Benefits of Membership

LAWorld is a dynamic, modern and technically efficient international legal network.  Our members tell us that the benefits of membership are:
  • The immediate advantage of being internationally connected - with fast access to expert cost effective legal advice anywhere in the world. Your clients will be favourably impressed by the international capabilities you can now offer.
  • The opportunity to receive and make referrals to and from responsive lawyers that you meet and get to know as colleagues, who are bound together by a quality code of practice.
  • Our 55 members are currently located in the following 44 countries: Albania, Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, China, Colombia, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Ecuador, England, Finland, France, Germany, Greece, Hungary, India, Israel, Italy, Japan, Malaysia, Mexico, Morocco, Netherlands, Nigeria, Poland, Portugal, Romania, Russia, Singapore, Slovak Republic, South Africa, Spain, Sweden, Switzerland, Turkey, United Arab Emirates and United States of America.  If LAWorld does not have a member in a jurisdiction that is important to you, it is likely that at least one of our members will be able to recommend a suitable local lawfirm.
  • The use of the LAWorld logo and brand to increase your profile with your clients
  • Annual and regional meetings to discuss issues of common interest, to enhance your international business connections and initiate sound marketing and practice development ideas within a non-competitive legal environment. In recent years the Annual Conference has rotated in member cities around the world:  2012 Rio de Janeiro, 2013 Zurich, 2014 Hong Kong, 2015 Washington DC and 2016 will be in Cape Town, between 6-8 April 2016.  Members connect several times a year: at the annual conference, regional meetings, at the annual International Bar Association conferences and via telephone conferences.
  • Membership of LAWorld is useful in helping to attract and retain high quality staff, as employee exchanges can be arranged with other LAWorld law firms around the globe.
  • An established Code of Practice adopted by all member firms Support of an English speaking administrative and marketing Executive Office with contacts around the world
  • Benefit from inclusion in a modern and technically sophisticated website with a website optimisation programme which has given LAWorld a top Google position for "international legal networks".
  • Participation in marketing and business development initiatives including:

- A website that provides an international legal profile for your firm

- introductions to referrer business organizations during each annual conference

- mutual education and support at conference with talks about local legal/business topics; practice development and marketing topics.

- members brochure

-members on-line blog

- LAWorld marketing material including website entry, newsletters, inclusion in the Martindale-Hubbell International Law Directory, HG Org etc

- Business and Marketing Plan with several new initiatives to support our members

- Internal member news bulletins - keeping you in contact with members regularly

- English editing services for articles, websites etc.

- A younger lawyers network, which encourages the more junior lawyers in your firm to become actively involved in developing social and business relationships with other younger lawyers from around the world.

LAWorld News

IRS proposes new regulations on carried interests and fee waivers as disguised compensation

The Internal Revenue Service of America recently proposed new guidelines that, under certain circumstances, would re-characterize carried and other service-related equity interests in partnerships (which for tax purposes includes limited liability companies) as disguised payments for services. 

If a partnership interest granted to a service provider is re-characterized as disguised compensation, then the service-related partnership interest disappears for tax purposes and the service provider is no longer treated as an equity owner (i.e., a partner or member) with respect to the service-related partnership interest. As a result, partnership allocations and distributions made on the service-related partnership interest to the service provider become ordinary compensation income (even if the partnership’s underlying income consists of capital gains), potentially subject to FICA and other employment-related tax provisions.

Taking an overall “facts and circumstances” approach, the proposed regulations view the presence or absence of “significant entrepreneurial risk” (which itself is also determined in light of the overall facts and circumstances) as the overriding indicator of whether a service-related partnership interest is a disguised compensation arrangement. If a service-related partnership interest carries “significant entrepreneurial risk,” the partnership interest will generally not be treated as a disguised compensation arrangement, unless the presence of other compensation-related factors indicates otherwise (e.g., transitory or short-term equity ownership, allocations and distributions tied to the types of services rendered or made over periods comparable to those over which non-partner service providers would typically receive payment, and a small continuing interest in overall partnership profits).

In contrast, a service-related partnership interest without “significant entrepreneurial risk” is deemed to be a disguised compensation arrangement, regardless of the degree to which other compensation-related factors may or may not be present. The presence of any one of the following five factors creates a presumption that no “significant entrepreneurial risk” exists: (1) a cap on allocations if the cap is reasonably expected to apply in most years, (2) an allocation for one or more years if the service provider’s income share is reasonably certain, (3) an allocation of gross income, (4) an allocation that is either (A) fixed in amount, (B) reasonably determinable, or (C) designed to assure that sufficient net profits are highly likely to be available for the service provider (such as a profit share for a specific transaction or accounting period that is not tied to the long-term success of the enterprise) or (5) a fee waiver that is either (A) non-binding or (B) is not disclosed timely to the partnership and its partners. By way of an example discussing the grant of a partnership interest to an investment manager in lieu of a management fee, the proposed regulations indicate that an irrevocable fee waiver made and disclosed to the investment fund’s limited partners at least 60 days prior to the start of the period for which the management fee would otherwise have been payable does not cause the partnership interest to lack “significant entrepreneurial risk.”

Although purportedly intended to address fee waivers in the investment fund context, the scope of the proposed regulations is not so limited and may affect tax planning for carried interests in partnerships engaged in real estate and other active businesses. As shown in the included examples, the proposed regulations conclude that “significant entrepreneurial risk” exists when a carried interest’s participation in partnership allocations and distributions is tied to and limited by the partnership’s overall lifetime profitability (combined with a corresponding “clawback” obligation). However, the proposed regulations fail to give any negative guidance on when a carried interest lacks “significant entrepreneurial risk.” So, when deciding to accept a carried or other partnership interest, service providers should consider carefully the extent to which any deviation from the terms of the example partnership interests increases the probability that the partnership interest will be found to lack “significant entrepreneurial” risk” (e.g., by omitting the lifetime profit limitation and/or any clawback obligation).

The proposed regulations are intended to apply only to partnership arrangements entered into or modified after the date on which the regulations are issued in final form. However, the IRS views the proposed regulations as a clarification of existing law, hinting that it may seek to apply the principles set forth in the proposed regulations to pre-existing partnership arrangements.

For more information, please contact Andrew Lustigman, Partner with Olshan Frome Wolosky LLP, a law firm based in New York: http://www.laworld.com/laworldmembers/view_company/83 

Email: alustigman@olshanlaw.com  

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Upcoming Events

LAWorld Annual Conference (Cape Town) from 5pm on Tuesday the 5th of April, 2016 to 2pm on Friday the 8th of April, 2016

Europe/Middle East Regional Meeting and Lawyers Next Generation (Bratislava) from 5pm on Friday the 5th of February, 2016 to 5pm on Saturday the 6th of February, 2016

North and South America Regional Meeting (Miami) from 6pm on Wednesday the 11th of November, 2015 to 2pm on Friday the 13th of November, 2015

Europe/Middle East Regional Meeting and Lawyers Next Generation (Milan) from 5pm on Friday the 18th of September, 2015 to 5pm on Saturday the 19th of September, 2015

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