By Dora Chan -
The Professional Support Unit often hears from solicitors asking whether there are other ways of practising law, outside of being directly employed by a law practice, a company or a government agency.
This question is sometimes prompted by a job advertisement seeking a ‘consultant’ or ‘independent contractor’. Other times, the solicitor might be thinking about becoming a ‘locum’. This article will explore the compliance issues raised by these different roles and titles.
Defining the terms
To begin with, let us consider what each of these three terms usually refer to. None of the terms are defined within the Legal Profession Uniform Law (Uniform Law).
- Consultant: The term ‘consultant’ can refer to an employee of a law practice or an independent contractor, depending on the factual circumstances of how they provide legal services and the arrangements between them and the law practice.
- Independent Contractor: Independent contractors have autonomy in deciding how they provide legal services. They are not under the control of the law practice that engages them. They set up and provide legal services through their own law practice.
- Locum: A locum is a solicitor who works in a law practice for a temporary period. They are normally engaged by a law practice to cover permanent staff who are on extended leave, or to provide additional manpower or expertise on an ad hoc project.
Practising Certificate categories
In each of the above circumstances, solicitors need to assess which category of practising certificate (PC) is most appropriate.
For solicitors who work in a private legal practice, there are two applicable categories of PC:
- Principal of a law practice: A person who practises law on their own account as a sole practitioner, a partner in a partnership, or a principal of an incorporated legal practice or unincorporated legal practice, should hold a PC in the category of principal of a law practice.
- Employee of a law practice: If a solicitor is employed by a law practice to provide legal services through the practice as an employee only, then they should hold an employee of a law practice PC and comply with the conditions of their PC. They cannot provide legal services on their own account.
For solicitors employed as in-house counsel by a company, the appropriate PC category is ‘corporate legal practitioner’. For solicitors employed by a government agency or authority, the appropriate PC category is ‘government legal practitioner’.
What is an ‘employee’?
Whether someone is an ‘employee’ is determined under employment law. The term ‘employee’ is not defined in the Uniform Law.
Generally, a person is considered an employee if their employer has a right to control how, where, and when they perform their work. An employee works for the benefit of the employer’s law practice, which invoices clients for the employee’s work. An employee receives a salary, superannuation contributions, and is entitled to statutory leave.
What is an ‘independent contractor’?
If a person provides legal services as an independent contractor, they must hold a PC in the category of principal of a law practice.1 They must also have established and registered a law practice with the Law Society of NSW, and be covered by their own insurance.
Typically, an independent contractor determines where and when they work. They work to advance their own business interests, and they provide legal services directly to a law practice or another client engaging them. They would therefore issue invoices for their work.
As a solicitor needs to hold a PC in the category of principal of a law practice to engage in legal practice as an independent contractor, a person who still has Condition 2 (Supervised Legal Practice) or Condition 3 (Practice Management Course) on their PC cannot practise as an independent contractor.
The question of whether someone is working as an employee or independent contractor is a question of employment law, which depends on the specific factual circumstances of the work and the engagement.
Contrary to popular belief, the following factors are not conclusive of whether a solicitor is an independent contractor:
- Title: The fact that someone is given the title of ‘contractor’ or ‘consultant’ does not of itself determine whether that person is an independent contractor.
- ABN: If a solicitor is required to provide a legal practice with an Australian Business Number (ABN) for remuneration purposes, this does not automatically mean that the solicitor is an independent contractor.
The Australian Tax Office and the Fair Work Commission websites contain helpful information on the differences between employees and independent contractors.2 However, if you are unsure about the legal status of your work arrangements, and the category of PC you should hold, you should seek independent legal advice.
Professional Indemnity Insurance
Under s 211 of the Uniform Law, an Australian legal practitioner can only engage in legal practice in NSW if their legal practice is covered by an approved professional indemnity insurance policy (PII policy).
If you are an employee of a law practice, your employer’s PII policy covers the legal services you provide through that practice.
Corporate and government legal practitioners are exempt from holding or being covered by a PII policy.3
On the other hand, if you are an independent contractor, you need to take out your own PII policy.
Lawcover is the approved PII provider in NSW. See the checklist on their website4 which helps solicitors determine whether they are an employee or an independent contractor for PII purposes. Lawcover should be contacted for further guidance on this matter.
However, this checklist should not be used to determine whether you are an employee or independent contractor for the purposes of the Uniform Law and Rules.
Is a consultant an employee or independent contractor?
As mentioned earlier, the term ‘consultant’ is not defined under the Uniform Law. If you are recruited as a consultant, you need to ask the question: am I required to work as an employee or as an independent contractor? This is an employment law question, to be determined through careful consideration of all the factual circumstances of the proposed engagement.
If a consultant determines that they are an employee, then they can hold a PC in the category of employee of a law practice. However, if the consultant is also bound by conditions 2 and 3 on their PC, they can only engage in legal practice under supervision, and they cannot handle trust moneys or sign bills for the law practice.
On the other hand, if a consultant determines that they are an independent contractor, they must ensure that they are authorised to practise as a principal. This means that they must hold a PC in the category of principal of a law practice, they must work through their own law practice, and their law practice must be covered by a PII policy.
Locum
In the legal profession, a locum refers to a solicitor who steps in temporarily to act in place and fulfil the duties of another solicitor in a law practice. They help law practices maintain normal operations when permanent staff take leave or temporary staff are needed for special projects.
As the term ‘locum’ is not defined under the Uniform Law, the compliance requirements will depend on the work the locum solicitor is required to perform. For example:
- If the locum solicitor is required to receive trust moneys and sign bills, they must be appointed principal of the law practice, which means they must hold a PC in this category. Their work would be covered by the law practice’s PII policy.
- Alternatively, if the locum solicitor is replacing a non-principal employed solicitor on extended leave, it will suffice that they hold a PC in the category of employee. Their work would also be covered by the law practice’s PII policy.
- If the locum solicitor is engaged as an independent contractor, for example to provide external advice about a legal issue that the law practice lacks knowledge and expertise in, then the solicitor must hold a PC in the category of principal, work from their own law practice, and be covered by their own approved PII policy.
The Law Society’s Locum Service can connect law practices seeking short term assistance with experienced substitute solicitors. Law practices that wish to recruit a locum solicitor can download the Locum Assignment request application form.
If you want to register as a locum solicitor with the Law Society’s Locum Service, you must have practised for at least five years after admission, and your PC cannot be subject to Condition 2. You can register by submitting the Locum panel application form.
Further information about the Locum Service is available on the Law Society website.5
Ethical and other considerations
Whether you are working as an employee, independent contractor, or a locum, you should consider the ethical obligations in Rules 3, 4, 9, 10, 11, 12 and 36 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015. Be mindful of and understand how to comply with these Rules in any role you take up as a solicitor.
Notably, if you are working in two roles simultaneously, you must consider how to avoid conflicts of interest and maintain confidentiality between the two different entities.6
Notification on changes to practising details
Finally, any changes to employment or practising circumstances must be notified to the Law Society Registry within 7 days of commencement of the new role.7
Key takeaways
Before you accept a role to engage in legal practice, you need to ensure that you hold a PC in the appropriate category and are covered by an approved PII policy. You will need to determine whether you are required to hold a PII policy in your own name, or whether your services will be covered by the law practice’s PII policy.
Working as an employee versus as an independent contractor can also have different legal and financial implications. Seek independent legal and financial advice to ensure that the role you are considering suits your personal objectives and avoids unnecessary surprises.
Further guidance
Solicitors who would like further guidance and support can contact the Professional Support Unit (PSU). PSU provides free and confidential guidance to solicitors in NSW who require assistance understanding their regulatory, ethical and professional obligations in legal practice.
| AML/CTF | amlctf@lawsociety.com.au | (02) 9926 0249 |
| Costs | costs@lawsociety.com.au | (02) 9926 0116 |
| Ethics | ethics@lawsociety.com.au | (02) 9926 0114 |
| Regulatory Compliance | regulatory.compliance@lawsociety.com.au | (02) 9926 0115 |
Dora Chan is a Professional Support Solicitor with the Law Society of NSW. Dora assists members of the legal profession in relation to practising certificate conditions, regulatory obligations in legal practice management and legal costs.
1 This means that a person who still has condition 2 (Supervised Legal Practice) or condition 3 (Practice Management Course) on their PC cannot be an independent contractor.
2 See these links:
- https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor and
- https://www.fairwork.gov.au/find-help-for/independent-contractors#difference-between-contractors-and-employees
3 Legal Profession Uniform Law 2014 s 215(8); Legal Profession Uniform General Rules 2015 r 82(1)
4 See checklist here: https://www.lawcover.com.au/wp-content/uploads/2019/11/2019_Consultant-Checklist.pdf
5 You can also read this article for further information: https://lsj.com.au/articles/locum-solicitors-how-to-find-or-become-one/
6 See our article “Can a solicitor have two jobs”
7 Legal Profession Uniform Law Application Regulation 2025, reg 61
