenzie International, but the firm will continue to be known as just Baker & McKenzie. Each member firm of the Verein will operate separately, increasing the liability protection for the firm. The compensation system remains unaffected.
Switzerland is a natural choice for structures such as the Verein because its sophisticated banking environment makes it easy to move money between member firms. But Verein-like structures can also be found in offshore centres such as the Cayman Islands.
Some B&M offices, including in the US, already operate as LLPs, and this will not change under the Verein. The firm did not rule out the conversion of the UK office to LLP status in the future.