A Principal’s responsibilities under the Uniform Law

In the last edition of Ethics and Standards Quarterly we highlighted the do’s and don’ts for graduates, and the requirements they need to meet before they practise law. A number of recent matters brought to the attention of the Professional Standards Department, where young lawyers have over-stepped the mark of what they can lawfully do, highlights the important role that Principals of law firms play in ensuring legal services are provided in accordance with the Uniform Law.

This article seeks to review the adequacy of current supports and regulatory controls, so that solicitors who become principals (or who already are principals) are effective, compliant and safe. The Law Society’s strategic plan has a focus on ensuring principals understand their responsibilities under the Legal Profession Uniform Law (NSW) (Uniform Law) and associated Rules, and can be found here:  2022-2025 Strategic Plan.pdf (lawsociety.com.au).

Liability of principals

Subsection 35(1) of the Uniform Law provides that if a “law practice” (a term defined under section 6 of the Uniform Law) contravenes any provision of the Uniform Law or Rules imposing an obligation on the law practice (whether by act or omission), a principal of the law practice is taken to have contravened the same provision if (a) the principal knowingly authorised or permitted the contravention; or (b) the principal was in, or ought reasonably to have been in, a position to influence the conduct of the law practice in relation to its contravention of the provision and failed to take reasonable steps to prevent the contravention by the law practice.

A contravention by a principal of subsection 35(1) is capable of constituting unsatisfactory professional conduct or professional misconduct (subsection 35(2) of the Uniform Law).

Reasonable supervision of legal services

Section 34 of the Uniform Law and imposes an obligation on each principal of a law practice to ensure reasonable steps are taken to ensure that all legal practitioner associates of the law practice comply with their obligations under the Uniform Law and the General Rules; and that legal services provided by the law practice are provided in accordance with the Uniform Law, the associated Rules and other professional obligations.

A failure by a principal to uphold the responsibilities set out in section 34 may amount to unsatisfactory professional conduct or professional misconduct under sections 296, 297 or 298 of the Uniform Law.

Rule 37 of the Legal Profession Uniform Law Australian Solicitors Conduct Rules (Conduct Rules) provides that 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. The rationale for a rule implying a positive obligation to supervise is that any problems will be identified and addressed early on and will be easier to rectify, rather than if there was no active supervision until much later on in the piece.

The term ‘reasonable steps’ that a principal is required to take to ensure compliance is not defined in section 34 of the Uniform Law. However, it is likely that when a law practice encourages excellent business practices and has efficient governance arrangements, it will have built in management systems that are protective in nature.

In order to comply with section 34 of the Uniform Law, it is reasonable to expect that principals of law practices will have strong compliance management systems in place, together with guidelines and tools appropriate to their particular practice.  However, managing and supervising the delivery of legal services, within a statutory framework (consisting of conduct and practice rules as well as other duties and obligations) has always been an essential part of providing legal services in NSW.

So what are some of the steps you should take when engaging young graduates?

Check your employees’ practicing certificate

It is recommended that all principals build a checklist into their recruitment process which includes a review of a potential legal practitioner’s practising certificate (back and front, so as to check each and every condition attached thereto) and a check on the Law Society’s Statutory Register via the “Register of Solicitors” on the website, to ensure the person they seek to employ is appropriately qualified.

Avoid advertisements or representations by, or about, unqualified entities

When employing a law graduate (that is, someone who has completed their law degree but who may not yet have completed their practical legal training or who may not yet have been entered on the Supreme Court Roll)^[1] it is important to adhere to section 11 of the Uniform Law, which prohibits advertisements or representations by or about unqualified entities. Specifically, section 11(2) provides that a director, partner, officer, employee or agent of an entity must not advertise or represent, or do anything that states or implies, that the entity is entitled to engage in legal practice, unless the entity is a qualified entity.

When referring to an individual who is unqualified, it means a person who has not been admitted to the legal profession and who does not hold a current Australian practising certificate.

Take care with the use of certain titles

Section 12 of the Uniform Law provides for the entitlement of certain persons to use certain titles.  Rule 9 of the General Rulesprovides a handy table of titles that are acceptable for legal practitioners in various circumstances.

Principals should take care when assigning a title to an employee, particularly using titles such as “Lawyer” or “Solicitor” for law graduates, or someone who has been admitted to the legal profession but is still waiting for their practising certificate to be issued by the Law Society.

Rule 9 of the General Rules provides that a person who is an “Australian lawyer” may take and use the title “Lawyer” in all circumstances.  An Australian lawyer is defined in section 6 of the Uniform Law as a person admitted to the Australian legal profession in NSW or any other jurisdiction.

A person should only refer to themself as a “Graduate Lawyer” if they have completed their law degree and been admitted to the Australian legal profession.  Adding “graduate” to the title does not change the requirements set out at section 12 of the Uniform Law.  A person who has completed their law degree and is (for example) undergoing practical legal training should more correctly refer to themselves as a “Law Graduate”.

A person who wishes to take and use the title “Solicitor” or “Counsel” must be an Australian legal practitioner within the meaning of the Uniform Law, that is an Australian lawyer who holds a current Australian practising certificate.

A lawyer who does not hold a current practising certificate is not entitled to call themselves and hold themselves out as a solicitor, even if they have been entered on the Supreme Court Roll.

The Legal Practice Matrix for common types of legal work you can do at each stage of your career

The Law Society has developed a handy Legal Practice Matrix to assist aspiring and practising solicitors understand the common types of legal work they can and cannot undertake at each stage of their career, depending on their legal qualifications and practising entitlements.  Principals should be familiar with this to ensure that they exercise reasonable supervision over legal work.

Clerical and administration work (as opposed to legal work)

If employing a paralegal or administration assistant, principals must ensure that such employees do not call themselves anything that may convey they are licensed to deliver a legal service or provide legal advice, unless they are appropriately licensed to do so. If such a person goes to Court, they must be trained to seek leave of the Court on every occasion.

The Regulatory Compliance team within the Law Society’s Professional Support Unit are often asked what tasks are considered “legal” in nature, as opposed to “clerical” or “administrative” tasks.  A good starting point for understanding the boundary of legal and non-legal work is case law, which has been helpfully summarised in the Law Society’s guidance on unqualified legal practice.  This resource provides a list of principles emerging from case law that are considered to fall squarely within the realm of providing legal advice and engaging in legal practice.

Anyone with questions or wanting support and guidance in relation the issues raised in this article is welcome to contact the Law Society’s Professional Support Unit on (02) 9926 0115 or at [email protected]

Marilyn Cox is a Professional Support Solicitor at the Law Society of NSW.

The Law Society’s Professional Support Unit provides free and confidential information and guidance to the legal profession on costs, ethics and regulatory compliance to help practitioners comply with their obligations under the legal profession legislation.

[1] The Legal Services Award 2020 defines a “law graduate” as a lawyer not admitted to practice but who is undertaking a period of training within a law firm with the view to being admitted to practice.