After years of exams and late nights spent studying and writing assignments, there is nothing more rewarding for a law student than shaking the hand of the Law School Dean in exchange for their testamur.
Becoming a law graduate is a significant milestone for those who want to join the legal profession, but there a few more steps involved before a law graduate can practise law.
Every year there is fierce competition among law practices to secure the best and brightest law graduates in New South Wales (NSW), each of whom have the potential of becoming successful associates of the practice, but care should be taken by principals and law graduates alike not to get caught in the trap of unqualified legal practice.
This article is intended to serve as a reminder of the consequences of unqualified legal practice in NSW.
Legal services only to be provided by qualified entities
The ability to engage in legal practice in NSW is reserved to those that are deemed ‘qualified entities’ (as defined in section 6 the Legal Profession Uniform Law (NSW) (the Uniform Law)). The definition of a ‘qualified entity’ includes an individual who is appropriately authorised under the Uniform Law to engage in legal practice in NSW, including an Australian legal practitioner.
An Australian legal practitioner is defined in the Uniform Law as an Australian lawyer who holds a current Australian practising certificate.
A qualified entity does not include a law graduate, nor does it include an Australian lawyer, meaning someone who has been admitted to the legal profession but who does not hold an Australian practising certificate.
For an individual to engage in legal practice and provide legal services in NSW, they must hold a current Australian practising certificate. Further, for those legal practitioners in private practice, they must be covered by an approved professional indemnity insurance policy. Engaging in legal practice without an Australian practising certificate is considered unqualified legal practice.
Common pitfalls
The Law Society’s Professional Support Unit (PSU) is often asked whether law graduates are able to draft legal documents, including correspondence and court documents, and whether they can appear in directions hearings.
Without a practising certificate and appropriate professional indemnity insurance coverage, a person cannot engage in legal practice – this includes approving and issuing legal documents and appearing in court (except with the leave of the court).
Another common enquiry fielded by PSU is whether a recently admitted solicitor who is subject to supervised legal practice can provide legal advice to a friend or family member outside their employment.
Newly admitted solicitors should be mindful of the conditions that are imposed on their practising certificates, particularly in respect of the requirement for supervision. A solicitor cannot engage in legal practice contrary to those conditions. Where a solicitor engages in legal practice outside the terms of their practising certificate, they may face disciplinary action such as the variation, suspension or cancellation of their practising certificate or they may have a complaint made about them.
Providing legal advice to family and friends is fraught with risk and should, as a rule of thumb, be avoided. Conflict of interest and professional independence issues aside, legal practitioners who are asked by family or friends to provide legal advice should consider whether their practising certificate authorises them to do so.
Unless a person holds a principal of a law practice practising certificate and has appropriate professional indemnity insurance in place, they cannot provide legal advice and services on their own account. For legal practitioners who are required to engage only in supervised legal practice, you must ensure that any legal advice or services you provide are supervised by a legal practitioner who is authorised to do so.
Reminder for principals of a law practice
Principals should be mindful of their obligations under Rule 37 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (ASCR), which 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.” A solicitor with designated responsibility is defined in the ASCR as “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.” This means that any work done by a law graduate in assistance of a solicitor or principal of a law practice is the ultimate responsibility of the principal.
Rule 37 of the ASCR goes hand in hand with section 34 the Uniform Law (Responsibilities of principals), which places ultimate responsibility for the conduct of associates of a law practice on the principal or principals of the law practice. Under section 35 of the Uniform Law (Liability of principals), if a law practice has contravened any provision of the Uniform Law or Uniform General Rules, a principal of principals of the law practice will be taken to have contravened the same provision, if:
- the principal knowingly authorised or permitted the contravention; or
- 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.
A contravention by a principal of a law practice arising under section 35(1) of the Uniform Law is capable of constituting unsatisfactory professional conduct or professional misconduct by the principal.
Consequences of unqualified legal practice
Unqualified legal practice exposes the public to the risk of poor legal advice, inadequate representation, deception and receiving professional services from uninsured entities – as well as damaging the reputation of the profession. It is also unfair to solicitors who comply with all professional legislative and ethical obligations.
The maximum penalty for engaging in unqualified legal practice is a fine of 250 penalty units ($27,500 on 1 July 2015) or imprisonment for 2 years or both.
False advertising and misrepresentation
Section 11 of the Uniform Law imposes an obligation on law practices and law practice principals and associates not to advertise or represent, or do anything that implies that a person is entitled to engage in legal practice unless they are a qualified entity.
The maximum penalty for law practices in breach of this obligation is a fine of 250 penalty units.
The maximum penalty for law practice principals and associates in breach of this obligation is 50 penalty units.
Under section 14 of the Uniform Law the Law Society is authorised to prosecute alleged contraventions of ss 10(1) and 11(1) of the Uniform Law.
Solicitors and principals should also be aware of Rule 36 of the ASRC, which supports the legislative requirements discussed above. Rule 36 .1 provides:
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.
PSU regularly receives calls from law graduates who want to know whether they can use titles such as ‘graduate lawyer’ or ‘supervised lawyer’ in a law practice’s advertisement, including in email signature blocks and business cards.
Attaching the word ‘graduate’ or ‘supervised’ to the word ‘lawyer’ does not change its meaning. Unless the person holds a practising certificate as an Australian legal practitioner, they cannot engage in legal practice. Moreover, they must take care not to hold out that they are entitled to engage in legal practice by using titles such as ‘graduate lawyer’ or ‘supervised lawyer’.
Law practices should be careful not to jump the gun and update the title of a law graduate to ‘lawyer’ or ‘solicitor’ on their website or the person’s email signature before the person receives an Australian practising certificate from the Law Society of NSW. Setting up a compliance management system to track and verify the admission and subsequent grant of a practising certificate for law graduates would be prudent to avoid inadvertent breaches of the Uniform Law and ASCR.
Additional resources
The Law Society’s guide on unqualified legal practice provides further analysis on the definition of legal services and engage in legal practice under the Uniform Law, including relevant case law.
The Law Society’s legal practice matrix can also assist aspiring and practising solicitors understand the common types of legal work they can and cannot undertake depending on their legal qualifications and practising entitlements.
The Law Society’s team of Professional Support Solicitors are also available to provide free and confidential guidance to help legal practitioners understand their practising entitlements and restrictions under legal profession legislation. Call (02) 9926 0115 or email [email protected] if you have any questions or concerns about your practising entitlements.
