PricewaterhouseCoopers, the UK’s largest accountancy firm, has set a new target date of 1January 2003 to turn itself into a limited liability partnership.
It had originally announced that it would take up LLP status in the UK on 1 July this year, but the plans were delayed as the firm moved to sell its consulting arm to IBM in a £2.2bn deal finalised later that month.
The new LLP move is still subject to partner approval, but assuming it goes ahead PwC will become the third of the Big Four accounting firms to take up the new legal structure.
Ersnt & Young transformed itself from a traditional partnership into an LLP on the day legislation introducing them came into effect in the UK on 6 April 2001. KPMG made the move in May this year.
The main advantage of LLPs over traditional partnerships is that they allow firms to limit their liabilities in cases where damages are awarded against them.
Accountants have faced an increasingly litigious climate over the last decade, and the collapse of Andersen this year in particular has rammed home the dangers of being a partner in a large accountancy firm.
The risks of unlimited liability have also made it increasingly difficult for firms to attract new partners.
The downside of LLP status, however, is that firms are required to publish more details about themselves in their annual accounts.
PwC has been notoriously shy about its British performance, and has traditionally lost its UK annual results within aggregated fee income figures that include the rest of Europe, the UK and the Middle East. The firm’s next set of results cover the year to 30 June 2003.