It's important to understand the obligations that all lawyers have as members of a regulated profession and as officers of the court in addition to those duties owed to you as their employer and client. Having this understanding will assist your organisation to maximise the benefits of employing corporate lawyers and help your lawyers to meet their professional obligations.

In Victoria, lawyers are regulated under the Legal Profession Uniform Law Application Act 2014 and must comply with rules of professional conduct set out in the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015. The same professional conduct rules apply to all lawyers – there are no special provisions or carve-outs for corporate lawyers working in-house. 

Corporate lawyers may also have duties under other regulatory schemes, such as the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). General counsel and other senior lawyers may have additional responsibilities under the Corporations Act 2001 (Corporations Act) if their role qualifies them as an 'officer' of the corporation they work for. Some of the duties might overlap with their professional duties as a lawyer. A breach of other duties might be relevant to consideration of a lawyer’s suitability to practise if the breach also amounts to a breach of a lawyer’s Uniform Law obligations.

Any corporate lawyers you employ have personal ethical and professional obligations that they must comply with. While their professional and organisational duties should align across most of their work, they must prioritise their ethical and professional duties above any pressure from their employer to act in a way that is contrary to those duties. Their duty to the court and the administration of justice takes precedence over their duties to you as their employer. They cannot place your interests above the law.

Other fundamental ethical obligations for all lawyers include their duties to act honestly in all their dealings, and to avoid any compromise to their integrity and professional independence. 

It’s important to distinguish between independent legal advice provided by your corporate lawyer and commercial or business advice provided by other parts of the organisation. Differences of opinion are an occasional but inevitable part of employing an independent professional, but their occurrence can be minimised through mutual alignment of expectations and putting in place a process to resolve differences (e.g. clarifying the relevant factual situation, escalating the issue to a more senior lawyer and/or business manager, or seeking a second opinion from a private law firm or barrister). 

You can align expectations by providing your corporate lawyers with opportunities to learn about your business and providing the organisation with information and training about their role and the main legal issues they deal with.

You can expect your corporate lawyer to:

• build a good understanding of your organisation so they can tailor their legal advice to its best interests
• keep you informed of all legal and regulatory requirements that are within the scope of their role - including the risks of non-compliance - and alert you if there is a risk of your organisation breaching any obligations 
• provide you with timely, clear and independent legal advice
• act with honesty and integrity, including alerting you when there is a risk of the business breaching its obligations, and declining to act in conflict with their ethical and professional obligations
• tell you if they are asked to do anything which conflicts with their ethical and professional obligations, and explain why they cannot do what is asked
• deliver competent legal services, and if it is part of their job, properly supervise legal work done by junior lawyers in their team
• maintain client confidentiality, subject to limited exceptions which they will explain to you
• be clear about the circumstances in which client professional privilege (also known as legal professional privilege) does or doesn’t attach to communications with them. 

You cannot expect your corporate lawyer to:

• prioritise your organisational or business interests above their duty to the court and to the administration of justice if there is a conflict between the two
• follow instructions that would condone, assist or ignore dishonest or illegal activity
• change their legal advice to support a desired course of action or outcome for the business, if the proposed course of action or outcome is not legally justifiable
• act dishonestly, conceal information, mislead the court or others, or fail to disclose relevant evidence
• provide advice beyond their areas of expertise
• provide personal legal advice to employees or directors of the business – your corporate lawyer’s role is to advise the business (as their client), not individuals within the business 
• misuse their obligation to maintain confidentiality or improperly assert client professional privilege – only certain types of communications with your corporate lawyer are protected from disclosure in legal proceedings
• withhold advice about significant legal or regulatory risks from the board or senior management if they need to know about such risks in order to perform their functions under the Corporations Act as directors and officers of the company, or some other regulatory framework (such as the AML/CTF Act).

A lawyer’s professional independence and integrity is an asset for your business, but it also means that there are some things you cannot expect or require of them. Asking or pressuring a corporate lawyer to breach their obligations can result in very serious consequences for them and may also have legal or reputational impacts for your business.

Lawyers who breach their professional obligations can have restrictions placed on their ability to practise, and at worst, they can be prevented from practising law.

To perform effectively and in accordance with their ethical and professional obligations your corporate lawyers need the following:

• A culture of openness and honesty that empowers and supports them to discuss issues and raise concerns. They should not be penalised or disadvantaged for raising concerns about potential wrongdoing or refusing to act or participate in circumstances where doing so is likely to breach their professional obligations.
• Encouragement to discuss how their ethical and professional obligations intersect with expectations of them as employees, and how they will be supported to meet their obligations while achieving their performance targets.
• Opportunities to fully understand the business and form collaborative relationships with other employees that support potential legal issues being raised at an early stage.
• Clear and documented frameworks and processes to enable them to provide independent advice and to avoid conflicts of interest, including:
  • clear identification of the lawyer’s client so that everyone knows who they are – and not – advising, including if they are expected to advise related entities within a group or overlapping structure 
  • access to the information they need to be able to advise or act, and to be able to readily identify and manage compliance and other legal risks 
  • clear reporting lines and access to organisational decision-makers so that they can ensure issues, legal compliance needs and risks are understood, and, where necessary, escalated to the level required, including access to the CEO and board
  • direct access to the CEO and board on legal issues if needed, even if their day-to-day management is undertaken by another senior executive (legal advice should not be signed off by a person who is not a practising lawyer)
  • if they are general counsel or a senior lawyer who qualifies as an 'officer' of the company under the Corporations Act, they are obliged to ensure that the directors properly understand any legal or regulatory risks of which the general counsel or senior lawyer is aware, regardless of whether the CEO has already been advised of such risks
  • delineation between their legal work and non-legal work, where they act in other roles in the business (for example, company secretary), so that it is clear when their legal professional obligations apply and when client legal privilege may (or may not) be claimed
  • procedures to manage situations if they are advised to act on a matter that might breach their professional obligations, including escalating conflicts of opinion
  • controls to prevent employment-based performance rewards, incentives or bonus schemes compromising professional duties to act with integrity and professional independence.
• Access to appropriate support and supervision from a more senior lawyer to help them comply with their professional obligations.
• Access to peer networks, including membership of the Association of Corporate Counsel Australia, or the Law Institute of Victoria. This will ensure they have colleagues to draw on for advice and support as needed. Peer support is particularly important for senior lawyers who don’t have internal supervision, lawyers who work solo in a corporate environment, or where there is a small team of lawyers.
• The resources they need to do their job effectively, including relevant reference works, database subscriptions, templates and precedents. Legal documents should be securely managed, and lawyers should have access to private rooms for legally confidential discussions.
• A clear understanding about the procedures for using external lawyers and a realistic budget for such services. You should ensure your corporate lawyers have resources available to obtain external legal advice if they advise you that they do not have the expertise to advise in a particular area of law.
• Support to maintain their corporate practising certificate and comply with their mandatory Continuing Professional Development obligations, as well as any other training or education they need to maintain their knowledge, keep their professional skills and competence up-to-date, and be eligible to renew their practising certificate. 
• Appropriate management of costs expectations to avoid financial pressure that could result in professionally inadequate advice or advice that is outside their area of expertise. 
• Consideration of what insurance cover or other support you can offer them in relation to any personal liability arising from their role (such as coverage under a Directors’ and Officers’ liability policy). Unlike lawyers working in private practice, corporate lawyers are not required to hold professional indemnity insurance.