Law practice management

This section contains Rules 36-43

36.1 A solicitor or principal of a law practice must ensure that any advertising, marketing, or promotion in connection with the solicitor or law practice is not:

36.1.1 false;

36.1.2 misleading or deceptive or likely to mislead or deceive;

36.1.3 offensive; or

36.1.4 prohibited by law.

36.2 A solicitor must not convey a false, misleading or deceptive impression of specialist expertise and must not advertise or authorise advertising in a manner that uses the words ‘accredited specialist’ or a derivative of those words (including post-nominals), unless the solicitor is a specialist accredited by the relevant professional association.

False or offensive advertising

A solicitor may not advertise in a way that is false, likely to mislead or deceive, offensive, or prohibited by law, including in relation to a practice specialisation. Rule 36 is complemented by the Australian Consumer Law (‘ACL’), while advertising personal injury legal services is further restricted by the Personal Injuries Proceedings Act 2002 (Qld).

The ACL applies to ‘any business or professional activity’.⁵⁵⁷ The ACL provisions relevant to lawyer advertising include:

Misleading and deceptive conduct: s 18.
False or misleading representations about services: s 29.
Misleading conduct as to the nature etc. of services: s 34.
Consumer guarantees: ss 60-62.
Component pricing: s 48.
Unconscionable conduct: pt 2-2, ss 20-22.
Unfair terms: ss 23-28.

Practitioners should also be aware of direct marketing legislation such as the Spam Act 2003 (Cth) and, where applicable, the Australian Privacy Principles under the Privacy Act 1988 (Cth).

Personal injury advertising

There are restrictions on personal injury advertising for lawyers in the Personal Injuries Proceedings Act 2002 (Qld) (‘PIPA’).⁵⁵⁸ Advertising of personal injury services takes place if a person causes to be published a statement likely to encourage or induce a person:

to make a claim for compensation or damages for a personal injury, or
to use the services of a named law practice for that claim.⁵⁵⁹

Advertising is allowed in printed publications such as newspapers, magazines, directories and flyers, billboards, signs, and on the internet.⁵⁶⁰ It is not allowable on radio; television; recorded telephone messages; or by the public exhibition of photographs, films or other recordings of images or sound (for example, cinema advertising).

The content of personal injuries advertisements is restricted to the name and contact details of the law practice and their areas of practice.⁵⁶¹ Additional statements are permitted on a law practice’s own website. For example, statements on the operation of personal injuries law, a person’s legal rights under that law, and the conditions under which a law practice is prepared to provide personal injury services.⁵⁶² Accordingly, advertising personal injuries services on a ‘no win, no fee’ or other speculative basis is permitted only on the firm’s own website.

Touting at the scene of an incident where a person allegedly suffered personal injury, or afterwards at a hospital, or at any time is prohibited and is a criminal offence,⁵⁶³ as is the payment or receipt of referral fees.⁵⁶⁴

The Legal Services Commission monitors and enforces the provisions of PIPA, and a complaint about breach of PIPA can be taken to the Commission. Solicitors should consult the Commission’s website on restrictions around claim farming and advertising of personal injuries services.

Accredited specialist

The description ‘specialist’ in this context means more than someone who only or mostly works in a particular area of law. It implies a level of expertise or recognition of skill in that area.

Accredited specialists are lawyers recognised by a relevant professional body as having specialist expertise in a particular area of law. The term is not defined in the ASCR. The QLS has schemes of specialist accreditation and those specialists are entitled to promote themselves through different forms of advertising. The QLS provides marketing guidelines for accredited specialists on its website, including guidelines on the correct usage of the logo and post-nominals on promotional materials. Accreditations attach to the practitioner with the specialisation, not the law practice, so logos must not be placed in close proximity to the name of the practice or a legal practitioner without accreditation. In Victorian Legal Services Commissioner v Stewart (Review and Regulation),⁵⁶⁵ the Tribunal ordered the practitioner to remove advertisements relating to her being a ‘specialist’ as she did not hold specialist accreditation.

If the solicitor is claiming to be a ‘specialist’ or even to ‘specialise’ in an area of law for which no QLS accreditation is available, or which does not clearly fall within such an area, the rule does not prohibit this, provided that the description does ‘not convey a false, misleading or deceptive impression of specialist expertise’.

To avoid confusion, however, it is not recommended that solicitors use the terms ‘specialist’ or ‘specialise’ unless the solicitor is a QLS accredited specialist.

It should also be remembered that the requirement not to engage in conduct which false, misleading or deceptive applies regardless of the description used.

557. Competition and Consumer Act 2010 (Cth) sch 2 s 2 (‘Australian Consumer Law’). The Fair Trading Act 1999 (Qld) s 16 applies the Australian Consumer Law in Queensland.
558. Personal Injuries Proceedings Act 2002 (Qld) ss 63-69.
559. Ibid s 64.
560. Ibid s 65.
561. Ibid s 66(1).
562. Ibid s 66(2).
563. Ibid s 67.
564. Ibid s 68.
565. [2022] VCAT 806.

Designated responsibility

‘Designated responsibility’ is defined in the Glossary to mean the solicitor ultimately responsible for a client’s matter or the solicitor responsible for supervising the solicitor that has carriage of a client’s matter. As a result, if supervision is by way of another employee solicitor, even a senior solicitor, the supervision by that solicitor must ultimately lie with the principal.⁵⁶⁶

Reasonable supervision

‘Reasonable supervision’ is not defined in the ASCR. Guidance from a risk management and professional standards perspective is provided on the QLS website.⁵⁶⁷

The following list provides case examples of where a lack of supervision may amount to professional misconduct or unsatisfactory professional:

In Bridges v Law Society of New South Wales, the solicitor was aware, or ought to have been reasonably aware, of factors that may suggest to a reasonable person that greater supervision is required.⁵⁶⁸
In Re Mayes, the solicitor failed to discharge his personal obligations with respect to the operation of his firm’s trust account and to discover his partner’s misappropriation of trust funds.⁵⁶⁹
In Law Society of New South Wales v McNamara, a solicitor ‘foolishly accepted’ assurances that their conveyancing section was adequately dealing with the trust accounts. The acceptance of those assurances is not an immunisation from professional responsibility.⁵⁷⁰
In Cheney v Queensland Law Society Incorporated, the solicitor’s trust account had been overdrawn, trust money was paid into the office account without authority, money credited to one client was appropriated to another and there was also a shortfall in the trust account of $9,399.50. All of this was attributable to the solicitor’s husband, who had the daily responsibility for maintaining the trust account and who had mismanaged it and had stolen moneys. The solicitor had a suspicion that her husband was not keeping the accounts scrupulously but was not aware of his dishonesty. The Court upheld the Law Society’s suspension of the solicitor’s practising certificate.⁵⁷¹

Queensland solicitors should refer to Guidance Statement No. 16 – Supervision.

All staff

In addition to disciplinary action, solicitors may be vicariously liability for their employees’ actions. In Lloyd v Grace Smith & Co,⁵⁷² a firm of solicitors was held vicariously liable to a client defrauded by the firm’s managing clerk, who was acting within the scope of his authority by transacting conveyances on behalf of clients. It was irrelevant that the fraud was perpetrated for the clerk’s benefit. These principles were applied by Brennan J in National Commercial Banking Corp of Australia Ltd v Batty.⁵⁷³

In Legal Services Commissioner v Mould, it was noted that:

[p]rincipal legal practitioners responsible for the management of their legal practice must ensure adequate supervision of their administrative personnel and operations, and the adoption of procedures with appropriate procedural safeguards to prevent the improper charging of clients or maintenance of proceedings.⁵⁷⁴

566. Legal Services Commissioner v Gould [2016] QCAT 533.
567. Queensland Law Society, Appropriate Management Systems Framework (Guide, March 2024).
568. Bridges v Law Society of New South Wales [1983] 2 NSWLR 361.
569. Re Mayes [1974] 1 NSWLR 19.
570. Law Society of New South Wales v McNamara (1980) 47 NSWLR 72. See also Council of the Queensland Law Society Inc v Cummings [2004] QCA 138.
571. Cheney v Queensland Law Society Incorporated [2001] QSC 338.
572. [1912] AC 716.
573. (1986) 160 CLR 251, 276. See also Crouch and Lyndon (a Firm) v IPG Finance Australia Pty Ltd & Anor [2013] QCA 220.
574. Legal Services Commissioner v Mould [2015] QCAT 440, [122].

Judicial officers

This rule makes it clear that within the two-year period whether the solicitor may appear is a matter for the relevant court. It should also be noted that whether a solicitor may appear at all is ultimately a matter for the court in any event, as even after the two-year period ends the rule does not entitle the solicitor to appear in any court.

The term ‘court’ has an expended meaning and extends to tribunals and other bodies, including elsewhere in Australia (see the Glossary).

The QCAT Practice Direction No. 2 of 2013 allows ‘QCAT’s sessional members and adjudicators who are lawyers to nominate a list or lists within QCAT in which they will not sit’.⁵⁷⁵ The practice direction is designed to prevent the risk of embarrassment and the appearance of conflicting duties and interests, or the appearance of bias to the lawyers involved.

575. Queensland Civil and Administrative Tribunal, Practice Direction No 2 of 2013: Allocating Legal Members to Lists in QCAT, 15 March 2013, [2].

39.1 Where a solicitor or law practice:

39.1.1 shares an office with or is otherwise affiliated with an any other entity or business engaged in another calling to provide services other than legal services to a client, and

39.1.2 a client is receiving services concurrently from both the law practice and the other entity,

the solicitor, or law practice, as the case requires, (as the case requires) must take all reasonable steps to ensure that the client is clearly informed about the nature and the terms of the services being provided to the client by the solicitor or law practice, including (if applicable) that the services provided by the other entity are not provided by solicitor or the law practice as legal services.

Clarity on services provided

Rule 39 is designed to protect consumers and to manage conflicting duties and interests. It requires a solicitor to explain to a client which of the entities on the same premises provide what services, including non-legal services.⁵⁷⁶ This is in addition to the obligation under s 152 of the Legal Profession Act, which calls for the legal practice to advise the client:

the services to be provided,
whether the services will be provided by an Australian legal practitioner, and
if not, the status or qualifications of the persons who will provide the services.

The solicitor must also advise the client that the Legal Profession Act applies to the provision of legal services but not to the provision of non-legal services.

In addition, the solicitor must ensure that the arrangement does not compromise other duties to the client, such as confidentiality. Information must be secure. There is no exception in rule 9 that would permit another entity sharing premises to access confidential information without the permission of the client even if it had undertaken not to disclose it.

Amendment to Rule 39

Rule 39 was amended as from 27 September 2024 to extend the scope of the rule set out in rule 39.1.1 to any entity or business that not only shares an office but also to any affiliated entity or business of the solicitor or law practice.

The Glossary was also amended to include a definition of ‘office’ as follows: ‘Office … is not limited to physical business premises and includes the media through which a law practice provides legal services to clients away from a central, physical location’.⁵⁷⁷

576. It is therefore broader than the former Legal Profession (Solicitors) Rules 2007 (Qld) r 35.
577. Law Council of Australia 2024 Commentary (n 1) 131.

40.1 A solicitor must not, in relation to the conduct of the solicitor’s practice, or the delivery of legal services, share, or enter into any arrangement for the sharing of, the receipts arising from, or in connection with, the provision of legal services by the solicitor, with:

40.1.1 any disqualified person; or

40.1.2 any person:

who has been found guilty of an indictable offence; or
who has had a guilty plea accepted in relation to an indictable offence that involved dishonest conduct, whether or not a conviction was recorded.

Sharing receipts

Until rule 40 was introduced, solicitors in unincorporated practices were prohibited from sharing receipts from their practice with unqualified persons. The restriction is now only on sharing receipts with disqualified and certain convicted persons. It is possible now for solicitors who are principals of unincorporated practices to share receipts with legally unqualified persons (other than those disqualified or convicted of a defined offence).

The rationale for the former rule was that profit sharing arrangements amounted to ‘the de facto conduct of legal practices by unqualified persons’.⁵⁷⁸ In Legal Services Commissioner v McClelland,⁵⁷⁹ the solicitor arranged with an unqualified conveyancer to divide the work and fee charged for each transaction. The conveyancer would be paid $1,000 for her work with the remaining $1,500 disbursed to the solicitor. The arrangement, ‘crafted with some care to avoid a perception of sharing’, was found to constitute illegal conveyancing and generated uncertainty about the identity of the purchaser’s solicitor at different stages of the conveyance. The solicitor had his practising certificate suspended for four months, was publicly reprimanded, and was ordered to pay the costs of the proceedings. It would appear that, as a result of the introduction of rule 40, McClelland does not represent a professional standard applicable to solicitors governed by the ASCR.

Incorporated legal practices

Rule 40 represents a significant departure from the rules formerly applicable to law practices that were not incorporated legal practices. Since the Legal Profession Act came into force, incorporated legal practices have had no restriction on the identity of shareholders of the practice. In effect, this means that the ‘receipts’ of incorporated legal practices have been able to be shared with those who were not qualified solicitors. However, the Legal Profession Act continues to prohibit the sharing of receipts from the incorporated legal practice with a disqualified person.⁵⁸⁰

Disqualified persons

The rule prohibits the sharing of receipts with people who had been involved in the practice of law, but who have had that involvement curtailed in some way. A disqualified person is defined in Legal Profession Act sch 2 as, in summary, a person:

whose name has been removed from a roll in Australia and who has not been admitted to the legal profession,
whose Australian practising certificate has been suspended or cancelled,
who has been refused a renewal of an Australian practising certificate,
who is the subject of an order prohibiting the person from managing or being a partner in a legal practice or prohibiting a law practice from employing the person.⁵⁸¹

Indictable offence

An ‘indictable offence’ and offences of dishonesty are defined in ss 3 and 581 of the Criminal Code Act 1899 (Qld) respectively. There is also a reference to ‘indicatable offence’ under the definition of ‘serious offence’ in schedule 2 to the Legal Profession Act. Convictions for Legal Profession Act offences include those not recorded on sentence, the acceptance of a guilty plea and a finding of guilt.⁵⁸²

Amendment to Rule 40

Rule 40.1.12 was amended to ensure that the scope of the rule encompasses both a formal finding of guilt for an indictable offence and the acceptance of a guilty plea, whether or not a conviction for an indictable offence was recorded.⁵⁸³

578. Adamson v Queensland Law Society [1990] 1 Qd R 498.
579. [2006] LPT 13, [21] (regarding the Queensland Law Society Rules 1987 r 78).
580. Legal Profession Act (n 5) s 129.
581. See also Legal Profession Act (n 5) ss 133, 158.
582. Ibid s 11.
583. Ibid; Law Council of Australia 2024 Commentary (n 1) 132–3.

Rule 41 was omitted from the Rules with effect from 27 September 2024

The former rule provided that:

[a] solicitor must not conduct a managed investment scheme or engage in mortgage financing as part of their law practice, except under a scheme administered by the relevant professional association and where no claim may be made against a fidelity fund.

Legal practitioners cannot conduct a managed investment scheme in an incorporated legal practice.⁵⁸⁴ Money ‘entrusted to or held by a law practice for a managed investment scheme, or mortgage financing, undertaken by the practice is not trust money under this Act’.⁵⁸⁵ Solicitors must advise the clients of that fact.⁵⁸⁶ The fidelity fund does not provide compensation for defaults in relation to a managed investment scheme or mortgage financing undertaken by a law practice.⁵⁸⁷ This type of lending is regulated by the Australian Investments and Securities Commission under the Corporations Act 2001 (Cth).

584. Legal Profession Act (n 5) s 112.
585. Ibid s 238(2)-(3).
586. Ibid s 294.
587. Ibid s 373.

42.1 A solicitor must not in the course of, or in connection with, legal practice or their profession, engage in conduct which constitutes:

42.1.1 discrimination,

42.1.2 sexual harassment,

42.1.3 any other form of harassment, or

42.1.4 workplace bullying.

Amendment to Rule 42

The Law Council of Australia’s 2024 Commentary discusses amendments to rule 42:

Rule 42 was amended as from 27 September 2024 to:

clarify that Rule 42 applies to conduct that occurs in any setting connected to the practice of law or the legal profession;
ensure that professional disciplinary bodies can appropriately respond to matters concerning sexual harassment as either unsatisfactory professional conduct or professional misconduct; and
express the profession’s collective view that discrimination and harassment (and, in particular, sexual harassment) are unacceptable conduct when occurring in any situation connected to the practice of law.

In addition, the Glossary definition of ‘sexual harassment’ was amended from:

‘sexual harassment’ means harassment that is unlawful under the applicable state, territory or federal anti-discrimination or human rights legislation; to
‘sexual harassment’ means an unwelcome sexual advance, request for sexual favours, or otherwise engaging in other unwelcome conduct of a sexual nature to the person harassed in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated.⁵⁸⁸

The interaction of the statutory concepts of unsatisfactory professional misconduct and professional misconduct, and professional misconduct at common law was later explored in Council of the New South Wales Bar Association v EFA,⁵⁸⁹ in the context of what the Tribunal found to be ‘unwelcome conduct of a sexual nature’ which occurred at a dinner for barristers’ clerks. Practitioners should also refer to Legal Services Commissioner v Nguyen⁵⁹⁰ and Council of the New South Wales Bar Association v Waterstreet.⁵⁹¹

The terms ‘harassment’, ‘sexual harassment’ and ‘workplace bullying’ in the Rule are defined in the Glossary:

‘harassment’ means harassment that is unlawful under the applicable state, territory or federal anti-discrimination or human rights legislation.
‘sexual harassment’ means an unwelcome sexual advance, request for sexual favours, or otherwise engaging in other unwelcome conduct of a sexual nature to the person harassed in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated.
‘workplace bullying’ means bullying that is unlawful under the applicable state or territory anti-discrimination or human rights legislation or constitutes bullying at work under Commonwealth legislation. If no such legislative definition exists, it is conduct within the definition relied upon by the Australian Human Rights Commission to mean workplace bullying. In general terms, it includes the repeated less favourable treatment of a person by another or others in the workplace, which may be considered unreasonable and inappropriate workplace practice.

For Queensland practitioners, see Guidance Statement 21 – Sexual Harassment in the Workplace.⁵⁹²

588. Law Council of Australia 2024 Commentary (n 1) 135.
589. [2021] NSWCATOD 21.
590. [2015] QCAT 211.
591. [2024] NSWCATOD 47.
592. Queensland Law Society, Sexual Harassment in the Workplace (Guidance Statement No. 21, 20 December 2022).

Open and frank

Rule 43.1 reinforces the common law duty of a solicitor to inform and assist the disciplinary process where their ‘conduct is the subject of an inquiry whether by the court or the committee’.⁵⁹³ The duty has received explicit approval from the Queensland Court of Appeal,⁵⁹⁴ though not yet from the High Court. Its purpose is to protect the public and the proper administration of justice. The solicitor as an officer of the court has a duty to ensure that the enquiries from the regulatory body are responded to in a timely fashion and with openness and frankness.⁵⁹⁵

Disciplinary proceedings against a solicitor are sui generis or unique.⁵⁹⁶ As observed in Re Veron; ex parte Law Society of New South Wales:

They are not conducted as if the Law Society was a prosecutor in a criminal cause or as if we were engaged upon a trial of civil issues at nisi prius. The jurisdiction is a special one and it is not open to the respondent when called upon to show cause, as an officer of the Court, to lie by and engage in a battle of tactics, as was the case here, and to endeavour to meet the charges by mere argument.⁵⁹⁷

Solicitors should be aware of s 491 of the Legal Profession Act which enables the solicitor facing a disciplinary charge or complaint to disclose the client’s confidential information provided the client is the complainant or consents to the disclosure.⁵⁹⁸ Solicitors are reminded that failure to comply with the investigative entity requirements may be dealt with for professional misconduct.⁵⁹⁹

593. Johns v Law Society of New South Wales [1982] 2 NSWLR 1; Malfanti v Legal Profession Disciplinary Tribunal [1993] 1 LPDR 17, 19.
594. Council of the Law Society of Queensland v Whitman (2003) QCA 438.
595. See, eg, Legal Services Commissioner v Jazayeri [2024] QCAT 106 and Legal Services Commissioner v Bui [2018] QCAT 424 for consequences of non-compliance or failure to respond to notices issued pursuant to s 443 of the Legal Profession Act 2007 (Qld).
596. Weaver v Law Society of New South Wales (1979) 25 ALR 359; Martin v Medical Complaints Tribunal [2006] TASSC 73, [21].
597. (1966) 84 WN (Pt 1) (NSW) 136, [141].
598. See above for rule 9.2.2 commentary about the exception to the confidentiality rule where a solicitor is permitted or is compelled by law to disclose information.
599. Legal Profession Act (n 5) s 443.