Partnership dispute mediation and advisory counsel.
Mediators and advisory counsel for business partner disputes, LLP member exits, expulsion challenges and dissolution. Confidential, fixed fee, and built to keep the business trading.
Partnership disputes have a particular shape. The people arguing built the firm together, often on a handshake, and the business has to keep serving clients while the argument runs. Litigation between partners is unusually corrosive because it consumes the goodwill that is the main asset in dispute. That is why the overwhelming majority of partnership disputes end in a negotiated exit, and why mediation reaches that outcome months earlier and at a fraction of the cost.
Clerk&Counsel places experienced practitioners on partnership and LLP disputes in two roles. As advisory counsel, reading the partnership agreement or LLP deed, the accounts and the correspondence and giving a written view on entitlement, valuation and the realistic settlement range. As mediator, taking both sides through a full day and drafting the heads of terms that end it.
We are a clerking agency and a trading style of Found First Digital Ltd, not a chambers and not a firm of solicitors. Instructions come from departing partners, continuing partners, LLP members, professional firms and the solicitors acting for them, on a direct access or solicitor instructed basis.
Partnership and LLP disputes we mediate.
- Business partner disputes where one partner wants out and the terms are not agreed.
- Expulsion disputes and challenges to the exercise of an expulsion clause.
- Dissolution of a partnership at will and the winding up of partnership affairs.
- Profit share, drawings and capital account disputes, including undrawn profits.
- Goodwill, work in progress and client list disputes on exit.
- Restrictive covenants, team moves and post-termination obligations between former partners.
- LLP member disputes, compulsory retirement notices and members agreement construction.
- Breach of fiduciary duty, secret profits and diversion of partnership opportunities.
What a mediated settlement can do that a judgment cannot.
A court can order an account, a payment and a dissolution. It cannot order that clients are divided by sector, that the outgoing partner is paid over three years out of profits, that both sides issue an agreed announcement to staff and referrers, or that the departing partner keeps a desk for six months to hand over files. Those are the terms that actually let two people stop fighting, and they only come out of a negotiated settlement.
Confidentiality matters as much as flexibility. Court proceedings are public and a partnership dispute between professionals damages the reputation of the firm long before judgment. Mediation is private and without prejudice, so positions can be explored and dropped without consequence.
The timing is also different. A partnership claim with an account and inquiries can run for two years. A mediation is a single day, usually listed within a month, with heads of terms signed before everyone leaves.
What governs the relationship when the paperwork is thin.
Where there is no written agreement, the Partnership Act 1890 fills the gaps and its default terms are blunt. Profits and losses are shared equally, there is no power to expel a partner by majority vote, and any partner can dissolve a partnership at will on notice. An attempted expulsion without an express power may itself be a repudiatory breach, which shifts the whole negotiation.
For LLPs, the Limited Liability Partnerships Act 2000 and the default regulations apply where the members agreement is silent, and the unfair prejudice regime is imported with modifications. Where an agreement does exist, the argument usually moves to the construction of the exit, valuation and restraint clauses and to whether the process actually followed matched the process written down.
Fiduciary duties run alongside the contract throughout. A partner who diverts an opportunity, takes a secret commission or competes while still in the firm faces an account of profits whatever the agreement says, and that exposure is frequently the lever that unlocks a settlement.
Instructing a mediator or advisory counsel.
The steps are short and the costs are fixed in advance:
- Send an outline of the firm, the partners, and what has gone wrong. Documents can follow.
- We run conflict checks and shortlist a mediator or advisory counsel with sector experience.
- A written fixed fee is provided before anything is committed, normally shared between the parties for a mediation.
- Position statements and a core bundle are sent to the mediator, and the day is listed.
Specialist areas within this practice.
- Shareholder dispute mediation
Deadlock, unfair prejudice and share buyout mediation.
- Partnership disputes
Litigation authorised counsel for partnership and LLP claims.
- Commercial mediation
Wider commercial and business dispute mediation.
- Independent workplace investigations
External investigators for complaints inside professional firms.
Business partnership breaking down?
Send the partnership or members agreement if there is one, the recent accounts and a short chronology. We will come back with mediator or advisory counsel options and a fixed fee.
Common questions.
How do you resolve a partnership dispute?
Most business partner disputes are resolved by one partner leaving on agreed terms. The questions are what the outgoing share is worth, how it is paid, who keeps which clients, what happens to the premises and the bank borrowing, and what each side can say publicly. Mediation deals with all of those in one confidential day, which is why it settles a far higher proportion of partnership disputes than correspondence does.
What if there is no written partnership agreement?
The Partnership Act 1890 supplies the default terms. Profits and losses are shared equally regardless of capital contributed, no partner can be expelled by a majority vote, and any partner can dissolve a partnership at will simply by giving notice. Those defaults often come as a surprise and they change the negotiating position immediately, which is why an early advisory opinion is worth having.
How do you handle a 50/50 partnership dispute?
With two equal partners there is no majority to break the deadlock, so the practical options are a buyout by one side, a split of the business into two, a sale of the whole business, or dissolution and a winding up of the partnership affairs. A mediator will work through which of those preserves the most value, because dissolution usually destroys goodwill that both partners have spent years building.
Can an LLP member dispute be mediated?
Yes. LLP disputes tend to turn on the members agreement, the default provisions in the LLP Regulations where it is silent, capital and current account balances, and the operation of any compulsory retirement clause. All of that is capable of being settled at mediation, including the drawdown of capital over an agreed period.
Will the mediator decide who is right?
No. A mediator is neutral and has no power to impose an outcome. Their role is to test each side's case privately, narrow the gap, and hold the parties to a workable structure. If the parties want a binding determination without a trial, expert determination of the valuation or arbitration are the alternatives, and we can place practitioners for both.
How quickly can a mediation be arranged?
Typically two to four weeks from instruction, and faster where the dispute is urgent, for example where drawings have been stopped or access to accounting systems has been cut off. The fixed fee is agreed in writing before anything is committed.