Law Practice Structures
Practitioners would be aware that the Legal Profession Act 2007 (Qld) (the Act) came into effect on 1 July 2007 and resulted in major changes, including the option to structure a law practice as an incorporated legal practice (ILP) or multi-disciplinary partnership (MDP).
Prior to 2007, it was necessary for a practitioner who wanted to share the receipts of their practice with an unqualified person to obtain the Society’s approval under the now repealed rule 78 of the Queensland Law Society Rules 1987 (Qld). It is therefore not surprising that since the commencement of the Act, we have been asked by several practitioners to approve their law practice structure.
However, QLS role is now limited to receiving notifications that a law practice intends to engage in legal practice as an ILP, and that a legal practitioner intends to engage in legal practice as a partner in an MDP.
As has always been the case, we are unable to provide legal, tax, duty, financial or structuring advice to practitioners about their proposed business structure.
Certainly, there are several factors that need to be considered when making decisions about the most appropriate structure to suit your particular needs, and we urge you to seek independent advice to ensure that your proposed structure complies with the law.
For your information in this regard, the Act defines “law practice” as a law firm, an ILP, an MDP or an Australian legal practitioner who is a sole practitioner. “Law firm” is defined as comprising only Australian legal practitioners, or one or more Australian legal practitioners and one or more Australian-registered foreign lawyers. The meaning of the terms ILP and MDP are set out in s.111 and s.144 of the Act.
It is the Society's view that engaging in legal practice in a structure outside of the definitions contained in the Act is not permissible and may involve a breach of s.24 of the Act (Prohibition on engaging in legal practice when not entitled). Breach of s.24 has a number of consequences, including an inability to recover fees for anything done in contravention of the section and a liability to repay any fees already received.