Clear skies ahead? Navigating codes of conduct for professional partnerships

Partnerships and LLPs don’t have the benefit (or the burden) of the statutory framework that governs company directors. There are no prescribed duties of care, no Companies Act 2006 to fall back on. What partners owe each other and how they are expected to behave is largely a matter of contract.

That gap has made codes of conduct increasingly popular, particularly as firms face growing scrutiny over workplace culture, bullying and the treatment of junior members. But too many codes are drafted as exercises in box-ticking rather than genuine governance.

With the sun out and spirits high, there may be no better time to grab a cold drink, take a step back and consider what it actually takes to produce a code that works.

The legal basis for binding partners

The starting point is obvious but often overlooked: a code of conduct has no free-standing legal force. Partners are not employees; you can’t simply impose terms on them from above. A code binds partners only if it’s properly rooted in the partnership agreement or, for LLPs, the members’ agreement.

In practice, that means either incorporating the code directly into the agreement or cross-referencing it with an express provision permitting amendment by a defined majority. Get this wrong and the code is little more than a mission statement: fine for the website, useless in a disciplinary process.

For LLPs specifically, firms need to mind the decision-making mechanics in the members’ agreement. The Limited Liability Partnerships Regulations 2001 supply default rules where the agreement is silent, but those defaults are rarely adequate for adopting something as significant as a code of conduct. If the agreement requires unanimous consent for amendments, a single dissenting member can block the whole exercise. It’s worth addressing this procedural point early, ideally before the substantive drafting begins.

What a well-drafted code should address

Too many codes read like a set of corporate values pulled from a strategy away-day. A code that’s going to do any real work needs to deal in specifics. The following areas are, at a minimum, non-negotiable:

1. Professional standards and conflicts of interest: partners who are solicitors, accountants or other regulated professionals are already bound by their own regulators’ codes (such as the Solicitors Regulation Authority or the Institute of Chartered Accountants). The firm-level code shouldn’t simply duplicate those obligations; it should supplement them. Where does the firm’s position on conflicts go further than the regulator’s minimum? What is the firm’s stance on accepting instructions from clients in contentious sectors? These are the questions worth answering

2. Equality, diversity and inclusion: it’s no longer enough to have an EDI policy that sits in a drawer. Clients, particularly institutional and public sector clients, are actively auditing firms on this. A code should set out concrete expectations: participation in mentoring schemes, representation targets on pitch teams and clear consequences for discriminatory behaviour. Vague commitments to ‘fostering an inclusive environment’ don’t cut it

3. Whistleblowing: LLP members already qualify as ‘workers’ under employment legislation, which means they have statutory protection if they blow the whistle on wrongdoing. But statutory protection is a floor, not a ceiling. The code should go further: it should name the individual or committee to whom concerns should be reported, confirm that raising a concern in good faith will not be treated as a breach of duty and set a timetable for acknowledgement and investigation. Partners will not report misconduct if they think the process is opaque or retaliatory

4. Harassment and bullying: this is the area where most codes are tested and where most fall short. Power imbalances in partnerships, between equity and salaried partners, between founding members and recent joiners, create fertile ground for bullying. The code must be unambiguous: harassment and bullying are incompatible with membership of the firm, full stop. No exceptions for rainmakers. No softer treatment for the partner who happens to control the largest client relationship.

Enforcement mechanisms and procedural safeguards

A code with no enforcement mechanism is worse than having no code at all: it creates expectations and then fails to meet them. The agreement needs to give the firm teeth, with a graduated sanctions framework running from formal warnings through suspension of management rights or profit share, up to and including expulsion under the terms of the firm’s governing agreement.

Critically, the code must be clear about who decides. Is it a managing partner acting alone? A conduct committee? The full partnership? Ambiguity at this stage is an invitation to challenge.

Procedural fairness isn’t optional. A partner accused of misconduct must know the substance of the allegation, have the opportunity to respond in writing and, where appropriate, in person, and have the matter determined by someone without a personal stake in the outcome. This isn’t merely good practice; it’s the minimum required to withstand a challenge, whether through formal dispute resolution, court proceedings or simply the damage caused by a public falling-out among partners.

The growing number of partnership disputes reaching the courts should serve as a reminder of how badly these things can go when process is neglected.

Clouds on the horizon

The first, and frankly the harder one, is buy-in. Senior partners who built a firm in an era when ‘governance’ meant knowing whose round it was at the pub can be deeply resistant to what they see as bureaucratic overreach. The answer isn’t to water the code down until it’s inoffensive to everyone. It’s to make the commercial case: firms with clear behavioural standards are better placed to retain talent, satisfy client due diligence and avoid the reputational fallout that comes from a misconduct scandal reaching the news.

The second is selective enforcement, or, to put it plainly, the tendency to look the other way when the person in breach brings in a lot of money. This is corrosive. It undermines the code, demoralises other members and, if the inconsistency falls along lines of race, sex, age or another characteristic protected under equality law, exposes the firm to discrimination claims. A code must apply to everyone, or it applies to no one.

Getting it right

None of this is especially complicated, but it does require commitment. Anchor the code in the partnership or members’ agreement so it has contractual force. Draft with specificity: name the behaviours, set the standards and spell out the consequences. Build a fair process for investigation and sanction and make sure the people running it are genuinely independent.

The hard part is enforcing it consistently, regardless of who is involved. A well implemented code of conduct will not eliminate every storm, but it will give the firm a solid umbrella when one hits.

Get it right, and the skies don’t just clear: they stay clear for the life of the partnership.