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by dan-robertson
1932 days ago
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PwC are a big company and probably are pretty good at avoiding liability for themselves. Once upon a time companies with a partnership structure (eg law firms, accounting firms, private investment banks) were legally partnerships. In a partnership, partners have unlimited joint and several liability, which means that every partner could be held liable to an unlimited amount for anything any partner (or the partnership) did. I think this encouraged partnerships to avoid being liable or doing illegal things. These days there is a legal structure called a limited liability partnership (in the U.K. this was designed specifically for the big accounting companies like PwC) and true partnerships are less common. It’s not obviously a bad thing, unlimited liability is pretty rare these days (people have unlimited liability but usually act through limited liability companies. Lloyd’s underwriters (used to?) have unlimited liability. I can’t think of other examples. Maybe partnership structures were good for keeping people honest but I don’t really understand why a partnership is different from an LLC, and I feel like they don’t scale well to large organisations. |
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Technically I believe there's an exception for things that are very clearly the responsibility of a single partner (i.e. done without anyone else's knowledge or consent).
> It’s not obviously a bad thing
Disagree. We've seen a huge surge in accounting scandals since these accounting firms became limited-liability; the field has become dominated by these "too big to fail" companies who make massive profits while paying tiny penalties for their wrongdoing.
> Lloyd’s underwriters (used to?) have unlimited liability. I can’t think of other examples.
I believe there's a New York commercial law firm that's still structured as a traditional partnership.
> I feel like they don’t scale well to large organisations.
Maybe that's a feature rather than a bug.