We regularly receive complaints about lawyers acting in motor vehicle accident claims. The complaints often relate to a predatory and unethical practice known as ‘car napping’.

In a typical car napping matter, a motor vehicle accident has happened and a driver – usually the not-at-fault party – comes into contact with a business representative who offers to arrange or provide services such as towing, repairs and/or a hire car. The business representative leads the person to believe that because they weren’t at fault, they can access these services at no cost or risk to themselves.

As part of this process, the business representative asks the person to sign certain documents that often include an ‘Authority to Act’ form. This form claims to authorise a lawyer to act on the person’s behalf in trying to recover the costs of the services provided from the at-fault party.

Many consumers who have made complaints to us have said that the purpose and meaning of the documents they were asked to sign – including an Authority to Act form – weren’t explained to them, and that the lawyer didn’t follow up with them to make sure they understood the effect of the authority.

Each complaint has involved a lawyer breaching their fundamental ethical duties – for example, by undertaking legal work for the not-at-fault party without their knowledge or instructions (including starting court proceedings or settling the claim) or failing to provide them with advice about the risks of litigation (such as the possibility of an adverse cost order). 

We remind lawyers acting in motor vehicle claims to ensure they comply with their legal, professional and ethical obligations. We have investigated and prosecuted lawyers following complaints about these matters, with one former lawyer having been struck off the roll of Australian lawyers for repeatedly engaging in unethical conduct.

Resources that can help

Lawyers acting in these matters should review our updated guidance on acting ethically in motor vehicle accident claims. It clearly sets out our minimum expectations, as well as practices that we consider to be unacceptable.
 

Claim farming involves collecting information about individuals who have suffered personal injuries and making unsolicited contact to encourage them to make a redress application or to start litigation.

So-called ‘claim farmers’ often use unethical or high-pressure tactics to solicit claims from individuals and may on-sell those claims to a legal practice or claims management company.

Prohibitions against different types of claim farming have been introduced over the last three years in South Australia, New South Wales and Queensland, including specific legislative provisions directed at the conduct of lawyers. Offences under those laws are subject to penalties of up to $55,000, demonstrating the significant community concern regarding this conduct.

Victoria hasn’t legislated to address claim farming practices, but we are alert to the risk of claim farmers operating across the state – and of lawyer involvement with claim farmers. 

Of particular concern are lawyers who put their own financial interests ahead of their clients’ best interests – for example, misrepresenting that legal services are required to make a redress application, by charging claim farming referral fees back to clients as disbursements, or otherwise not being transparent with clients about the likely financial outcome of their matter. These practices are unethical and unacceptable.

We remind lawyers who are involved in claim farming, or who represent clients eligible for statutory redress, to take care to act in accordance with their legal, professional and ethical obligations. Failure to do so is a matter we will take seriously, and risks investigation and disciplinary action.

Resources that can help

Lawyers involved in these matters should review our recent guidance on engaging ethically with people eligible for statutory redress. It sets out our regulatory position on lawyer involvement in claim farming, reminds lawyers of key professional and ethical obligations, and provides guidance on what good and bad practice looks like.  

Since 2018, section 258(1) of the Uniform Law has imposed prohibitions and restrictions on law practices promoting or operating managed investment schemes, and placed limitations on law practices providing certain mortgage-related services.

These prohibitions and restrictions are intended to minimise law practices’ exposure to conflicts of interest and the consequent potential for significant consumer harm. Breaches attract significant penalties. 

Despite this, we have identified law practices that appear to be providing mortgage financing services in breach of their professional duties and other legislative obligations.  Any lawyer who has helped facilitate a loan, or who has received or dealt with payments for the purposes of a loan, may be involved in mortgage financing.

We remind lawyers involved in mortgage financing of the significant risk this activity carries. There is:

• the risk of directly breaching the prohibitions and restrictions imposed on these activities by the Uniform Law 
• the potential for conflicts between their interests and those of their client, which can compromise their ability to act solely in their client’s best interests
• the risk that clients (and other involved parties) are confused about the role of the lawyer and law practice – including whether the lawyer is providing them with legal services or is instead acting as a broker/intermediary, and on what basis related fees are calculated and payable
• the lack of protection available to client investments – client funds in mortgage financing arrangements are not protected by the Fidelity Fund and may not be covered by law practice insurance, and this is a fact that clients are unlikely to know
• the possibility of contravening prohibitions in the National Consumer Credit Protection Act 2009 (Cth) and the Corporations Act 2001 (Cth).

We further remind lawyers involved in this activity that: 

• the licensing scheme under the Uniform Law does not license lawyers or law practices to provide mortgage financing services 
• law practices providing mortgage financing services may require a credit licence in accordance with the National Consumer Credit Protection Act 2009 (Cth)
• whether a law practice requires an Australian Financial Services Licence (AFSL) to provide mortgage financing services will depend, in part, on the interpretation of financial services or financial products, which will vary according to the relevant facts – and likely involve complex questions about the nature and extent of the relevant services. 

Finally, we remind law practices that money that is held by a law practice for, or in connection with, mortgage financing undertaken by the practice is not trust money, and trust accounts must never be used to manage mortgage financing-related funds. This is a direct breach of the Uniform Law. 

Resources that can help

Any lawyer engaged in mortgage financing should reflect on this information and take immediate steps to address any legal non-compliance and ethical issues. This includes seeking external legal advice from an expert, and ethical support, if needed. 

Victorian solicitors can seek ethics and other support from the Law Institute of Victoria’s ethics guidance support support line. Victorian barristers can seek ethics support from the Victorian Bar's Ethics Committee.

The Legal Services Council has produced an information sheet for practitioners on managed investment schemes that provides further detail about the operation of section 258. We will also be developing further guidance for the profession on mortgage financing and managed investment schemes in the coming months.

Recent state and federal Royal Commissions and parliamentary inquiries have surfaced concerns about in-house legal teams and their role in relation to alleged wrongdoing. Examples include the Royal Commission into the Casino Operator and Licence (Crown Casino), the Royal Commission into the Robodebt Scheme, and the Inquiry into management and assurance of integrity by consulting services.

Of particular concern is the extent to which the protections offered by client legal privilege (also known as legal professional privilege) may be being improperly used within organisations to prevent disclosure of relevant documents in litigation.

Given these developments, and the continued growth of in-house counsel numbers (with 29% of practising Victorian lawyers now holding a corporate or government practising certificate), we have increasingly focused on the in-house sector to better understand the ethical challenges facing this growing cohort.

We recognise that in-house lawyers play a critical role in supporting respect for, and outcomes consistent with, the rule of law, in operating environments that are often complex. We also appreciate that a key pressure for in-house lawyers is managing employer expectations in a way that is consistent with their professional and ethical obligations.

We encourage in-house lawyers to take steps to ensure they have the support they need to manage their professional obligations with their duty to their employer, and to seek support and training if needed. It is particularly important for in-house lawyers who are working solo or in a small team to ensure they have access to external guidance and support networks.

Resources that can help

We’ve developed three resources to support corporate in-house lawyers (i.e. lawyers who hold a corporate legal practitioner practising certificate). Resources for government lawyers will be developed later in 2026.

We encourage all lawyers who are working in corporate in-house roles – including those who have been in this role for some time – to read our statement of core expectations for corporate lawyers and to share our information sheet for employers of corporate lawyers with managers and colleagues.

Lawyers thinking of moving into a corporate lawyer role are encouraged to read our guidance for prospective corporate lawyers.

These resources have been informed by research showing that many in-house lawyers experience tension when balancing their ethical obligations with the demands of their employers, and that some corporate employers may not be fully aware of the ethical constraints that their lawyer employees operate within.

The Association of Corporate Counsel Australia is part of a global organisation that offers resources, guidance and support to in-house lawyers who choose to become members.

The Law Institute of Victoria offers free and confidential ethics advice to all lawyers via its ethics and practice support line. It also offers all lawyers access to a practice support line, and an anti-money laundering and counter-terrorism financing helpline.

Barristers can seek support from the Victorian Bar's Ethics Committee.

Lawyers who are well are key to a sustainable legal profession and functioning legal system.

Conversely, poor lawyer wellbeing negatively affects individual lawyers, clients, legal workplaces and the broader justice system. This is why we and other legal regulators throughout the world are focusing our attention on the causes of – and solutions to – this issue. 

Nearly 30% of lawyers report moderate to severe levels of distress, with rates rising even higher for early career lawyers. Thirty-nine per cent of lawyers report that working in the legal sector has had a negative or extremely negative impact on their wellbeing.

We know that poor lawyer wellbeing is a complex, multi-factorial issue, with our recent systems effect research identifying 45 interconnected factors that contribute to this problem – at the sectoral, organisational, interpersonal and individual levels.

All lawyers can be susceptible to poor wellbeing. However, research tells us there are particular vulnerability factors and psychosocial hazards in legal work that increase this risk. These include professional or physical isolation, a lack of access to mentors or colleagues, poor supervision, heavy workloads, a hyper-competitive environment, commercial and performance pressures, continued exposure to traumatic material, and running a business while experiencing health, financial or personal issues. 

Our regulatory work has shown us that poor wellbeing is both a feature of, and key risk factor for external interventions, investigations and compliance audits of law practices. We have observed an unfortunate trend – first raised in our Risk Outlook 2024 – of lawyers’ judgement being impaired due to poor wellbeing that is often the result of extreme pressure or stress. Lawyers who are self-medicating or dealing with addictions commonly feature in trust defalcations and Fidelity Fund claims. Poor wellbeing can also be a barrier to law practices engaging proactively with us. Often, what could have been a minor or easily rectified compliance issue turns into a more serious conduct concern.

Through our Lawyer Wellbeing Project, we are taking an active role in trying to drive cultural change within the profession to reach a state where wellbeing is an expectation and the norm. We are grateful to the many lawyers who responded to our call to participate in, and support the development of, a Lawyer Wellbeing Systems Theory of Change, and commend the profession for its strong support in developing and rolling out our new Wellbeing Guidelines for Legal Workplaces.

However, there is still a long way to go, and the profession must also continue to take action.

We remind leaders in the law that managing systemic wellbeing issues is a key part of good practice management that reduces the risk of professional indemnity claims and regulatory attention. Employers also have clear duties under the new Occupational Health and Safety (Psychological Health) Regulations 2025(Vic) to identify and control psychosocial hazards that increase the risk of work-related stress. It’s important too for employers to appreciate that when lawyers are exposed to multiple psychosocial hazards without mitigation, particularly if they are normalised within a legal culture, there is an increased risk of poor wellbeing.

We also urge all lawyers to incorporate reflective practice into their working lives to assist in processing complex events, situations and experiences. Its benefits are well-established, and include greater resilience, emotional regulation and enhanced overall wellbeing.

Resources that can help

Our website includes a range of general resources about wellbeing in the legal profession, as well as helpful information about wellbeing support services.

Our Wellbeing Guidelines for Legal Workplaces outline evidence-based steps that leaders and others in the profession can take to progressively build healthy, ethical workplaces.

WorkSafe Victoria has published comprehensive guidance for all employers on psychosocial hazards and employers’ legal duties to manage these risks, and the Law Institute of Victoria and the Victorian Bar have also produced information on psychosocial hazards.

In 2025, we engaged Phoenix Australia to deliver a sector discussion paper on vicarious trauma risks in the legal sector, and how best to address them. We will be releasing additional supportive resources on vicarious trauma later in 2026.

Our website also includes an introductory guide to reflective practice, and a reflective practice template suitable for all lawyers.

General support is available to lawyers experiencing poor wellbeing, or who need support for ethical issues at work, is available via:

• the Law Institute of Victoria's health and wellbeing hub, and a free and confidential 24/7 counselling service for all Victorian solicitors 
• the Law Institute of Victoria’s free and confidential ethical support, which is available to all Victorian solicitors via its ethics guidance support line
• the Victorian Bar's health and wellbeing portal for barristers, and confidential counselling service for members
• the Victorian Bar's Ethics Committee.

As we have previously communicated and continue to make clear to lawyers, sexual harassment in the profession is unacceptable. It is also unlawful, breaches rules of professional conduct, and is capable of constituting the serious disciplinary charge of professional misconduct.

We are therefore very concerned that rates of sexual harassment within Victoria’s legal profession remain high.

Findings from our 2025 Victorian Lawyer Census show little has changed in terms of the nature and prevalence of sexual harassment in the profession since our 2019 study. Notably, 9.5% of respondents experienced sexual harassment in the last year – which is statistically unchanged from the 8% in 2019. Female lawyers experienced sexual harassment at more than three times the rate of male lawyers (13% versus 4%), and over half of those who experienced sexual harassment identified the perpetrator as a colleague within their own organisation, with 73% indicating the perpetrator was more senior to them.

Sexual harassment exacts a significant toll on those who experience it. Lawyers who experienced harassment in the past 12 months showed more than double the rate of severe psychological distress (27% versus 12%) and more than double the rate of high burnout risk compared to their peers. They reported significantly lower satisfaction across every measured life domain – physical health, personal relationships, work, financial situation, and life as a whole.

We remind leaders in the profession that sexual harassment is a psychosocial hazard that employers have a legal duty to manage. More generally, we remind all lawyers that, in August 2025, the Victorian Civil and Administrative Tribunal (VCAT) recommended that a solicitor who sexually harassed and bullied his own employees be struck off following charges we brought against him in VCAT. In making its orders, VCAT said that community standards and expectations when it comes to the consequences of engaging in sexual harassment and workplace bullying have shifted. This case sets a significant precedent and should serve as a warning to those in the profession who conduct themselves in ways that are incompatible with the law, professional obligations, and community standards.

We will continue to investigate and take disciplinary action in response to complaints we receive about sexual harassment – including harassment that is directed against a legal colleague, a client or anyone else.

Use of non-disclosure agreements

Lawyers who advise clients on matters relating to sexual harassment are reminded that the passage of the Restricting Non-disclosure Agreements (Sexual Harassment at Work) Act 2025 (Vic) will change the way non-disclosure agreements can be used in workplace sexual harassment cases.

The new law is intended to come into operation on 1 July 2026. Ahead of its commencement, lawyers who draft or advise on non-disclosure agreements should continue to do so in line with our advice on using confidentiality clauses to settle workplace sexual harassment complaints.

Issuing defamation concerns notices

Lawyers who advise clients in relation to sexual harassment claims, or clients who are the subject of such claims, should be careful about issuing defamation concerns notices in response to these claims. In Magar v Khan [2025] FCA 874 the Federal Court of Australia found that this conduct may constitute victimisation, in contravention of section 47A of the Sex Discrimination Act 1984 (Cth). Lawyers should pay close attention to the following words of Judge Bromwich in that decision:

'A person [about whom a complaint of sexual harassment has been made], and any lawyer advising such a person, should recognise that resort to threats of defamation action for complaining about sexual harassment is a dangerous course unless comfortably satisfied that the allegations are baseless' at [204].

Resources that can help

We want to hear from anyone who experiences or witnesses sexual harassment by a lawyer.

Our specialised Sexual Harassment Complaints Team manage formal complaints via our regular complaints process. Informal reports or information can be shared with the team anonymously. To make a complaint or informal report:

• call (03) 9679 8090 to speak with a member of the Sexual Harassment Complaints Team, or leave a message for someone from the team to call you back
• email harassmentcomplaints@lsbc.vic.gov.au
• make an anonymous report using our online reporting tool.

Our website offers general information about wellbeing support services as well as a resource with information about what a person might consider doing if they are experiencing sexual harassment, including at the time of an incident and immediately afterwards. We’ve also developed a resource for people who have witnessed or heard about sexual harassment by a lawyer or in a legal workplace. It includes actions that bystanders can take to respond to sexual harassment.

When sexual harassment is unchecked or unchallenged, it continues. This is why we encourage anyone who witnesses this conduct to consider acting on it – even if they decide not to make a complaint or report to us. We have seen an increase in reports and complaints about sexual harassment over the last few years. This has helped us to investigate and prosecute an increasing number of these matters. Our focus on this work will continue.

Bullying, harassment and discrimination

Bullying, harassment and discrimination are prohibited forms of conduct under both national and state laws – including the Occupational Health and Safety Act 2004 (Vic), Equal Opportunity Act 2010 (Vic) and Fair Work Act 2009 (Cth). They are also forms of conduct that are – in different ways – directly prohibited by professional conduct rules, and capable of constituting both unsatisfactory professional conduct and the more serious disciplinary charge of professional misconduct.

Despite being unlawful and unprofessional, local research shows both bullying and discrimination are prevalent in the Australian legal profession, and this is consistent with overseas findings. The complaints we receive from both lawyers and clients frequently feature allegations of this conduct, which is of increasingly serious concern to us.

Lawyers all share responsibility for addressing this behaviour within their workplace settings. We also expect employers to identify and manage this conduct, as part of their approach to good practice management and consistent with their obligations under the Occupational Health and Safety (Psychological Health) Regulations 2025 (Vic) to identify and control psychosocial hazards that increase the risk of work-related stress for their employees.

We also want to know about these incidents so we can assess whether a regulatory response or a referral to another body is required.

Workplace incivility

Our Legal Services Research Centre defines workplace incivility to be low intensity behaviours that are contrary to workplace norms but not as extreme as bullying or harassment. For example, rude and discourteous behaviour, ostracism and professional discrediting.

Recent research has highlighted the prevalence of incivility in the profession, and the risk it creates for the delivery of quality legal services and the sustainability of the profession. The Lawyer wellbeing, workplace experiences and ethics research report (Workplace experiences report), which was supported by regulators across the three Uniform Law jurisdictions, found that 87% of nearly 2000 surveyed Victorian, New South Wales and Western Australian lawyers had experienced some form of incivility. Similarly, in our Victorian Lawyer Census 2025, over four in five respondents (83%) reported having experienced or witnessed uncivil behaviour in the previous 12 months.

Importantly, our Victorian Lawyer Census 2025 found that uncivil behaviours did not occur in isolation. They clustered with other indicators of negative workplace culture, including inadequate compensation, excessive workload, conflicts with values or professional obligations, and sexual harassment. We also know from our Workplace experiences report that lawyers subject to incivility report lower levels of positive wellbeing and perceive their workplace to have a less ethical climate.  

The clustering of these factors highlights the problematic nature of incivility and the risks that surround it. Incivility may not be the root cause of poor workplace culture, but incivility and harmful workplace conditions are mutually reinforcing features of poor workplace cultures.

These findings are of serious concern to us, and during 2026, we will be considering actions we can take to support the profession to mitigate incivility.

We also remind legal employers that they have a legal obligation to prevent and respond to poor behaviour that presents a risk to employee safety. We expect legal employers to take a proactive approach to identifying and addressing incivility in their workplaces, and be alert to the interconnected risks that can eventuate when this conduct is left unaddressed.

Resources that can help

Employers should review WorkSafe Victoria’s comprehensive guidance for all employers on psychosocial hazards and employers’ legal duties to manage these risks. Other agencies including Safe Work Australia and the Victorian Equal Opportunity and Human Rights Commission also have resources that can help principals identify and appropriately control psychological and physical risks to their employees.

Anyone who experiences or observes bullying (or harassment or discrimination) by a lawyer can report it to us.

Bullying, discrimination or harassment involving barristers can also be reported by barristers, or by anyone who engages with barristers (for example, administration, personal assistants, secretaries and clerking staff) to the Victorian Bar via their complaint and report form.

Complaints about judicial bullying and discrimination can be made through the Judicial Commissioner of Victoria's online portal. Complaints may also be submitted to the Judicial Commission of Victoria by the Law Institute of Victoria or Victorian Bar on behalf of one of their members, without requiring the practitioner’s identity to be disclosed.

Protocols between the Law Institute of Victoria and the Victorian Bar also allow lawyers to raise inappropriate judicial conduct with their professional association, which then raises the concern with the court.

Over the past three years, use of artificial intelligence (AI) – especially generative AI (GenAI) – by lawyers globally has increased dramatically, as breakthroughs in this technology have accelerated. Locally, our Legal Services Research Centre has found almost 40% of Victorian lawyers are using GenAI tools in their legal practice.

Both legal and general-purpose AI tools can offer law practices significant benefits, including the ability to automate repetitive tasks, supplement research, improve the quality and accessibility of written legal information and advice, and potentially help triage clients and identify their legal issues.

As these tools continue to mature, they may create even more opportunities for innovation and efficiencies in the delivery of legal services – in particular, to increase access to justice and improve the sustainability of the justice system. We are also interested in their potential to support lawyer wellbeing outcomes and workforce sustainability by improving job design, reducing heavy workloads and limiting exposure to vicarious trauma.

For these reasons, we encourage lawyers to develop their technological competency to use these tools responsibly and ethically, in line with our Statement on the use of artificial intelligence in legal practice, as well as the Supreme Court guidelines, County Court guidelines, and the Victorian Civil and Administrative Tribunal’s practice note.

However, it is equally important for lawyers to not rely on GenAI outputs without personally verifying them (including reading any cited sources) or use GenAI to generate outputs that cannot be properly verified. Doing so is a breach of professional obligations, puts their clients in financial and legal jeopardy and compromises the profession’s reputation. Lawyers who use inaccurate or misleading outputs in court materials and submissions also risk judicial criticism.

Law practice principals are advised to set clear policies about when and how GenAI use is permitted in the workplace. They should also confirm the security and confidentiality of AI tools before allowing their use with client information, provide staff with professional development and training in these tools, and put in place processes to verify outputs and ensure transparency about their use (noting that some judicial guidelines require disclosure of AI use). Early career lawyers and legal support staff who are using these tools in the course of their work should be properly supervised.

We take failures by lawyers to properly verify materials generated with the help of AI extremely seriously, particularly where this leads to poor outcomes for consumers or creates administrative burden and inefficiencies for the courts. It can result in possible regulatory and/or disciplinary action – as was the case in the Dayal matter.

It is also important for all lawyers to confirm whether their clients have used GenAI to generate documents relevant to their legal matter, and to explain to clients the risks of doing so – for example, the loss of client legal privilege or confidentiality.

Resources that can help

For useful general resources relevant to AI use in legal practice, see the:

• Law Library of Victoria’s guide to AI in the law for legal practitioners, and their free training and continuing professional development on AI (which is based on their digital literacy framework)
• Legal Practitioners’ Liability Committee’s webinar on reducing risk with reliable research, produced in collaboration with the Law Library of Victoria
• Law Institute of Victoria’s Artificial Intelligence Hub
• Victorian Bar Ethics Committee’s guidance for barristers on the ethical use of AI in legal practice
• Queensland Law Society’s template warning for clients on the risks of using AI tools in their legal matter
• Australian Government’s National Artificial Intelligence Centre.

In 2026, we will provide lawyers with further guidance on the use of AI in legal practice.

Choosing and using legal services can be a daunting experience for many individuals. Most people only seek the services of a lawyer infrequently – often during times of stress – and they may also have widely differing levels of legal capability and/or be experiencing vulnerability.

Legal capability is a term that describes the array of knowledge, skills and attributes required for a person to have an effective opportunity to decide whether and how to make use of the justice system.

The Public Understanding of Law Survey (PULS) demonstrates there is strong social patterning to legal capability, with higher or lower scores associated with certain demographic groups – including in relation to skills, confidence and positive or negative attitudes. Significantly, people aged 65 and over, people with lower than Year 12 education, and people experiencing financial distress or severe mental distress are more likely to have low skills, low confidence and a negative attitude when engaging with lawyers and the legal system. Legal capability also transcends social and economic disadvantage – it matters regardless of characteristics and means.

PULS and the recent Legal Understanding and Lawyer Use (LULU) survey also explained why legal capability matters. People with lower levels of legal capability are less likely to extract value from legal advice (PULS), in part because they are more likely to experience a mismatch between the level or intensity of service they wanted and the level they obtained (LULU).

While legal capability is an important part of the picture, it is important to understand that consumers can have both greater or lesser capability, and at the same time experience vulnerability. Vulnerability can be related to personal characteristics (for example, psychological or mental distress or age), life circumstances (such as being a victim of violence or having an uncertain visa status), and previous experience of or exposure to the legal system (for example, a legal process being inaccessible or its outcome unfair).

We want to support lawyers to be able to recognise their client’s legal capability, and the extent to which they may also be experiencing vulnerability, so they understand what they might need to do to adjust or supplement their legal service delivery to act in their client’s best interests. For example, a client with lower legal capability might need more intensive support, extra time for discussion to understand their legal options or different communication methods – such as plain language and visual clarity in advice, or non-digital or assisted digital services.

Where lawyers can recognise and adjust their approach to better meet their client’s legal capability or vulnerability needs, both the clients and the lawyers themselves benefit.

Being better equipped to respond appropriately to their client’s needs:

• helps lawyers manage the relationship they have with their client – including setting and managing their client’s expectations and making sure they receive clear client instructions
• reduces stress associated with handling the matter
• helps lawyers reinforce the proper limits of their role, which may mean referring clients to other non-legal service providers for additional supports.

We encourage all lawyers to reflect on their client base and consider whether they would benefit from undertaking additional professional development to help them provide high-quality legal services to clients who are experiencing vulnerability, or who have lower legal capability.

Resources that can help

There are various training options available to lawyers wanting to upskill and improve their service delivery, including in the areas of trauma-informed and non-collusive practice, and in communicating with people experiencing vulnerability.

We have supported Women’s Legal Service Victoria to pilot the delivery of training for private practitioners on recognising family violence, and will be doing further work in 2026 to seek lawyers’ views on additional continuing professional development and training they think would be valuable for improving legal service delivery to their clients.

A particular focus on First Nations cultural capability

We encourage all Victorian lawyers to familiarise themselves with the Framework for First Nations Cultural Capability in the Legal Profession. This was developed by the Victorian Aboriginal Legal Service in partnership with Victoria Legal Aid and the Law Institute of Victoria, with funding from the Victorian Legal Services Board.

The framework provides the foundation for improving the experiences of First Nations peoples seeking legal services in Victoria, and for strengthening the likelihood of First Nations peoples achieving better justice outcomes. The vision of this framework is that First Nations clients are culturally safe, respected and empowered in all aspects of their engagement with the Victorian legal profession.

Lawyers can use the framework to:

• reflect on their own individual capability to provide culturally safe and appropriate legal services for First Nations clients
• understand in which areas of First Nations cultural capability they need to upskill and structure their professional development journey.

The framework will be supported by a best practice guide, and a foundational training package for all lawyers that will include specialised modules for relevant roles and areas of expertise.

This year new anti-money laundering and counter-terrorism financing (AML/CTF) obligations for the legal profession will come into effect. Australia’s existing AML/CTF framework has been expanded to cover the legal profession in recognition that lawyers provide services that are particularly vulnerable to being exploited by criminals who are trying to launder the proceeds of crime.

We remind law practices and lawyers providing specific designated services that they must enrol with AUSTRAC by 31 March 2026, and comply with new AML/CTF obligations that start on 1 July 2026. These obligations include:

• developing and maintaining an AML/CTF program tailored for the legal practice
• appointing an AML/CTF compliance officer
• establishing and maintaining customer identification and verification procedures
• reporting certain transactions and suspicious matters
• keeping records that comply with AML/CTF obligations.

It is crucial that lawyers who provide designated services understand the risk indicators and red flags for money laundering and terrorism financing. Wilful or knowing disregard of risk indicators and red flags is a matter that we will take very seriously.

We also remind lawyers of the related need to continue to comply with important Uniform Law trust accounting rules, including the obligation to have trust account records examined, and the obligation to report any actual or suspected irregularities in those accounts to us. Trust records must be maintained in a way that always discloses the true position of trust money received from, or on behalf of, any person, and be capable of convenient and proper inspection.

Resources that can help

To prepare for the start of the AML/CTF reforms, visit the AUSTRAC website, which has information about the reforms, guidance, eLearning modules and training. AUSTRAC has also produced specific risk insights and indicators of suspicious activity guidance for legal professionals.

The Law Institute of Victoria’s Law Institute of Victoria's AML/CTF Hub provides helpful resources and support for solicitors who provide specific designated services, and is regularly updated.

The legal profession’s increased reliance on digital communication, remote working and cloud services has made information technology a critical part of modern legal practice. However, using this technology comes with an inherent risk of cyber­crime – against which lawyers and law practices must take steps to protect themselves and their clients.

Cybercriminals are using increasingly sophisticated techniques to commit fraud, including using generative artificial intelligence to create targeted phishing campaigns (also known as spear-phishing) and to impersonate people with AI-generated voice and video calls (deepfakes).

Law practices are attractive targets for these criminals because of the large amounts of client information and money they hold. Even law practices that don’t handle high-value transactions can be targeted – cybercriminals may try to steal or block access to sensitive client information (for example, using ransomware) and use it to extort the practice or their clients.

Unfortunately, we continue to see cybersecurity breaches in Victorian law practices that could have been avoided if cybersecurity controls had been implemented and strictly adhered to. This includes important behavioural controls such as appropriately verifying payment details, not disclosing verification codes to third parties and avoiding email compromises by being cautious when clicking on links.

We remind principals of law practices of all sizes and practice areas that they are responsible for implementing relevant cybersecurity system and behavioural controls (proportionate to their practice size and level of risk), as set out in our 2024 Minimum Cybersecurity Expectations. This includes an incident response plan, which limits harm to clients if a cyberattack does happen.

All law practices should already have implemented the controls set out in the Minimum Cybersecurity Expectations that are necessary to practise law safely in the modern digital environment. These 'critical' controls are:

1. keeping software up to date on any device used for work, and turning on automatic software updates where available
2. using strong and unique passwords or passphrases for each of the accounts and devices used for work
3. turning on multi-factor authentication (MFA) or two-factor authentication (2FA) for all accounts and services used for work, wherever it’s available.

Training all law practice staff is key to avoiding cyber-attacks. Principals should ensure staff are regularly trained in how to detect phishing or social engineering attempts and other common threats, and how to use the law practice’s incident response plan if a breach does happen. Principals should also ensure that staff understand they cannot use shadow IT (unauthorised personal accounts and free tools) with any sensitive or client information.

Law practice principals should regularly review their cybersecurity measures and promptly address any identified weaknesses, including through system updates. Failure to do so may have serious consequences if consumer harm occurs – including regulatory and disciplinary action – as well as reputational implications for the law practice itself.

We remind all lawyers (and law practice staff) to read and follow our Red Flags and Good Practices in their work.

Lawyers who suspect that they, or their law practice, have experienced a cyberattack, must act immediately and follow their law practice’s incident response plan. If a plan isn’t available, follow the steps on our website.

Resources that can help

Our Minimum Cybersecurity Expectations set out the behavioural and system controls we expect law practice principals to implement. Our Red Flags and Good Practices resource sets out our expectations for verifying client instructions – lawyers must follow them whenever they receive instructions to transfer a client’s money, release sensitive information, or carry out another action that could otherwise expose the client to significant loss.

Our website has a step-by-step guide about what to do in the event of a cyberattack. Law practices should inform us of any breaches or near misses.

The Legal Practitioners’ Liability Committee has helpful cybersecurity resources for lawyers and law firms.

The Law Institute of Victoria's Cybersecurity Hub offers practitioners essential guidance and links to information to help maintain a cybersecure practice, and community legal centres can contact the Federation of Community Legal Centres for support.

Poor law practice compliance with costs disclosure obligations, and poor systems to manage costs disclosure, are features of many of the complaints made to our office.

This is a significant concern. The requirement for law practices to disclose estimated costs associated with a matter and to update those costs is particularly important for clients who do not use lawyers often, to help them understand the value of the services they are seeking. Giving transparent and up-to-date information about estimated legal costs allows clients to make informed decisions about whether and how to proceed with their matter and supports clients to have trust and confidence in their lawyer. It also benefits lawyers.

Our Legal Understanding and Lawyer Use (LULU) survey and Victoria Law Foundation and Monash University’s research on pricing practices in Victorian legal services showed that lawyer communication with clients about cost estimates is a major driver of client understanding and agency in the service relationship, and the requirement to provide estimated costs was seen favourably by practitioners as an important catalyst for ensuring that upfront conversations with clients about costs took place.

We remind lawyers not to attempt to use costs agreements to avoid meeting their obligations under the Uniform Law – including in relation to correct billing practices or making withdrawals from client funds held in trust.

We also remind lawyers that failing to properly disclose costs, or failing to provide disclosure at all, risks voiding their costs agreement (if there is one). Lawyers in this situation won’t be able to recover costs until they are assessed, or we have determined any costs dispute.

We take breaches of these obligations seriously and may take regulatory or disciplinary action in response.

Resources that can help

We acknowledge that providing appropriate costs disclosure is not always straightforward, particularly in complex matters.

Our website provides general information about lawyers’ costs disclosure obligations, and our Risk Outlook 2023 includes practical tips on providing compliant costs disclosure.

Victoria Law Foundation and Monash University’s research on pricing practices in Victorian legal services offers helpful information and examples of good costing practices.

Lawyers who need more support to comply with their costs disclosure obligations can apply to be part of our Costs Support Initiative. This is a free program that helps lawyers and law practices improve how they explain costs to clients and comply with their obligations under the Uniform Law. 

As in previous years, non-compliance with trust money obligations remains a serious concern. It is often associated with broader practice management problems within a law practice and, in the most serious cases, can lead to an external intervention into your practice.

We remind principals that they cannot delegate their responsibilities in relation to law practice trust accounts to other staff, for example, bookkeepers or practice managers. We also remind all lawyers:

• of the need to comply with rule 42 of the Legal Profession Uniform General Rules 2025 (General Rules) when withdrawing money from trust
• not to issue bills before legal work is substantially completed (as a way of avoiding maintaining a trust account)
• not to deal with trust money without authorisation
• not to deposit money that is trust money into general office accounts.

We also remind lawyers that they have an obligation to report all deficiencies or irregularities (or suspected deficiencies or irregularities) in a trust account to us as soon as is possible, using the trust account irregularity reporting form. Approved clerks, external examiners and banks also have a mandatory duty to report deficiencies or irregularities to us as soon possible, using the same form.

We expect strict compliance with trust money obligations. Non-compliance will be investigated, and further regulatory action in relation to a law practice (and disciplinary action against individual lawyers within the practice) often flows from such investigations.

Resources that can help

We encourage lawyers who are concerned about their practice’s approach to trust accounting or trust account management to seek help. Our website provides general information about managing trust accounts for both law practices and approved clerks.

The Law Institute of Victoria also provides a confidential trust consultancy service, Trust Consult, that can help lawyers to implement good trust management practices. To ask for advice or to book an appointment, contact trustconsult@liv.asn.au or call 03 9607 9447.

Law practice supervision

Law practice principals have important supervisory obligations. These obligations recognise that lawyers who want to run their own legal businesses are responsible for ensuring their staff deliver legal services competently and ethically.

Despite this, we encounter principals who fail to assume proper responsibility for the conduct of client matters in their law practice or exercise the required degree of oversight. For example, we continue to observe principals:

• failing to properly oversee the activities of employee lawyers, where the principal is unable to answer basic questions about the conduct of client matters, trust account activity or even identify and access relevant files – sometimes necessitating an external intervention
• allowing themselves to be named as the ‘legal director’ principal in incorporated legal practices, but relinquishing effective control and responsibility over the practice to non-legal directors – in direct contravention of the Uniform Law
• failing to properly oversee the activities of other principals in their law practice.

Supervisory failures of these kinds create serious risks for law practices, their employees and their clients. One significant risk is the potential exposure of clients to serious harm caused by incompetent, unethical or unqualified legal advice. Failure by the principal to fully understand what legal work is being done, and for whom, also heightens the risk that a law practice will be used by employees of the practice to facilitate fraudulent activity.

We remind all principals of their obligation to properly supervise their legal staff and any non-legally qualified individuals they employ. This includes:

• undertaking proper background and reference checks before hiring anyone
• making sure that employees are not given tasks that are outside their competence or, in the case of non-legal staff, that would amount to work that is required to be performed by a qualified lawyer
• making sure processes and policies are being followed, by auditing files.

We expect all principals to take necessary steps to ensure that the associates in their law practice, and all legal services provided by the practice, comply with the requirements of the Uniform Law, and rules and other professional obligations. A failure to uphold this responsibility can constitute unsatisfactory professional conduct or the more serious charge of professional misconduct – and for an unqualified person or entity, it can result in criminal prosecution.

Supervision of early career lawyers

Lawyers in the early stages of their careers need to be supervised by their more senior, knowledgeable and skillful colleagues who can support them to develop the foundational skills and attributes required for independent practice. This is why the Uniform Law restricts new lawyers from engaging in unsupervised practice for a period of 18 or 24 months.

Good supervision lays the foundation for good legal practice in the future, and a sustainable and fulfilling career. Unfortunately, we continue to encounter inadequate supervision arrangements. We have seen supervisees being given files well beyond their capability, or receiving too little instruction, guidance and oversight. We have also seen supervisees over-worked and expected to learn on their own.

Inadequate supervision of early career lawyers can lead to poorly trained professionals transitioning to unsupervised practice. Not only can this undermine their health and wellbeing, it can also result in poor outcomes for clients, impost on the court system, damage to a law practice’s reputation and unforeseen future costs, and a strain on the broader justice system.

We encourage employers to address the barriers to effective supervision that our research shows many supervisors experience. Supervising lawyers require support (including training and resources) to provide early career lawyers with the oversight and feedback necessary to enable them to provide quality legal services to clients, and develop the skills for independent legal practice.

We remind supervising lawyers that good supervision is regular, structured, formal and purposeful, and that it is not sufficient to simply sign off on work or have an ‘open door policy’. Particular care should be taken to ensure meaningful supervision if remote supervision arrangements are in place.

Resources that can help

We encourage principals who want to ensure they are meeting their legislative obligations to consider the Law Institute of Victoria’s Practice Management Consultancy Service (PMConsult). PMConsult complements the Law Institute of Victoria's practice support line, providing an additional layer of support via a confidential and complimentary one-on-one consultancy service. It’s designed to work with practitioners to strengthen areas of practice management and develop remedial action plans. PMConsult can be contacted by email at pmconsult@liv.asn.au or by calling 03 9607 9329.

For guidance about the kinds of capabilities early career lawyers need to develop during their supervision period, and practical resources to support effective supervision, we encourage lawyers to access our:

• Early Career Lawyer Capability Framework, which explains the capabilities supervisees need to develop before moving into independent legal practice
• Supervision Plan Template, which helps supervisors plan their approach to supervision, and assign appropriate work for their supervisees, in line with the Capability Framework
• Reflective Practice Template, which is designed to assist all lawyers – but particularly early career lawyers in their supervision period – to reflect on their professional experiences and development.

Other useful information about effective supervision of early career lawyers can be found on our supervised legal practice web page.