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How the legal profession might be re-imagined

13 Oct 2022

| Author: Jenni McManus

Lawyers don’t want or need an independent regulator. The job should be done by the New Zealand Law Society, but NZLS must first relinquish its representative role as an advocate for the profession to avoid actual and perceived conflicts of interest. Triage is needed for the complaints process which is broken and not fit for purpose. And any move to incorporate the Treaty of Waitangi into the Lawyers and Conveyancers Act is likely to be divisive and have unintended consequences.

These are among the key submissions made by ADLS committees to the independent panel which has been tasked with a wide-ranging review of the profession. Fourteen of ADLS’ 18 committees devoted at least part of their monthly meetings to discussing a consultation paper released mid-year and their responses were collated into a single submission.

In particular, the committees were asked to consider whether there should be an independent regulator for the legal profession, how to promote diversity and whether the corporatisation of law firms should be permitted.

Police or advocate?

On regulation, the committees’ biggest concern is the potential for conflicts of interest between the regulatory and membership representative functions of NZLS. They say NZLS hasn’t been performing in its role as an advocate for lawyer members and this function should be picked up by the growing number of lawyer membership organisations, “many of which have demonstrated their ability in promoting the interests of their members and meeting their expectations as an independent voice of law without the burden and constraints as a regulator”.

The committees were unanimous on this issue. There is confusion as to whether NZLS is the police or an advocate and there is a perception that the model is skewed disproportionately towards the regulator role. This reduces NZLS’ ability to make submissions to Parliament on bills and to other government agencies on relevant matters.

Most committee members agreed, however, that there was no need to establish a new, independent regulator. One committee said it would be undesirable for the government to make such an appointment as the legal profession plays an important role in the doctrine of separation of powers, where lawyers are officers of the court and are required by statute to uphold the rule of law. Litigators often need to advocate for their clients in positions against the government, the committees said. “Any regulation must respect the constitutional role of lawyers as being independent from the government.

“Having a new, independent regulator, likely with members appointed by the government of the day, may impede the ability for lawyers to fearlessly uphold the rule of law, challenge the government and as a result diminish access to justice. Indeed, any arrangement other than the legal profession self-regulating may lead to such an unintended perceive and/or actual outcome.” Self-regulation did not mean going soft on practitioners, the submission said.

Complaints

The current model is not working, most committees found. Major issues include the way fees disputes are handled, with a potential finding of unsatisfactory conduct, and extensive delays in resolving matters because of inadequate resources. Another problem is the volume of fictitious complaints which consume the energy of practitioners over extended periods of time.

The ADLS committees support the introduction of a triage system to screen complaints at an early stage. For fees disputes and other simpler matters that don’t question a practitioner’s fitness to practice, alternative dispute resolution methods are suggested.

Some members want to restrict complaints to only those with a client-solicitor relationship to avoid the process being used tactically. For example, beneficiaries of an estate can file a complaint against a law firm acting as executor and a self-represented litigant in a relationship property matter can file a complaint about the other party’s lawyers. “This is often done for tactical rather than genuine reasons, with the complainants aiming to protract the issue, causing a great deal of stress for law practitioners in the hope of extracting concessions to avoid a prolonged matter.”

One committee recommend the complaints service be widened to include non-lawyers providing legal services. Another identified as a concern the lack of support for junior lawyers facing complaints made against them.

There was a resounding ‘no’ from all committees on the issue of establishing an independent body to investigate and resolve complaints. The legal profession is unique, they say, with circumstances, obligations, requirements and an operating environment that was not always understood by lay people. “There is no issue of bias with the current complaints model where complaint outcomes are determined by professional peers,” the submission said.

“There is motivation for lawyers to maintain the standards and integrity of the legal profession. Currently, the National Standards Committee can receive complaints of a more serious nature and exercise a satisfactory degree of independence in those situations.” Two committees supported the restorative approach, incorporating tikanga, alongside mediation, to be considered as a tool to resolve less serious complaints.

Treaty of Waitangi 

Only two committees discussed in any depth a proposal to incorporate the treaty into the Lawyers and Conveyancers Act. They had very different views. One committee did not support explicit references to the treaty within the Act. While it is an important part of New Zealand’s legal framework, the treaty is not superior law. So, it is not principled to isolate a single component of New Zealand’s largely unwritten and non-entrenched constitutional framework as worthy of being held above all other components.

There is little practical benefit for inserting a specific reference to the treaty when lawyers already have a statutory obligation to uphold the rule of law which, in New Zealand, includes the principles of the treaty.

Further, they say, there has been no legal or social consensus about the definition of these principles. “Incorporation of such into the Act is considered a legally wrong move.” In fact, incorporating into the Act a legally undefined term that was open to very different interpretations was “a dangerous move” and the risk “significantly outweighed the benefits of such virtue signalling”.

The other committee said the treaty should be acknowledged in the Act insofar as it aligns with the Te Ao Marama work being implement by the Chief District Court Judge, providing there is a consensus on a method or roadmap about how such incorporation would be done. It should also be subject to the release of details and extensive consultation. This committee acknowledged that Te Ao Marama had considerable support within the senior courts.

Alternative business structures

The views among the committees were mixed on the issue of allowing non-lawyers to own, manage and invest in law firms. Even within individual committees, it was sometimes difficult to achieve consensus.

Those opposed to such a move said they were worried that non-lawyers would not fully understand the professional obligations expected of lawyers and that commercial imperatives from the owner of a law firm could place lawyers with no (or minority) equity interests “in difficult, challenging or even compromising ethical positions”.

One committee suggested that non-lawyer owners could be forbidden from becoming involved in the operational decisions of the firm and directorships could be restricted to lawyers. But some committees were open to exploring the idea of alternative structures. One said the current options to raise capital within the legal industry were dysfunctional and inefficient.

Another practitioner, described as “very senior”, said the significant level of capital investment required, particularly in technology, meant the current ban on non-lawyers in law firms was outdated. “Other professions, such as accountants, have evolved with the times,” the submission said.  Another committee member was interested in the option of listing law firms on the NZ Stock Exchange and raising funds by issuing debentures.

Others noted the de facto approach in multidisciplinary practices such as PwC with PwC Legal and EY with EY Law, where the law firms exist as separate entities. But only one committee supported the idea of allowing multidisciplinary practices for lawyers.

The main concern is that multidisciplinary practices often have profit-maximisation as their main aim. “This can conflict with law practitioners’ professional obligations and put lawyers in a difficult, compromising position.” But the committee that took a different view and is open to the idea of multidisciplinary practices sees huge synergy with law and accounting firms. Without multidisciplinary practices, this committee warned, some niche and technical areas of practice, such as tax law, could face succession issues in 20 years’ time.

Diversity 

The submission said further study is needed to fully understand why junior female lawyers are leaving the profession in the early stages of their careers. This has led to a gender bias of 7:3 (male to female) at advanced levels of practice.

The committees also noted cultural change was needed within the profession and the courts to make legal practice more inclusive and family-friendly. “This may involve specific/targeted cultural and diversity training, an awareness of how timetabling decisions in the courts and tribunals may impact on practitioners with family responsibilities and an increased adoption of AVL/ VMR as opposed to requiring counsel to appear in person.” ■

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