Multi-Disciplinary Practices

---

Advantages of multi-disciplinary practices
Safeguards
English legislation
New South Wales legislation
Legal Services Legislation (Miscellaneous Amendments) Bill

---

Advantages of multi-disciplinary practices

The arguments for and against the recognition of multi-disciplinary practices are set out in the extract from the Consultation Paper on Legal Services at annex 1, extracts from the Lord Chancellor’s Green and White Papers at annexes 2 and 3, the extract from the Final Report of the Australian Trade Practices Commission at annex 4, and the extract from the Australian Government’s Access to Justice Action Plan at annex 5. Each of these studies recommended the recognition of multi-disciplinary practices.

Safeguards

2. Paragraphs 12.9 to 12.11 of the Green Paper at annex 2 discuss the safeguards needed to protect the interests of clients seeking legal services from multi-disciplinary practices. The main points made are -

1. safeguards are primarily a matter for the Law Society to consider in addressing what changes would be required to its Practice Rules and guidance on solicitors’ conduct;
2. one approach would be for the Law Society to discuss with other professional bodies the possibility of agreeing a common code of practice or harmonising relevant aspects of different professions’ codes of practice;
3. it is essential that each member of a multi-disciplinary practice should remain individually subject to the rules of his or her professional body;
4. in any case of conflict of interest or rule, it will be essential for a solicitor’s personal responsibility as a lawyer to override his or her responsibility to the practice as a whole;
5. subject to the considerations in paragraphs (3) and (4) above, the Government does not envisage statutory prescription of those with whom solicitors might be allowed to practise jointly, since this would impose an unnecessary rigidity on solicitors’ freedom to adapt to changing circumstances.

3. Paragraph 12.2 of the White Paper at annex 3 states that "The Government therefore proposes to remove the statutory barrier to solicitors forming partnerships with members of other professions. This matter will thereupon become one entirely for the professional bodies involved."

4. The Final Report of the Australian Trade Practices Commission (at annex 4) concluded that -

"It recognises the potential for conflicts of interest that may be involved but considers those conflicts should be addressed directly through appropriate conduct and ethical rules and disciplinary arrangements, rather than through restrictions on business structure which can result in inefficiencies and costs."

5. The Australian Government’s Access to Justice Action Plan (at annex 5) concluded that -

"We consider that the increased choice and convenience for clients and the potential for flexibility for lawyers justify the removal of the legal barriers to multi-disciplinary practices, subject to the development of a suitable ethical and regulatory regime. The details of the regulatory regime will need to be explored by a suitably expert body drawing on the views and experience of the range of professions and occupations likely to be involved in multi-disciplinary practices."

English legislation

2. Legislation removing statutory barriers to solicitors and notaries public entering into multi-disciplinary practices was enacted in England in 1990. Section 66 of the Courts and Legal Services Act (at annex 6) does not, however, prevent rules from being made prohibiting solicitors or notaries public from entering into multi-disciplinary practices, or restricting the circumstances in which they may do so.

3. At the time that legislation was enacted, no agreement had been reached in respect of the safeguards that would need to be imposed. The Law Society was, in fact opposed, to multi-disciplinary practices and its rules still prohibit them. However, in June 1996, the Council of the Law Society announced that it would conduct a fresh review, with an open mind, on the question of whether solicitors should be permitted to practise in partnership with non-lawyers.

New South Wales legislation

2. The only jurisdiction in Australia that currently permits multi-disciplinary practices is New South Wales. An Act of 1993 provides that, subject to contrary provision in the regulations or barristers or solicitors rules, a barrister or solicitor may be in partnership with a person who is not a barrister or solicitor. This means that, unless contrary provision is made, a non-lawyer partner of the barrister or solicitor may conduct partnership business (including "the business of a barrister or solicitor") and may share receipts and profits of the "business". Subject to the regulations, the requirements relating to trust accounts, and fidelity funds apply to all non-solicitor partners as if each were a solicitor. On application by the Council of the Bar Association or the Law Society, a Tribunal may make an order prohibiting any barrister or solicitor being a partner with a specified person if, for example, the Tribunal is satisfied that the position is not a fit and proper person to be such a partner or has been guilty of conduct that would, if the person were a barrister or solicitor, constitute professional misconduct or unsatisfactory professional conduct.

3. A current rule provides that solicitors must have at least 51% of the shares or other means of controlling the multi-disciplinary practice. This rule may be challenged by the New South Wales government on the basis of fair trading and competition rules.

4. The solicitors’ profession is lobbying for a requirement that all non-lawyers involved in an multi-disciplinary practice must be registered with the local law society. Some solicitors have criticised the requirement that the solicitors’ compensation fund and indemnity fund has to cover the negligence and wrong-doing of non-lawyers, as the cost of this falls on solicitors.

Legal Services Legislation (Miscellaneous Amendments) Bill

2. Clauses 14 and 15 of the Bill propose to add new sections 43B and 49A to the Legal Practitioners Ordinance. The new sections provide that notaries public and solicitors may, in accordance with rules in force, enter into partnership with persons who are not notaries public or solicitors. To that extent, the new sections follow the approach of section 66 of the English Act.

3. Proposed section 49A(5) (in clause 15) is based upon the New South Wales legislation. It ensures that various provisions in the Ordinance are not contravened by activities within a multi-disciplinary practice; and section 49A(5)(e) provides that (subject to rules made under the section) non-solicitor partners and the business of the partnership are subject to -

The Law Society may wish to comment on whether it is appropriate, as a general principle, to apply rules relating to solicitors to non-solicitor partners. An alternative approach would be to extend existing rules where appropriate.

13. New sections 43B and 49A will not be brought into operation until relevant rules are made. In the case of notaries public, the rules will be made by the Chief Justice; and in the case of solicitors the rules will be made by the Council of the Law Society with the approval of the Chief Justice. The rules will be subsidiary legislation that will be tabled in the Legislative Council and that may be amended or repealed by the Council.

---