Legal practices must ensure they take into account the Professional Indemnity (PI) implications of a potential equity partnership, it has been advised.

Nigel Rushton, senior manager at investment management company Smith & Williamson, makes the assertion in an article for The Lawyer.

He predicts that any incoming partner should be expected to request details of the firm's PI provisions before entering into a binding agreement.

Although new to the equity, the incoming partner will want to know about exit strategy," Mr Rushton explains.

"Increasingly important are the firm's professional indemnity insurance arrangements, the adequacy of the cover and the claims record."

Marc Riches, assistant director of solicitors' insurance broker PYV Legal, stated: "In this more litigious society where a client is more ready to sue their professional adviser, it makes sound common sense that an incoming partner is aware of what liability a partnership carries by way of claims, or circumstance that may give rise to a claim, before signing on the dotted line."

He added: "It's not beyond the realms of possibility that walking blind into a partnership with a poor claims record might have a negative career impact for that partner going forward."

PYV are one of the UK's leading providers of professional indemnity insurance. This news article has been produced by Adfero in collaboration with PYV and its unauthorised use is not permitted.