28 July 2023
In this issue:
- Introduction from the Commissioner
- Early results from our survey on supervised legal practice
- New guidance on professional boundaries
- To cover up or confess – the ethical choice is simple
- Get value from ethics CPD with these new resources
- Cyber security and trust accounts
- New online forms for lawyers handling trust money
- VLF grants now open
- Coming up at Law Library Victoria
- Catch up on the latest from LPLC
Introduction from the Commissioner
Improving access to justice is one of our key strategic objectives, along with improving legal practice and ethics, and protecting and empowering consumers of legal services. It’s the third pillar in our Corporate Plan 2022-24.
Many people may not realise the scope of our work in this area, and its ability to positively influence access to justice outcomes. We are a significant contributor to access to justice in Victoria through the work that we do, and the work that we support others to do.
We have three clear roles in access to justice; as regulator, funder and investor.
In recent months, we have been thinking deeply about how we can apply our knowledge, authority, and resources most skilfully to bridge the gap between those who can access legal help and those who cannot. We have developed, and are proud to share with you, our Access to Justice Policy Statement. It defines our strategic and long-term plans for supporting access to justice initiatives in Victoria. We will provide you with regular updates on the impact of our activities.
We also recently welcomed the appointment of two new lawyer Board members, barrister Sam Hay KC and solicitor Jacinta Lewin, and the reappointment of an existing lawyer member, Liz Harris.
Sam and Jacinta take the places of our outgoing lawyer Board members, Jennifer Batrouney AM KC and Geoff Bowyer, whose terms have now concluded. We thank Jennifer and Geoff for their service to the Board over a number of years.
Our Board’s lawyer members are now appointed by the Governor in Council on the recommendation of the Attorney-General. The Bar and the LIV provided a pool of suitable candidates to the Attorney-General to inform her recommendations. This change follows amendments to our legislation that took effect last year.
Find out more about our Board members and the appointments process.
Board CEO and Commissioner
Early results from our survey on supervised legal practice
During the recent practising certificate renewal period, we conducted an optional survey on supervised legal practice (SLP). No current Victorian research exists, so we decided to undertake our own to understand more about lawyers’ experiences with SLP in this state.
Thank you to the lawyers who responded to our survey – with your help we have a statistically significant sample to give us invaluable insights that will help us better support early career lawyers in their first years of practice. While a full analysis of the results is being completed, we can share some preliminary findings.
There were some pleasing results around lawyers’ professional skill development:
- Around 2 in 3 lawyers reported that SLP helped them develop the necessary skills for practice and helped them feel more confident in their abilities
- Nearly 2 in 3 participants were satisfied with how much time they spent meeting with their supervisors each week
- Encouragingly, many lawyers indicated that they were able to approach their supervisors for support with day-to-day tasks (75%) and professional and legal skill development (68%).
Nonetheless, the results do suggest some challenges remain:
- Only 37% of participants indicated they approached their supervisor for support to manage their stress and wellbeing. Furthermore, around 45% indicated that their supervisors rarely or never queried about their wellbeing or coping at work
- It was also concerning to see that 37.5% of participants reported that they experienced challenging behaviours from their supervisors.
We will share a full report of the results later this year.
New guidance on professional boundaries
One of the recommendations from the final report of the Royal Commission into the Management of Police Informants was to provide specific guidance to Victorian lawyers on maintaining appropriate professional boundaries. We have since consulted with the LIV, the Bar, the LPLC and Victoria Legal Aid to develop a series of new resources on the following topics:
- Why professional boundaries matter
- The link between professional boundaries and the professional conduct rules
- How to avoid boundary-compromising situations (and examples of high-risk scenarios)
- How to know if your professional boundaries have been compromised, and
- Where to go for further information and support.
This guidance is designed to encourage ethical behaviour, better protect the public, and promote community confidence in the legal profession. We encourage you to read these resources and consider how they relate to your own legal practise.
To cover up or confess – the ethical choice is simple
As a lawyer, not owning up to your mistakes when you make them has the potential to land you at VCAT.
Our Risk Outlook highlights unethical and improper conduct as a key area of regulatory focus for us this year. Whether the conduct is to protect a lawyer’s own interests or those of a client is irrelevant. Either way, it’s wrong.
One unfortunate trend we are seeing involves lawyers attempting to ‘cover up’, disguise or conceal an embarrassing mistake or negligence, rather than having difficult conversations with clients or employers and owning up to what they’ve done. Some examples of cover ups we’ve seen include falsely witnessing affidavits, forging signatures, and creating false documents and filing them at court.
While covering up a mistake may seem like an easy way out, especially when under extreme pressure or stress, it can negatively affect your client, your wellbeing and your career. It is also an unjustifiable ethical breach with potentially serious consequences.
Dishonest conduct obviously reflects on your fitness to practice. It can result in you being prosecuted at VCAT and/or losing your practising certificate. Recent prosecutions have seen lawyers reprimanded and dealt a range of penalties, from completing additional CPD or paying fines and costs to lengthy suspensions and even a strike-off from the Supreme Court roll of lawyers.
If a mistake is remedied properly and honestly, there may be no need for us to get involved. This means admitting to it, taking appropriate steps to correct or mitigate it, and if necessary, advising your client to seek independent legal advice. When in doubt, reach out to mentors or colleagues for guidance and advice, or seek professional assistance.
Whilst it takes a certain amount of fortitude to admit to mistakes, it is much better to address them head on. Doing so will help prevent small mistakes from becoming much larger ones.
Get value from ethics CPD with these new resources
We are pleased to share three new resources for early career, mid-career and senior lawyers, designed to help you get value from your continuing professional development (CPD) in the area of ethics and professional responsibility.
Each resource explores the factors that are relevant to good ethical practice. Inside you will find self-assessment questionnaires to help you reflect on and identify potential areas to focus on (according to your experience level) along with practical steps and opportunities to take your ethics CPD to the next level.
We created these resources in response to recommendations from our previous review of CPD arrangements in Victoria, which called for learning templates and guidance for delivering ethics CPD to lawyers.
We hope that by investing in your professional development and choosing ethics CPD activities that are relevant and helpful, you can get the most out of your CPD year.
Cyber security and trust accounts
Hackers and cyber criminals pose a significant risk to Victorian lawyers and their clients, which is why cybercrime tops the list in our 2023 Risk Outlook.
Lawyers need to take robust steps to protect themselves and their clients from fraudulent activity. We’ve learned that law practice trust accounts are being used to facilitate payments between victims and cybercriminals. Trust account abuse here is twofold, creating a layer of separation from the criminal and the victim, while giving the scheme an air of legitimacy.
As a recent example, we heard from a diligent lawyer who foiled this type of scam on his trust account. A new ‘client’ had contacted him via email and then deposited about $60,000 into his trust account. The lawyer noticed a series of red flags, such as misspelled names, different dates of birth on supplied documents, a questionable passport and a fake address. The lawyer realised the ‘client’ was not who they purported to be, and identified and made contact with the real owners of the money, whose email account had been hacked. The hacker had intercepted a legitimate transaction and changed the bank account details, then tried to launder money through the solicitor’s trust account. Happily, the money was able to be returned to its rightful owners.
When we spoke to the lawyer, he noted that he may not have detected the fraud if the documents had been better quality. The real owners would have lost their money. He also agreed that meeting a client in person or on a video call before accepting a retainer would help prevent this type of scam, and wouldn’t be too onerous a step to prevent such criminal behaviour.
Unfortunately, we know of other recent examples where lawyers have not been so vigilant and consequently have become involved in scams unknowingly. These have caused deficiencies in their trust accounts, which are ultimately the law practices’ responsibility.
How to avoid unwittingly facilitating a scam
Here are a couple of things we expect law practices to do to help prevent fraudulent transactions:
1. Know your clients
Always ensure that you know who you are acting for and have reliable and credible documentation to identify whoever is giving you instructions, especially when dealing with trust money. This includes:
- carefully reviewing original identity documents (i.e. the required 100 points of identity)
- meeting the client face-to-face (if not in person then at least via video).
2. Actively question the source of funds and the reasons money is being moved through the trust account
Unusual or unexpected activity could include misvalued transactions, ambiguity around the purpose of funds, or incoming monies from multiple sources. When it occurs, you should actively question and seek clarification from your client. If their answer does not satisfy you, consider whether to continue to act for them.
Finally, law practices should adopt policies and procedures for identifying clients and responding to unusual situations. We recommend the following Austrac resources for more information:
New online forms for lawyers handling trust money
If you are authorised to receive trust money, we’ve just made your job a little easier, with three new online forms to help you meet your obligations.
Opening or closing a trust account
When you open or close a trust account, you must notify us within 14 days. This can now be done directly in just a few minutes using the new forms on the opening a trust account and closing a trust account pages.
Before you close your trust account, you must ensure that you have transferred any remaining balance held in your statutory deposit account into the trust account. This transfer can be made through LSB Online and will help avoid unnecessary delays with disbursing the trust money.
Notifying us of a deficiency
If you find a deficiency or irregularity in any trust account or trust ledger, let us know without delay using our new reporting form. It doesn’t matter the size of the deficiency, or even if the trust account isn’t yours – you still have an obligation to tell us as soon as you become aware of any problem. The online form is the quickest and easiest way to do so.
VLF grants now open
Victoria Law Foundation (VLF) have launched their grants program for 2023/24, with an updated offering to help fund new community legal initiatives and projects. Check out their website for information about the different grants and how to apply.
Coming up at Law Library Victoria
Law Library Victoria invites all legal professionals to continuously improve their legal research skills by joining their upcoming free webinars on topics such as finding case law, interpreting Commonwealth legislation and tools for CPD training. You are welcome to attend as many webinars as you like.
In other exciting news, the Law Library website is undergoing some renovations to provide you with a better online research experience. If you would like to be an early test user, please let the Law Library know. Keep an eye out for sneak peeks and more details for when the website is launched in late-2023.
Catch up on the latest from LPLC
Our friends at LPLC have put together a series of short videos on the new Windfall Gains Tax to help lawyers understand the legislation and manage the associated risks.
All LPLC-insured law practices can also access a free online cyber course until 1 September. This one’s not just for lawyers either, with support staff like receptionists, finance clerks and legal executives all encouraged to complete the course.
Finally, consider subscribing to LPLC’s weekly risk management email, which offers a useful mix of topical articles, lawyer resources, events, updates and news.