Planning partner appointments and retirements

Bringing new partners in and seeing others retire are big moments for any firm. Done well, they can help refresh leadership, motivate teams and reassure clients – but if not done carefully and strategically, they can cause disruption or trigger disputes.

This guidance applies to both UK limited liability partnerships (LLPs) and traditional general partnerships, noting where the rules differ.

When to start planning

Ideally, start six to 12 months before a planned joiner or retirement. Senior hires often have long notice periods and restrictive covenants with their current firms. Retirements may involve notice requirements, phased draw‑downs of capital and handover obligations.

Key things to consider for appointments

• Agree appointment terms in writing and make sure they align with your partnership agreement or, if there isn’t one, partnership law
• Cover profit‑share mechanics, drawings, tax reserves, capital contributions and whether the new partner is equity or fixed share
• Check voting rights, management roles and any probation or performance conditions
• Update the LLP or partnership agreement if the agreed terms don’t fit the current drafting – avoid side letters that create contradictions
• Confirm the incoming partner is free to join and has no enforceable restrictions that could harm your firm, and that any client moves are handled lawfully
• Document ownership of work product and confidential information
• Put in place clear policies on client introductions and revenue credit to avoid misunderstandings
• Agree who will tell key clients, what will be said and when
• Align your website, marketing materials and directories on the effective date, and provide an internal briefing so staff understand the change.

Key things to consider for retirements

• Check the agreement for the retirement process: notice periods, fixed or flexible dates, treatment of drawings and capital and profit allocation in the final period
• If the agreement is unclear, agree a written retirement deed that fills gaps and includes a clean release of past and future claims so both sides have certainty
• Clarify any ongoing duties to assist with claims and investigations and set reasonable terms for access to files and emails after departure
• Document a handover plan for client relationships, work in progress and pipeline matters
• Update engagement terms and letterheads where named partners are changing
• Apply restrictive covenants and non‑solicitation provisions proportionately and in line with the agreement and current law – have a solicitor review these to make sure they are enforceable
• Instruct accountants to calculate final profit shares, drawings reconciliations and timing of capital repayment. Review cash flow plans to avoid destabilising the firm; agree staged repayments or use capital replacement from incoming partners if needed
• Remove the retiring partner from bank mandates and internal approvals on the effective date and record the change in your partnership or LLP records. For LLPs, make the necessary Companies House updates and keep your significant control information accurate. For regulated firms, update your regulator’s register promptly
• Where a partner also has employee‑like benefits, check how pensions, life cover and other benefits end or transition. Issue clear written communications to avoid misunderstanding about status after retirement.

Consequences of late or poor planning

Failure to plan risks disputes over profit shares, drawings and capital, particularly around the final and first accounting periods. Tax errors can lead to incorrect self‑assessment returns, interest and penalties and cash flow strain if multiple adjustments hit at once.

Most importantly, clients can feel neglected during transitions, making it easier for competitors to win them away.

Practical timeline

• Six to 12 months out: review your agreement, map commercial terms and draft the necessary deeds and updates
• Three months out: finalise tax and capital mechanics, complete regulatory and filing preparations and agree the communication plan
• One month out: update mandates and systems, brief teams and obtain signatures on all documents
• On the effective date: action filings and communications and record the changes formally
• First month after: reconcile drawings, check filings have been accepted and complete client handovers.

Final thoughts

Treat appointments and retirements as structured projects with clear owners, dates and documents. Keep your agreement current so it matches how you operate. Communicate early and often with clients and your people.

A little organisation removes the drama and keeps your firm focused on delivering for clients while leadership evolves.