For optimum protection, firms need to ensure that restrictive covenants contain the right contractual terms & that the proper steps are taken to enforce them, as David Fisher explains
- Whatever type of restrictive covenants partners are subject to, it is important that firms keep the restrictions under review and update them to account for changes in their business and developments in the law.
Some partnerships and LLPs choose not to impose post-termination restrictive covenants on their partners or members. This might be for cultural reasons, or (especially in small or new firms) because no partner or member wants to be prevented from competing with the firm or acting for their clients for a period of time if they happen to be the one who decides to leave. However, the majority of firms want the protection that good restrictive covenants can give to their business, and this means having the right contractual terms in the first place and taking proper steps to enforce them. Part one of this series covered the general
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