General Manager of Professional Standards Gareth Smith says the current requirements provide an important quality assurance safeguard for lawyers who are offering unsupervised services to consumers. “Most lawyers are well-equipped to maintain professional standards,” he says. “But occasionally a lawyer can cause significant financial loss or personal distress to a client through incompetent advice. Everybody loses in that situation. Any greater flexibility in the modes of practice available to lawyers must be balanced with appropriate mechanisms to protect consumers.”
The proposed freelance model would allow lawyers to provide services to the public in non-reserved areas – such as legal work outside of litigation - without requiring prior regulatory approval.
However the risk that was intended to be addressed by current practice on own account requirements in the LCA is illustrated by a recent Disciplinary Tribunal decision where a practitioner was suspended from practice for two years following a period in which she effectively practiced on own account in immigration law despite not being approved to do so, and failed to adequately and competently advise her clients.
Law Society complaints data shows that practitioners who are approved to practise on own account are overrepresented in complaints statistics compared with their proportion of the practising population. In the year to 30 June 2022, 72% of closed complaints handled by the Law Society were about directors, partners, sole practitioners, or barristers, but those individuals make up approximately 35% of the population of the legal profession.
Sufficient experience a consumer protection measure
The current requirement for applicants to have a certain amount of legal experience was introduced in 2012in response to quality assurance concerns associated with lawyers practising on own account with no experience or understanding of what was required. At the time this was a concern raised in the context of legal aid providers and barristers sole who were choosing to practise in that mode straight from law school.
Less legal work in New Zealand is covered by “reserved areas”
The Independent Review’s recommendation is based on the model in England and Wales. But the reserved areas of work in England and Wales are broader than in New Zealand. The impact would be that a wider range of practitioners in New Zealand would be able to undertake freelance work. Candidates for admission to the bar in England and Wales are also required to have two years’ relevant work experience in providing legal services including in contentious work. New Zealand does not have this requirement.
Removing regulatory barriers that are having a discriminatory effect
The Law Society supports the removal of genuinely discriminatory barriers to entry to the profession. There are initiatives that can be taken in respect of the process for seeking approval to practise on own account, such as modifying the experience requirement so that it does not unfairly impact those who have taken a period of time away from the profession for parental leave. The Law Society is also taking steps to make the process more efficient and consistent.
The Law Society also recognises the discriminatory barriers identified by the Independent Review Panel are not the only barriers to entry to the profession. Completing a law degree and finding suitable employment are often the most significant barriers for many young people who wish to become a lawyer.