Norton Rose is to become the latest major UK firm to convert to limited liability partnership (LLP) status, making it the seventh top 10 UK firm to make the change.
Norton Rose is to convert on 31 July, more than one year after it had originally planned the switch. The delay was due to French and German tax treatment of LLPs, which has frustrated UK firms attempting to make the change.
French tax reforms would have seen French partners in UK LLPs subjected to double taxation. Additional concerns arose after planned reforms to German legislation would have led to significant tax charges for non-European Union partners in Asia and North America.
However, following a ruling by the German Bundestag in December 2006 and French tax authorities in March this year UK firms have been given the go-ahead to convert. Lovells, Linklaters and Barlow Lyde & Gilbert have all voted to convert this month.
Norton Rose chief executive Peter Martyr told Legal Week that the firm had not resolved all tax issues in time for a May conversion but chose the July date because it was keen to convert this year.
Partners at the firm voted to convert to LLP status last year but a ‘refresher’ vote will take place in the next two months, which is widely expected to be a formality.
The move means Slaughter and May, Freshfields Bruckhaus Deringer and Simmons & Simmons are the only top 10 UK firms yet to convert to LLP status. Fourteen of the top 20 firm have now converted, leaving Ashurst, Pinsent Masons and Hammonds the only outstanding firms.
Slaughters kicked the move into the long grass in 2004, arguing the change could damage its partnership culture, while Simmons is not thought to be currently considering such a change.
Freshfields and Ashurst have both said a conversion is under review.