Labyrinth Lord combat sequence variant

In my hopefully coming-soon Labyrinth Lord game I'm planning on using a simplified weapon damage system, whereby all one-handed weapons deal 1d6 damage and all two-handed weapons deal 1d8 damage. This gives characters the choice of whether to use a shield and gain extra AC or to use a two-handed weapon and gain extra damage. One additional point I had in mind to differentiate weapons was that weapons with a longer reach would get to attack first (a goblin with a spear vs a Magic-User with a dagger, for example). I think that's a pretty nice idea, but the only trouble with it is the way the standard combat sequence works - one side resolves all its actions, before the other side resolves its.

So I've been thinking about a variant system, which would enable long-reach weapons to get the advantage. Here's the sequence I've come up with:

1. General intentions are declared - spells to be cast, weapons used to attack, other actions. Labyrinth Lord rolls morale, if applicable.
2. Each side rolls 1d6 for initiative, ties are re-rolled.
3. The side with initiative moves.
4. Attacks and actions are resolved in order of weapon reach, with initiative resolving equal reach. *
5. The side which lost initiative moves.

* This means that generally missile attacks (including ranged spells) go first as they have the longest reach, followed by melee attacks and finally unarmed attacks and touch spells. However in the situation where someone making a ranged attack is being attacked in melee, the melee attack would be resolved first (because at hand-to-hand range the missile weapon effectively has no reach).

One thing I really like about this system is that it makes it so that even with initiative, running up to attack someone who's brandishing a polearm when you've only got a shortsword is a dangerous business!

Can anyone see any flaws though? When toying with fundamental systems like this I'm always concerned I might be breaking something important without realising!