Practice Management

A. The following steps should be followed:

Clients

Advise clients of the intention to transfer files, deeds and money to new solicitors unless they direct otherwise within a 14 day period. See Professional Conduct and Practice Rule 24.

A sample letter:

Regulators

1. Advise the Legal Services Board (section 6.2.24);
2. Advise the Law Institute of Victoria that you will / will not be renewing your practising certificate. If you intend to change your status to either corporate or not authorised to receive trust money obtain a variation form.
3. Advise the Legal Practitioners Liability Committee that you will/ will not be renewing your certificate and insurance.
4. Notify your external examiner.

Trust money

Prepare a trust reconciliation as at the date of sale and a Statement of Trust Moneys (SOTM). Forward a copy of the SOTM to the external examiner.

Request the Legal Services Board to deposit the balance of money in the statutory deposit into the practice’s trust account. When all money has been disbursed, request the bank to close the trust bank account.

Note: If all money has been disbursed then the external examination is a final examination under section 3.3.55.

• Lodge the final examination report with the Law Institute of Victoria;
• Lodge a statutory declaration with the Law Institute of Victoria in the prescribed form within 60 days after ceasing to hold trust money.

A. You are required to notify the Legal Services Board within 14 days of becoming aware of the change.

A.
Clients

Advise clients of the intention to transfer files, deeds and money to new practice unless they direct otherwise within a 14-day period. See Professional Conduct and Practice Rule 24.

Sample letter:

Regulators

Notify the following of your dissolution of partnership:

• The Legal Services Board
• The Law Institute of Victoria
• The Legal Practitioners Liability Committee
• Your external examiner

Include new practice names and addresses, and who will be holding files, deeds and trust money.

If it is intended that any partner will not be renewing their practising certificate, or intends to change their status with regards to the receipt of trust money, obtain a variation form.

Trust Money

Prepare a trust account reconciliation and Statement of Trust Money (SOTM) as at the date of dissolution and forward a copy to the external examiner.

All trust money must be disbursed to:

• clients, or
• the purchaser of practice, or
• other practitioners, or
• Unclaimed Moneys

Close the trust bank account.

Note: Completing the process of transferring all client money and closing of the trust bank account ought to be completed within 30 days of the date of dissolution.

Arrange for the examiner to lodge the final examination report with the Law Institute of Victoria.

• The examination must be carried out within 60 days, and where the account remains open with funds, further examinations are required annually on the anniversary date of the change.
• A section 3.3.55 statutory declaration is also required to be lodged within 60 days after the closure of the trust bank account. The statutory declaration is prescribed in the regulations as Form 31.
• This is in addition to the final examination report.

A.

Clients

Advise clients of the commencement date of the new practice and your intention to transfer files, deeds and money to the new practice.

Regulators

Advise:

• The Legal Services Board of the partners, employees, new trust bank account details and external examiner of the new law practice.
• The Practitioners Information Centre at the Law Institute of Victoria of the partners, employees, new trust bank account and external examiner of the new law practice.
• The Legal Practitioners Liability Committee of the partners and employees of the new law practice.

Trust Obligations

New practice

• A new trust bank account is opened in the name of the new practice.
• The account name is to include the name of the law practice, or the business name under which the law practice engages in legal practice, and “law practice trust account”.

Old Practice
Section 3.3.55 requires that where a law practice ceases to be authorised to receive trust money, a final examination is required. The examination must be carried out within 60 days.

• Where the account remains open with funds, further examinations are required annually on the anniversary date of the change
• This continues until the bank account has a nil balance and is closed.
• Each of the old practices prepares a trust account reconciliation and Statement of Trust Money as at the date (of ceasing to be authorised to receive trust money) and forwards a copy to their external examiner.
• Arrange for the external examiner to lodge the final audit report with the Law Institute of Victoria.

Note: If all trust money (including investments) has been disbursed then the examination is a final examination under section 3.3.55.

A section 3.3.55 statutory declaration (Form B1) is also required to be lodged by the law practice within 60 days after the closure of the trust bank account. This is in addition to the final examination. Lodge the declaration with the Law Institute of Victoria.