Professional Law Partnership: Assumptions on Origin and Development Tendencies
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Abstract
Lithuanian Law on Advocacy, which was adopted in 2004, established an innovative form of practice of Lithuanian attorneys-at-law – professional law partnership (advokatų profesinė bendrija), which was awarded with status of legal entity. This article deals with the main assumptions of professional law partnerships’ origin in the USA, Great Britain, and Germany, as well as analyses whether there were the same assumptions for establishment of professional law partnership in Lithuania.
The authors emphasize that professional law partnership is deemed to be the legal entity of limited liability only when it exercises the obligations not related to providing of legal services (e.g. obligations on lease of premises, purchase of technical equipment, etc.). However, the majority of obligations of attorneys-at-law are related to providing of legal services, where the limited liability is not applicable. This implies that if the professional law partnership fails to fulfill the obligation related to the providing of legal services and it lacks its own property for satisfaction of creditors’ requirements, the particular partner who provided the legal services would be subject to subsidiary personal liability in the amount of his / her own property. What is more, if it is not obvious, which partner of the professional law partnership has provided the legal services and the professional law partnership fails to fulfill the target obligation, the joint subsidiary liability of all partners arises. The authors make a conclusion that such regulation is one of the main reasons of poor applicability of professional law partnership’s institute in Lithuania.
The article presents that the main reason of the professional law partnership origin in the USA was an increasing number of court proceedings versus attorneys-at-law from significant law firms, which at that time operated on the grounds of partnership. In Germany the necessity to limit the law partnerships’ liability arose because of the increasing number of attorneys-at-law providing legal services on the basis of joint partnership. Furthermore, the increasing international competition in the sphere of legal services required the German attorneys-at-law to seek a more flexible form of practice with limited liability, allowing to provide services not only in Germany but also in foreign legal markets.
Before establishing the institute of professional law partnership in Lithuania, no solid researches were executed. Moreover, the explanatory letter of the new Lithuanian Law on Advocacy only stated that the particular form of Lithuanian attorneys-at-law practice – the professional law partnership – was adopted because such institute applies in other European countries and the existing forms of other legal entities were not appropriate for the practice of attorneys-at-law.
The authors emphasize that professional law partnership is deemed to be the legal entity of limited liability only when it exercises the obligations not related to providing of legal services (e.g. obligations on lease of premises, purchase of technical equipment, etc.). However, the majority of obligations of attorneys-at-law are related to providing of legal services, where the limited liability is not applicable. This implies that if the professional law partnership fails to fulfill the obligation related to the providing of legal services and it lacks its own property for satisfaction of creditors’ requirements, the particular partner who provided the legal services would be subject to subsidiary personal liability in the amount of his / her own property. What is more, if it is not obvious, which partner of the professional law partnership has provided the legal services and the professional law partnership fails to fulfill the target obligation, the joint subsidiary liability of all partners arises. The authors make a conclusion that such regulation is one of the main reasons of poor applicability of professional law partnership’s institute in Lithuania.
The article presents that the main reason of the professional law partnership origin in the USA was an increasing number of court proceedings versus attorneys-at-law from significant law firms, which at that time operated on the grounds of partnership. In Germany the necessity to limit the law partnerships’ liability arose because of the increasing number of attorneys-at-law providing legal services on the basis of joint partnership. Furthermore, the increasing international competition in the sphere of legal services required the German attorneys-at-law to seek a more flexible form of practice with limited liability, allowing to provide services not only in Germany but also in foreign legal markets.
Before establishing the institute of professional law partnership in Lithuania, no solid researches were executed. Moreover, the explanatory letter of the new Lithuanian Law on Advocacy only stated that the particular form of Lithuanian attorneys-at-law practice – the professional law partnership – was adopted because such institute applies in other European countries and the existing forms of other legal entities were not appropriate for the practice of attorneys-at-law.
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Authors retain copyright of their work, with first publication rights granted to the Association for Learning Technology.
Authors retain copyright of their work, with first publication rights granted to the Association for Learning Technology.
