Law practice management
- 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:
- false;
- misleading or deceptive or likely to mislead or deceive;
- offensive; or
- prohibited by law.
- 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.
Commentary
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, while advertising personal injury legal services is further restricted by the Personal Injuries Proceedings Act 2002 (Qld).
36.1 False or offensive advertising
The Australian Consumer Law ('ACL') applies to 'any business or professional activity': Competition and Consumer Act 2010 (Cth) s 2; Fair Trading Act 1999 (Qld) s 16 applies ACL in Queensland.
The ACL provisions relevant to lawyer advertising include:
- Misleading and deceptive conduct: ACL 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: Part 2-2, and
- Unfair terms: ss 23-28
Solicitors should consult the Legal Services Commission’s Regulatory Guide The Application of the Australian Consumer Law to Lawyers.
36.1.4 Personal injury advertising. There are restrictions on personal injury advertising for lawyers in Personal Injuries Proceedings Act 2002 (Qld) ss 63-69 ('PIPA'). 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: PIPA s 64.
Advertising is allowed in printed publications such as newspapers, magazines, directories and flyers, as well as billboards, signs and the internet: s 65. 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 (e.g. 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: s 66(1). Additional statements are permitted on a law practice's own website: 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: s 66(2). 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 (PIPA s 67), as are referral fees (s 68).
The Legal Services Commission monitors and enforces the provisions of PIPA, and a complaint about breach of PIPA can therefore be taken to the Commission. Solicitors should consult the Commission’s Regulatory Guides Advertising Personal Injury Services, Advertising Personal Injury Services on the Internet and Advertising Personal Injury Services on Internet Search Engines and Non-Lawyer Websites.
36.2 Accredited specialist
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 Queensland Law Society and the Law Society of South Australia have schemes of specialist accreditation, and the specialists are entitled to promote themselves as such through different forms of advertising. The QLS Accredited Specialist Marketing Guidelines deals with 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.
- A solicitor with designated responsibility for a matter must exercise reasonable supervision over solicitors and all other employees engaged in the provision of the legal services for that matter.
Commentary
37.1 Introduction
'Reasonable supervision' is not defined in the ASCR. Guidance from a risk management and professional standards perspective is offered in the Queensland Law Society's Guide to appropriate management systems. A lack of supervision that may amount to professional misconduct or unsatisfactory professional conduct may occur where:
- the lawyer is aware, or ought reasonably to be aware, of factors that may suggest to a reasonable person that greater supervision is required: Bridges v Law Society of New South Wales [1983] 2 NSWLR 361;
- 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: Re Mayes [1974] 1 NSWLR 19;
- a solicitor simply accepts assurances from staff that everything is in order: Council of the Queensland Law Society Inc v Cummings [2004] QCA 138, in which the solicitor, 'foolishly accepted' assurances that his conveyancing section was adequately dealing with the trust accounts. The acceptance of those assurances is not an immunisation from professional responsibility: Law Society of New South Wales v McNamara (1980) 47 NSWLR 72;
- in Cheney v Queensland Law Society Incorporated [2001] QSC 338, the solicitor's trust account had been overdrawn, trust money was paid into the office account without authority, and money credited to one client was appropriated to another. 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 Law Society suspended the solicitor's practising certificate, but the solicitor appealed. Chesterman J believed that the solicitor might not be entitled to a practising certificate as a principal, but could hold one on condition she only work as an employed solicitor (where she would not be responsible for trust moneys). This would ensure that the public remained protected, while the solicitor could still earn an income. However, he agreed with the Law Society that even a conditional practising certificate should not be issued while the shortfall in the trust account was not reimbursed. 'To allow her to practice [sic], even as an employee, without her having made good the losses suffered by her clients by reason of her lack of responsibility would … "send the wrong signal" to the community and the profession.' Reimbursement was said to be forthcoming, but had not happened more than three months after the hearing. At that point, Chesterman J upheld the suspension and dismissed the appeal.
Consequences. In addition to disciplinary action, solicitors may be vicariously liability for the employees' actions. In Lloyd v Grace Smith & Co [1912] AC 716, 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 (1986) 160 CLR 251, 276.88 Refer to Rule 5.
88 The principles have recently been applied in Crouch and Lyndon (a Firm) v IPG Finance Australia Pty Ltd & Anor [2013] QCA 220.
38.1. A solicitor who is a former judicial officer must not appear in:
38.1.1. any court if the solicitor has been a member thereof a presided therein; or
38.1.2. any court from which appeals to any court of which the solicitor was formerly a member may be made or brought,
for a period of two years after ceasing to hold that office unless permitted by the relevant court.
Commentary
QCAT Practice Direction No. 2 of 2013 allows 'QCAT sessional members and adjudicators who are lawyers to nominate a list or lists within QCAT in which they will not sit.' 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.
- Where a solicitor or law practice:
39.1.1. shares an office with or is otherwise affiliated with an 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, 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.
Commentary
39.1 Clarity on services provided
Rule 39 is designed to protect consumers and to manage conflicting duties and interests. It demands that the solicitor clarify for the client which entities on the premises or otherwise affiliated with, are providing what services, including non-legal services.89 This is in addition to LPA s 152, 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 LPA applies to the provision of legal services but not to the provision of the 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 even if it had undertaken not to disclose it.
89 It is therefore broader than the former Legal Profession (Solicitors) Rules 2007 (Qld) r 35.
- 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:
- any disqualified person; or
- 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.
Commentary
Sharing receipts
Until Rule 40 was introduced, solicitors in unincorporated practices were prohibited from sharing receipts from their practice with unqualified persons – i.e., anyone who was not a solicitor. 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': Adamson v Queensland Law Society [1990] 1 Qd R 498. In Legal Services Commissioner v McClelland [2006] LPT 1390, 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 $1500 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.
40.1 Incorporated legal practices. Rule 40 represents a significant departure from the rules formerly applicable to law practices that were not incorporated legal practices (ILPs). Since the LPA came into force, ILPs have had no restriction on the identity of shareholders of the practice. In effect, this means that the 'receipts' of ILPs have been able to be shared with those who were not qualified solicitors. However, the LPA continues to prohibit the sharing of receipts from the ILP with a disqualified person: LPA s 129.
40.1.1 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 LPA Sch 2 as, in summary, a person:
- whose name has been removed from an Australian Roll 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 (see also LPA ss 133 and 158).
40.1.2 Indictable offence. An 'indictable offence 'is defined in the Criminal Code s 3, and 'offences that involved dishonest conduct' outlined in the Criminal Code s 581 and LPA Sch 2. Convictions for LPA offences include those not recorded on sentence, the acceptance of a guilty plea and a finding of guilt: LPA s11.
90 On the former Queensland Law Society Rules 1987 Rule 78.
Omitted.
- A solicitor must not in the course of, or in connection with, legal practice or their profession, engage in conduct which constitutes:
- discrimination;
- sexual harassment;
- any other form of harassment; or
- workplace bullying.
Commentary
42.1.1 Discrimination
Rule 42 makes an alleged breach of federal or State anti-discrimination law the possible subject of a complaint to the Legal Services Commissioner. The definition of 'discrimination' in the ASCR glossary indicates that it is discrimination that is unlawful under federal or state legislation that amounts to a breach of this Rule.
Federal laws. Australia has enacted a number of laws, administered by the Australian Human Rights Commission, which meet obligations under international treaties:
- Age Discrimination Act 2004 (Cth)
- Australian Human Rights Commission Act 1986 (Cth)
- Disability Discrimination Act 1992 (Cth)
- Racial Discrimination Act 1975 (Cth)
- Sex Discrimination Act 1984 (Cth)
State laws. The Anti-Discrimination Act 1991 (Qld) and the Equal Opportunity Act 1984 (SA) are each much broader in scope than the federal legislation. The Queensland Act prohibits discrimination, sexual harassment, vilification and victimisation on the basis of sex, relationship status, pregnancy, parental status, breastfeeding (goods and services only), race, age, physical impairment, religion, political belief or activity, trade union activity, lawful sexual activity, gender identity, sexuality, family responsibilities, or association with a person who has any of these attributes.
The South Australian Act similarly prohibits discrimination on the basis of sex, sexuality, marital status, pregnancy, race, age, physical and intellectual impairment, mental illness, association with a child, chosen gender, caring responsibilities, religious dress (in work or study), and spouse or partner's identity.
42.1.2 Sexual harassment
Sexual harassment of any individual in the course of legal practice may constitute professional misconduct or unsatisfactory professional conduct, as well as breach federal and State laws. The mental health of the practitioner is not a defence to the conduct charge: see also Rule 5. The Council of the Law Society of New South Wales v Flynn [2013] NSWADT 70 involved sixteen separate allegations of professional misconduct or unsatisfactory professional misconduct, including ones of the solicitor harassing a female client with more than thirty phone calls or text messages over a period of six hours, and inviting the client to dinner wearing 'something sexy.' The lawyer conceded that the conduct was 'completely inappropriate and unacceptable', admitted his embarrassment and cited mental health problems affecting him at the time. The Tribunal found the conduct amounted to professional misconduct.
42.1.3 Workplace bullying
The Glossary defines 'workplace bullying' as:91
bullying that is unlawful under the applicable state or territory anti-discrimination or human rights 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. It includes behaviour that could be expected to intimidate, offend, degrade or humiliate.
91 Refer to Fair Work Act 2009 (Cth).
- Subject only to their duty to the client, a solicitor must be timely, open and frank in their dealings with a regulatory authority.
- Omitted
Commentary
43.1 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': Johns v Law Society of New South Wales [1982] 2 NSWLR 1.92 The duty has received explicit approval from the Queensland Court of Appeal (Council of the Law Society of Queensland v Whitman (2003) QCA 438), though not yet from the High Court. Its purpose is to protect the public and the proper administration of justice.
Disciplinary proceedings against a solicitor are sui generis: Weaver v Law Society of New South Wales (1979) 25 ALR 359.93 As observed in Re Veron; ex parte Law Society of New South Wales (1966) 84 WN (Pt 1) (NSW) 136:
"From the earliest times …, disciplinary proceedings … have always been conducted upon affidavit evidence and not otherwise. 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" (at 141).
92 See also: Malfanti v Legal Profession Disciplinary Tribunal [1993] 1 LPDR 17, 19.
93 See also: Martin v Medical Complaints Tribunal [2006] TASSC 73 [21].