No.16 Supervision

1. Introduction

1.1. Who should read this Guidance Statement?

This Guidance Statement is for solicitors and law practices.

1.2. What is the issue?

The purpose of this Guidance Statement is to outline what is considered to be ‘reasonable supervision’ under the Australian Solicitors Conduct Rules 2012 (‘ASCR’) and the common law.

This Guidance Statement is not generally concerned with the ‘supervised legal practice’ requirements applying to practitioners with restricted practising certificates, although some of the topics addressed do refer to practitioners in this category.

1.3. Status of this Guidance Statement

This Guidance Statement is issued by the Queensland Law Society (‘QLS’) Ethics and Practice Centre for the use and benefit of solicitors.

This Guidance Statement does not have any legislative or statutory effect. By having regard to the content of this Guidance Statement it may be easier for you to account for your actions if a complaint is later made to the Legal Services Commission.

This Guidance Statement is not legal advice, nor will it necessarily provide a defence to complaints of unsatisfactory professional conduct or professional misconduct. 

This Guidance Statement represents a standard of good practice and is endorsed by the QLS Ethics Committee.

2. Ethical principles

ASCR   

Rule 37 provides:

This Rule imposes a professional obligation not only upon the principals of a legal practice but also on the solicitor within that legal practice who has designated responsibility for a matter.

3. What is ‘reasonable supervision’?

3.1. The basics

What constitutes reasonable supervision depends upon the particular facts of each situation – the matter itself, the ability and experience of the supervised solicitor and the type and complexity of the work involved. 

 The following is unlikely to constitute reasonable supervision:

• to simply leave the person who is being supervised to his or her own devices;
• to not have in place a system or practice involving the regular review of the matters^[1] conducted by the person being supervised. Solely relying on that person to bring any difficulties to the attention of their supervisor is not sufficient – the supervising solicitor must be proactive in their supervision;
• to delegate the entire conduct of the matter; or
• simply tell the person being supervised that you have an ‘open door policy’ if they have any queries. 

A failure to take proactive steps to check and supervise could result in disciplinary charges being levied against the supervisor.^[2]

3.2. Too many staff to supervise?

Care should be taken when solicitors take on the supervision of too many staff, even where they have devolved this supervision to other senior solicitors who report to them. A supervisor needs to be in a position where they can direct, provide oversight, have the ability to give instructions, assign tasks, override and intervene when necessary. 

3.3. Remote supervision

Remote or hybrid working is now common. Where the solicitor with primary responsibility for supervision is not based in the same physical location as the person being supervised, remote supervision is possible. 

Available technology has the capacity to facilitate such regular and direct supervision of remote practitioners. Similar considerations apply to lawyers working full-time or part-time from home or those who are assigned to a satellite office. 

However, care should be taken in this situation to establish proper systems for supervision^[3] particularly with regard to those practitioners who are on a restricted practising certificate. These systems will depend on the nature of the practice, the type of work and the experience of the practitioner to be supervised. Ideally such systems would involve some form of regular face-to-face in person contact as well. 

3.4. Client secondments

The secondment of solicitors to client organisations is now a well-established practice which can be beneficial to both the client, the firm and the individual solicitor. However, these arrangements can take many forms. 

The terms of the client secondment will determine whether a solicitor on secondment is providing advice on behalf of their firm or is instead being provided to work solely under the client’s supervision. 

The former requires careful attention as to the proper supervisory arrangements, especially in the case of less experienced practitioners who will be working on-site with clients who are likely to expect the seconded solicitor to provide advice on the spot, rather than through the normal supervisory channels which exist in law firms. 

The latter arrangement, where the solicitor is entirely under supervision of the client, even if it does not involve the provision of legal services by the solicitor’s firm, may give rise to other regulatory issues for the law firm, the solicitor and the client.^[4] 

The above considerations are particularly relevant to firms which operate on a ‘secondment-only’ basis. These firms must still maintain proper supervisory arrangements where legal services are being provided, even if the employees on secondment are experienced. The principal / employee ratio within the firm will be a relevant consideration here in determining whether the supervision arrangements are appropriate.

Whether a secondment is full-time or part-time will also be relevant to whether proper supervision is achievable. Considerations such as whether the secondee is part of an in-house legal team, as opposed to working by themselves at the client’s premises, will also be relevant. 

In general, a solicitor who holds a restricted practising certificate should not be regarded as a suitable candidate for a client secondment, unless they are accompanied on that secondment by a competent unrestricted practising certificate holder from the seconding firm who has, as at least part of their duty, the supervision of the restricted practitioner. 

Supervision of a restricted practising certificate holder on secondment by a member of the client’s legal team also has the potential to give rise to conflicts of interest for both parties and should be avoided for that reason as well.

3.5. Incorporated Legal Practices (‘ILPs’)

Legal Practitioner Directors of ILPs have imposed upon them a statutory duty^[5] to be responsible for the management of legal services provided by the ILP and to ensure that appropriate management systems^[6] are implemented and kept. 

This includes the duty of reasonable supervision. Legal Practitioner Directors must take all reasonable action^[7] to ensure a breach of the professional obligations of an Australian Legal Practitioner does not happen.

3.6. In-house & government

The appropriate level of supervision within an in-house legal team (including within a government legal department) will in part depend on the respective roles and responsibilities of the lawyers involved within the organisation in question, including their position descriptions, internal policies and lawful employer directions. 

Practitioners in these roles may also need to consult position descriptions and internal policies to help them ascertain whether they are engaging in legal practice.^[8]

3.7. Supervised principals

A practitioner who holds a restricted principal practising certificate may practise as a partner of a law firm, as one of at least two directors of an incorporated legal practice or as one of at least two legal practitioner partners of a Multi-disciplinary Practice (‘MDP’), provided that they do so under the supervision of a person holding an unrestricted principal practising certificate.^[9]  They may not practise as a sole practitioner, nor can they supervise an office of a law practice.

3.8. Contractors

It is recommended that a contractor hold an unrestricted employee certificate as an ‘employee’^[10] of the law practice, be insured under the professional indemnity policy of the law practice and be properly supervised. Under such an arrangement, the contractor must not provide legal services to anyone other than that law practice’s clients.^[11] 

There may be practice structures or exceptional circumstances where it may be possible for the holder of a restricted practising certificate to be engaged as a contractor. A key consideration in this respect (along with the others raised below) will always be the extent to which that practitioner is capable of being properly supervised to the appropriate degree. The greater the degree of supervision in the relationship, the greater the chance that the contractor is not an independent contractor but an employee of the law practice. 

The Society is aware of solicitors holding restricted practising certificates being asked to enter into contracts for services instead of employment agreements to complete their required period of supervised legal practice. They are asked to obtain an ABN and are paid a lump sum for salary, tax and superannuation on the expectation that they will make their own arrangements in these respects. Apart from the workplace relations and taxation issues, there is a risk that such schemes may not allow for the proper supervision of the holder of such a certificate and are therefore to be approached with caution.

Practitioners should also note that there may be a range of other compliance issues which might impact any proposed contractor arrangement, including in relation to taxation, superannuation and labour hire regulation.

Where the contractor is not going to be supervised, the relationship is likely to be that of one law practice retaining another law practice, similar to the engagement of a barrister by a solicitor. The solicitor providing the services in this situation must therefore hold an unrestricted principal’s practising certificate and establish their own firm or practice. The Act provides how costs are to be disclosed to clients in this situation.^[12]

Practitioners should also be mindful of other regulatory matters (including under the LPA) that could require a proposed contractor to hold a principal level practising certificate on their own account, including the following non-exhaustive indicators:

• the contractor is to be engaged via a corporation that is required to be registered as an Incorporated Legal Practice and hold its own professional indemnity insurance
• the contractor will be engaging and supervising their own employees (or is entitled to do so)
• the contractor arrangement is non-exclusive (i.e. the contractor may provide services to multiple law practices)
• the contractor operates, or is required to operate, their own trust account
• the contractor is entitled to set their own work hours and schedule.

Practitioners with Lexon coverage should also consider the potential application of the Unauthorised Providers exclusion under the Lexon Master Policy that may exclude coverage in certain instances.  Lexon has published an Unauthorised Providers information sheet, available from Lexon’s website here.

4. More Information

Solicitors are also referred to the Queensland Law Society, The Australian Solicitors Conduct Rules 2012 in Practice: A Commentary for Australian Legal Practitioners, Queensland Law Society (2014).

For further assistance, including difficulties you may be experiencing as either a supervisor or as a practitioner who is being supervised, please contact an Ethics Solicitor in the QLS Ethics and Practice Centre on 07 3842 5843 or ethics@qls.com.au or a QLS Senior Counsellor.^[13]

 Updated 8 June 2023

[1] For those who are insured with Lexon, also see the EMR Program (if you have opted in): <https://www.lexoninsurance.com.au/Managing_your_risk/EMR_Program>. 

[2] Council of the Queensland Law Society Inc v Cummings [2004] QCA 138; Legal Services Commissioner v Gould [2016] QCAT 533. 

[3] For example, see the following guidance from the NSW Law Society (noting, however, that NSW is governed by the Uniform Law): https://www.lawsociety.com.au/news-and-publications/news-media-releases/remote-supervision