Dechert's UK, Paris and Luxembourg partners have been left vulnerable to potential negligence claims after the firm converted its US and Frankfurt offices to a Pennsylvania limited-liability partnership (LLP)

The new structure, effective from 1 January, has been shaped in part by the fact that it has three partnerships. Frankfurt has been included in the US LLP as it is a branch of the US partnership. The UK partnership includes Luxembourg and has been left outside the US LLP, as has the separate French partnership. Partners in all locations were previously also partners in the US partnership and are now partners in the US LLP.

In the UK, the partnership is looking at becoming a UK LLP and is expected to convert soon. But in the interim, its two non-LLP partnerships are left exposed to the danger of potential claims when working jointly with their US and Frankfurt colleagues. Partner James Croock said: “It would clearly be preferable to have an LLP structure on a global basis, but it's necessary to take into account in particular tax issues, which do not make such a process straightforward.”

Richard Linsell, head of Mayer Brown Rowe & Maw's professional practices group, commented: “Until the international tax status of UK LLPs is clarified, the orthodox approach to gaining 'best LLP status', when there are firms in Europe and the States joining together, would be to put the European businesses into the US LLP, but to convert the UK partnership into an LLP here.”

Paul Weiss Rifkind Wharton & Garrison has just converted to a New York LLP, taking in Beijing, Hong Kong, London, Paris and Tokyo, as well as New York and Washington DC. Shearman & Sterling is shortly to vote on making the switch.