Despite the never-ending political and economic uncertainty clouding the UK, the legal services market mostly continues to thrive. The sector was valued at an estimated £32.7 billion in 2017, an increase of 3.8% on the market value the year before (Consultancy.uk, 2018).
This continued success has meant that firms are prepared to increase the pay package to attract partners. This has contributed to an increase in partner mobility, with partners on the hunt for exciting (and well paid) opportunities.
With such an increase in partner mobility, firms are now seeking greater protection from the potential loss of clients should one of their partners leave the firm. However, firms must consider carefully the most effective way to protect their interests when a partner decides to leave.
One form of protection is through restrictive covenants. Restrictive covenants mean the firm will be in a stronger negotiating position when a partner moves. One of the trends we have seen in this area is firms introducing a non-compete covenant to prevent a partner working for a competitor. This is in addition to the the non-acting and non-soliciting covenants, which seek to prevent the partner from acting for the old firm’s clients at his/her new firm.
This article was first published in The Law Society Gazette, May 2019.