Library

Palmers Solicitors L-excels in latest Law Society assessment

Press Release Press Releases 15 May 2024

Essex-based Palmers Solicitors has hit another mark of excellence, just months after celebrating its 40^th anniversary!

The firm has achieved a renewal of its prestigious Lexcel accreditation following a thorough review of its policies, procedures, strategies and management – with no identified major non-compliances.

Lexcel, the Law Society’s legal practice quality mark, sets the standard for compliance, practice management, client care, and management of people, information and finances.

It also offers a support system for client retention and practice growth, ongoing compliance and lowering new and existing risks.

Lexcel accreditation provides an assurance to clients and colleagues that the firm is leading the way within the legal sector, prioritising great client care and internal management.

The firm itself was recognised for its “comprehensive” risk management processes and “excellent” internal updates to keep the team up to date on the latest developments in the community and the legal sector.

Most notably, the practice received commendation for its “good and honest” strategic plan detailing strengths, challenges and expansion plans.

Gina Newman, Practice Manager at Palmers Solicitors, said: “We’re all incredibly proud of this achievement.

“We’re grateful to everyone in the team who assisted with our assessment, including collating information, taking part in interviews and maintaining a culture of excellence within the practice.

“We were particularly pleased to be recognised for our strategy and business planning, which we’re using to drive our team forward and continually develop the way we serve clients and the services we can offer.

“Looking forward, we’re all taking this opportunity to reaffirm our commitment to one another, our clients and the local community.”

Becoming a law firm Director is what you make of it

Press Release Press Releases 14 May 202415 May 2024

Until recently, partnership in a law firm was seen as the end goal for many junior solicitors, an inevitable destination of a decades-long career.

However, research suggests that this may no longer be the case. A 2024 LexisNexis survey found that 49 per cent of firm leaders have noticed a decrease in the number of associates aspiring to partnership level, rising to 63 per cent for leaders in larger firms.

This is not, as could be assumed, purely a result of career dissatisfaction. Three quarters of associates planned to stay in private practice in the coming five years, with 58 per cent planning to stay at their current firm.

It seems it is the result of a negative perception of being a partner and what the role entails.

While we accept that increasing seniority is not going to be right for everyone, some of our most recent Directors are here to demonstrate why directorship looks different for everyone and show just how rewarding it can be.

Directors at Palmers

Supervising Directors, Donna Smy (Private Client) and Erin Cronin (Residential Property, Head of Rayleigh Branch), got together to share their thoughts on their role as Directors at Palmers Solicitors.

Donna said: “I enjoy working within a team of leaders who have the same focus and care about the business, clients and staff. It is so rewarding to create a supportive and positive environment for everyone to flourish in their career.”

“The role of being a partner or director is very different to simply being a solicitor. You are helping to maintain and grow a business which will be a lasting legacy for future generations of solicitors to come.”

Erin was particularly keen on “taking on new challenges”: “Palmers has offered plenty of opportunities to utilise my skills and supported me in progressing into the director of the department. I enjoy how the management committee always welcome new ideas and approaches to improving the firm’s strategy and culture.

“I’ve gained a real sense of achievement and an ability to enhance my skills with the support and guidance of those who have gone through the same process before me.”

Driving the decision

What made our talented Directors decide on a career in legal leadership?

Each person comes into the role with their own goals and strategies, but directorship roles are generally united by a drive to shape the direction of a firm and that of its team.

In Donna’s words: “I always felt that the wellbeing of my colleagues and peers was important and realised that this is outset of simply being a solicitor – I had a desire to manage to ensure that the working environment for all staff was positive.

“I also felt it was important for me to have a say in how things might be run so that I had more control over my own workload and career.

“With being a fee earner and manager, you have to learn at an enhanced level how to prioritise your time, work efficiently and multi-task. You polish those skills so well in juggling lots of different tasks that it naturally is then utilised in all aspects of your job – and sometimes outside of work too!

“As a Director, you also get an insight into the mechanisms of the business and why decisions are made. Understanding the reasoning for something being so important to a business really helps to focus your mind on those aspects of the fee earning role.”

Erin added: “Directorship provided me with the opportunity to take the next step in my career and accept new challenges such as managing teams, being part of the senior management team to help shape both the firms strategy and that of the department.”

Erin and Donna agreed that managing team members during periods of difficulty or sensitivity can be a challenge with a steep learning curve, but a surmountable one with the support of more experienced directors and colleagues.

Choosing the right career path

How firms choose to approach the issue of progression to partnership with junior staff members is central to encouraging ambition.

Presenting partnership or directorship as one of many viable options is crucial since there are plenty of ways to establish a rewarding career in law. We urge junior solicitors to consider directorship as something they can shape, rather than something into which they must fit.

Advising junior staff on choosing a path through the profession, Donna said: “Have the end goal in mind as you progress through your career, as you are always striving to work towards something – but be prepared to take different paths as you go along and learn more about what you enjoy and what suits your skillset.”

Erin’s approach resonated with her colleague’s thoughts: “Career progression is as much the responsibility of the individual as it is the firm’s.

“I would advise setting clear goals and identifying what you want from your career and the next steps in achieving this.

The approach to setting out your career should be a partnership or directorship and actively discussed with your management to ensure that you’re on the right path.”

Please contact us to speak to a member of our team.

Misconceptions over inquest process highlighted by George Gilbey investigation

Press Release Press Releases 8 May 2024

By Jeremy Sirrell, Supervising Director, Palmers Solicitors

The inquest into the death of Gogglebox star George Gilbey began last month, hearing that Mr Gilbey’s injuries were “consistent with a fall from height”.

This series of tragic events, resulting in a formal investigation into the circumstances around the death, has brought to light the vast misconceptions on the public stage surrounding the inquest process.

The inquest process

While many inquests involve cases of public interest, there are plenty of misconceptions surrounding the process which can result in confusion.

It is often the case that inquests are run alongside investigations by other state authorities, such as the Police or the Health and Safety Executive (HSE).

The purpose of an inquest is to determine who the deceased was, when they died, where they died and how they died – but not to determine whether there was any criminal or other liability.

The inquest is running alongside a criminal investigation in which two men have been arrested and questioned.

Accordingly, inquests are often opened, and then adjourned after a preliminary hearing, whilst other organisations carry out investigations pertinent to their own specialism, usually with a view to determining whether there is a criminal liability of some kind.

In such circumstances, inquests will often start and then be adjourned off, waiting to receive a formal report or at least the result of that investigation. It may then resume in a second or third hearing and the inquest being finalised.

Does public interest impact the case?

From an inquest point of view, no.

Of course, there is significant public interest in this case due to the popularity of Gogglebox and there is likely to be some media presence as a result.

However, this will not affect the coroner in any way. The coroner will conduct their inquest with the concerns of the relatives of the deceased at the forefront of their mind.

Inquests are, first and foremost, an investigation into the death of a person and the most important people at an inquest are the relatives of that person who are given primacy of position.

This of course is very different to a criminal investigation where the relatives of the deceased will be regarded only as potentially useful witnesses during the investigation, with primacy given to state legislation and any potential breaches.

Here it is likely that the inquest will remain adjourned off for many months whilst the Police investigation continues and when it concludes it is likely to resume and with the additional information obtained from the Police during their investigation.

For advice on the inquest process, please contact Jeremy Sirrell at jeremysirrell@palmerslaw.co.uk or get in touch with a member of our team.

Three terms you need to know to avoid wrongdoing when managing insolvency

Palmers Solicitors Business News 26 April 2024

If your business is in financial distress or it looks like you won’t be able to meet your financial obligations, there may be certain things that you need to do to meet legal requirements and repay your commercial debts to the best of your ability.

Failing to do this can be described by three terms:

Misfeasance
Malfeasance
Nonfeasance

These represent three types of wrongdoing that result from failing to act or act appropriately.

In the context of insolvency, committing any of these types of wrongdoing can result in further action being taken, so it’s important to understand how to avoid wrongdoing in the course of insolvency proceedings.

Misfeasance

Misfeasance means that you failed to carry out a duty correctly without the intent to cause harm.

Applied to corporate insolvency, the term typically refers to actions by company directors or officers that are lawful in nature but carried out in a manner that is negligent or breaches their fiduciary duties.

This can include making decisions that harm the company’s creditors, such as selling assets at undervalue, in order to raise capital quickly.

This is clearly not in the creditors’ best interest, but it was not done maliciously – in fact, it was done with the intent of repaying a portion of the company’s debts quickly.

Malfeasance

Malfeasance is deliberately failing to carry out a duty properly or doing something in direct contradiction with a duty with the intent to cause harm.

Within the framework of corporate insolvency, this term covers actions taken by company directors or officers that are illegal or fraudulent.

Examples include misappropriating company funds, falsifying company accounts, or engaging in fraudulent trading practices.

Malfeasance is often considered to be a more severe offence than misfeasance, as it involves deliberate wrongdoing.

Nonfeasance

Nonfeasance denotes a failure to act at all when there was a duty to do so.

In relation to corporate insolvency, nonfeasance might involve directors failing to keep adequate financial records, not filing required documents with the Government, or failing to act when the company is insolvent to mitigate losses to creditors.

What happens next?

When a business becomes insolvent, acts of financial wrongdoing can significantly affect the outcome for creditors, shareholders, and other stakeholders.

Directors and officers may face personal liability for debts or damages arising from these actions, especially if their conduct contributed to the company’s insolvency or exacerbated the financial situation.

Misfeasance, malfeasance, and nonfeasance can all trigger legal actions against the directors, leading to fines, disqualification from holding directorships and in severe cases, imprisonment.

The law imposes strict duties on directors and officers to act in the best interests of the company and its creditors, particularly when there is a potential for the business to become insolvent and default on debt payments.

It is essential for directors and officers to understand their duties and the distinction between these forms of misconduct.

Acting responsibly and in line with your legal obligations is a must to minimise the damage to you and your business caused by insolvency.

Our team of experts can advise on navigating corporate insolvency – contact us today.

Having the right employment contracts – tips for SMEs

Palmers Solicitors Business News 26 April 2024

Whether your business employs only a handful of employees or thousands, employment contracts are a legal obligation all employers must comply with.

Having these contracts in place allows you and your staff to know exactly where you stand in terms of obligations and rights, whilst also providing legal protection should issues arise down the line.

Lisa Judd, our Head of Employment & HR Advisory, goes into the importance of secure contracts for SMEs and what should be included.

When should contracts be introduced?

Contracts should be provided from the first day of employment.

Legally, you do not have to provide a written contract but instead a statement of main terms. However, if you do not provide a written contract, that does not mean that there is no contract in place. Taking on an employee automatically generates a verbal contract, based on any discussions and what happens in practice, which can lead to dispute. It is for this reason that it is recommended for both employers and employees to have a written contract in place.

A well drafted employment contract also increases the options available to an employer when dealing with common workplace issues e.g. giving the employer the ability to make deductions from wages that otherwise they could not make, for any sums due to the employer.

What to include

Employment contracts are made up of both express terms (those stated in any written contract and implied terms (implied by fact, law, custom and practice).

Express terms should include:

The names of the employer and employee
The date the employment commenced
Terms setting out remuneration and contractual benefits.
Working hours
Job title and duties
Any probationary period
Place of work
Notice terms
Holiday entitlement and pay
Terms relating to any requirement to work outside the UK
Whether any collectively agreed terms apply

Care should be taken to identify whether any benefits offered e.g. sick pay or bonus/commission are contractual or discretionary.

In addition, employers may wish to include some form of post-termination restrictions in order to protect their confidential information. These will not be appropriate for all employees but may be very important for certain types of client-facing employees.

Implied terms include:

Duties on employers to provide work and pay
Duties on employees to be ready willing and available to do it and to obey reasonable instructions and to exercise reasonable care and skill
A duty of mutual trust and confidence between employer and employee
A duty of fidelity
A duty on employers to take reasonable care of the health and safety of their employees (including both physical and mental health)
A right to reasonable notice

It is best to include all of the terms in writing when drafting a contract. This ensures that there are no misunderstandings with what is expected of both employees and employers. In addition, employers may wish to include some form of post-termination restrictions in order to protect their confidential information. These will not be appropriate for all employees but may be very important for certain types of client facing employees.

Different types of contracts

Typically, employers might want to have Directors Service Agreements, a contract for more senior employees and one for more junior employees.

They may also need contracts for staff who are full time or part time, who only work part of the year, or who have irregular or no guaranteed hours.

Sometimes it is sensible for employment contracts to be in the form of a deed rather than a simple contract, for example when new terms like longer notice or restrictive covenants are introduced without some additional consideration (e.g. without their being accompanied by a pay rise, bonus or promotion).

Updating contracts

It is important to keep contracts up to date to reflect any changes e.g. in employment laws or arising from any change in the role or seniority of the employee.

Currently it is sensible for employers to be checking whether the way they calculate holiday pay is fully compliant with recent statutory changes, especially for employees who work overtime so regularly that it might be considered part of their normal remuneration.

Simple contractual changes purely benefiting the employee, like updating remuneration provisions e.g. for the recently announced increase to the National Minimum Wage (effective April 2024) can be done by way of a simple letter confirming the rise.

For more extensive changes, especially those more for the employer’s benefit or not having immediate binding effect (like changes to notice or port termination restrictions) it is sensible to take implementation advice.

This will usually be to consult and to endeavour to get the employee to sign to confirm not just their receipt of new terms, but their acceptance of them, but there are other options available where agreement cannot be reached.

If you need help with employment contracts, get in touch with one of our experts today.

Sharing success: The legal considerations of setting up employee share schemes

Palmers Solicitors Business News 26 April 2024

In the evolving landscape of corporate governance and employee incentives, employee share schemes (ESS) are gaining traction as a means for companies to align the interests of their employees with those of the business.

Among these, the Enterprise Management Incentive (EMI) and Employee Ownership Trust (EOT) schemes stand out for their potential to drive growth, enhance employee engagement, and facilitate succession planning.

As more and more businesses explore the benefits of ESS, it is important that they consider the unique legal implications of passing on part of their business to their team.

The Rise of Employee Share Schemes

The increasing popularity of ESS is no coincidence. In an era where talent retention and motivation are paramount, these schemes offer a tangible way to reward employees not just for their present contributions but also for their role in the company’s future success.

The EMI and EOT, in particular, have garnered attention for their favourable tax treatment and flexibility, making them attractive options for both employers and employees.

The ESS have also been shown to be a positive way to encourage employee “buy in” and commitment, as staff feel a stronger connection to their place of work, thanks to the financial opportunities on offer.

Enterprise Management Incentives (EMI)

The EMI scheme is designed for small to medium-sized enterprises (SMEs) with high growth potential, allowing them to grant share options to key employees as a form of non-cash remuneration.

The legal framework governing EMIs is intricate, with strict eligibility criteria for both companies and employees.

Companies must navigate these regulations carefully to ensure compliance and maximise the scheme’s benefits, which include tax advantages for both the employer and the employee.

Key considerations for setting up an EMI include:

Company eligibility: The company’s gross assets must not exceed £30 million, and it must operate in a qualifying trade. Your company needs to operate independently, meaning another company should not own or control over 50 per cent of its ordinary share capital. Additionally, there must be no existing arrangements for such ownership or control to occur. If your company owns any subsidiary companies, these subsidiaries must also meet the criteria for EMI eligibility. Specifically, if they are subsidiaries managing property, your company must own and control at least 90 per cent of them.
Employee eligibility: EMI options are available exclusively to employees who commit to working a minimum of 25 hours per week. For those working fewer hours, at least 75 per cent of their total working time must be dedicated to the company. Additionally, employees holding a ‘material interest’ in more than 30 per cent of the company’s share capital prior to the granting of options are ineligible to participate.
Limitations: There is a limit on the value of shares that can be held under EMI options, which currently stands at £250,000 per employee.
Granting Options: The process of granting options must comply with specific legal requirements, including the terms of the option and how it is communicated to the employee. The most that a company can grant is £3m in unexercised options at any one time.

Employee Ownership Trusts (EOT)

EOTs represent a different approach to employee share ownership, where a trust acquires a significant stake in the company on behalf of all employees.

This model promotes a collective ownership culture, with employees benefiting indirectly through the trust.

The EOT has become a popular mechanism for succession planning, particularly among companies looking to preserve their legacy while ensuring their workforce is invested in the company’s future.

Legal considerations for establishing an EOT include:

Structure: The trust must be established with the sole purpose of holding shares for the benefit of the employees.
Control: There are specific requirements regarding the company’s control and the trust’s operation, including the appointment of trustees.
Benefits: While the EOT offers tax efficiencies, such as relief from Capital Gains Tax on the sale of shares to the trust, companies must comply with various conditions to qualify for these benefits.

Additional legal considerations

Setting up an EMI or EOT scheme is not without its challenges. Companies must consider the legal implications, including compliance with tax laws, corporate governance standards, and employment regulations.

Additionally, the process involves meticulous planning and documentation to ensure the scheme is implemented effectively and aligns with the company’s strategic objectives.

The decision by owner-managers to create ESS may also bring them in conflict with other shareholders without proper consultation, leaving them open to litigation in the most serious circumstances.

These two share schemes are only part of several share schemes made available to employees and there may be other options that are more suited to your business.

Ultimately…

Employee share schemes like EMI and EOT are powerful tools for fostering a shared sense of ownership and commitment among employees.

However, the success of these schemes hinges on a thorough understanding of the legal landscape and meticulous planning.

Companies contemplating the introduction of an ESS should seek expert legal advice to navigate the complexities involved and ensure that their scheme not only complies with the law but also aligns with their business goals and culture.

To find out more about our corporate legal services, including our expertise in shareholder arrangements and company structures, please contact us.