Big UK Firm Has Partners Hold Funds, Avoids Scary Bank Deposits
Thinking that its money would be safer in the hands of the law firm’s 112 partners, Addleshaw Goddard has paid them 12 million pounds (that’s about $17.8 million in U.S. dollars) but told them they can’t spend it yet.
The 779-lawyer United Kingdom firm accelerated payments for 2007-2008 profits to the partners, because government guarantees protect their personal savings if the bank in which they are deposited should collapse, explains the London Times. The same level of protection does not apply to corporate accounts, however.
The firm has told its partners they can’t spend the money and must hold it in accounts of 50,000 pounds or less, because that is the maximum amount that the government guarantees in personal accounts, the newspaper article continues. “The partners, who earn between £300,000 and £800,000 a year, have also agreed to repay the money if the firm needs it to support cash flow.”
The firm decided approximately three months ago to shift its funds to partners’ personal accounts.
