40. Sharing receipts

    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:
      1. any disqualified person; or
      2. any person:
        1. who has been found guilty of an indictable offence; or
        2. 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.