Compliance audits - Victorian Legal Services Board + Commissioner

Compliance audits

Law practice audits

Under the Legal Profession Uniform Law the Victorian Legal Services Board has the power to audit law practices for their compliance with their obligations under the Uniform Law, the Uniform Rules and any other applicable professional obligations.

The Board may conduct an audit of a law practice if it considers there are reasonable grounds to do so. Audits may be considered where the lawyer or practice have a complaint or conduct history that reveals an audit may be beneficial in helping to deal with some systemic issue facing the law practice. The audit will allow targeted guidance and assistance to be provided to the law practice to help stop further complaints and issues arising again in the future. This will benefit both law practices and consumers of legal services alike.

Law practices participating in an audit generally find it a very useful experience, where they gain insights into how they can improve the management of their systems and better service clients. The practice is provided with a report on the audit, with suggestions to help achieve these goals.

After an audit is conducted the Board may issue a law practice with a formal management system direction, if it considers it is reasonable to do so. This is a compulsory notice requiring the law practice to implement and maintain appropriate management systems designed to help the practice meet their professional obligations. The Board can also direct the law practice to provide periodic reports on the systems they have implemented and their compliance with those systems.

Law practices who fail to comply with a Board-issued management system direction may be disqualified from providing legal Services. Under the Uniform Law the Board may apply to the Victorian Civil and Administrative Tribunal for an order disqualifying a practice from providing all or specified legal services in Victoria, for a specified period or indefinitely.

Self-assessment audits

As a part of its educative strategy to assist the profession the Board has developed a self-assessment audit for law practices to help them see for themselves how they are meeting their regulatory obligations.

Audits of any practice look at appropriate management systems, and are focused on ten objectives identified by the Board as being critical to a law practice delivering strong governance:

  1. competent work practices to avoid negligence;
  2. effective, timely and courteous communication;
  3. the timely delivery, review and follow up of legal services to avoid delay;
  4. acceptable processes for liens and file transfers;
  5. providing for a shared understanding and appropriate documentation from commencement through to termination of engagement covering costs disclosure, billing practices and termination of engagement;
  6. timely identification and resolution of conflicts of interest;
  7. safe and secure records management;
  8. timely compliance with undertakings, orders and rulings;
  9. the effective supervision of the practice and its staff; and
  10. avoidance of any failure to account for trust monies.

The self-assessment audit describes several key concepts relevant to each of the ten objectives which practices should be mindful of. It also provides suggested approaches to help ensure the objectives are met. The suggestions are not exhaustive or prescriptive; each law practice is different so it will be up to each individual practice to determine the most effective systems for them.

The self-assessment tool is designed to allow law practices to help themselves. They do not have to be submitted to the Board. They are intended to be used within the law practice to assist in identifying areas which require further attention. The self-assessment audit document, along with the Appropriate Management Systems Policy, are available below.

Last modified September 26, 2016.