The number of legal and accounting firms structured as partnerships has fallen dramatically over the past decade as professionals overwhelmingly adopt corporate models to run their business.
The latest Australian Taxation Office statistics show there are 15,547 legal and accounting service companies compared to 3161 partnerships, a respective 45 per cent increase and 26 per cent drop since 2006; but tax implications constrain larger firms from transforming from their archaic setup.
Class actions firm Phi Finney McDonald launched in Melbourne this month as an incorporated entity; but it is a structure familiar to the three founders, having come from listed firm Slater + Gordon.
“The financial benefits of partnership can be delivered to star performers outside of that particular structure,” said co-founder Ben Phi.