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Employment: Call for due diligence

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Cite as: December 2012 86 (12) LIJ, p.70

Legal practitioners have overarching obligations such as their duty to the court and to their client. Other obligations may be less well recognised such as the prohibition on employing people who are disqualified or have been found guilty of theft or similar offences without the Legal Services Board’s approval.

Law practices employ both legal and non-legal persons for positions within their practices. Lawyers and accountants applying for jobs would be expected to disclose their qualifications and any other relevant information related to the position. Law firms may however wrongly assume that this level of disclosure may not be required from all other employees. All persons employed by firms must disclose dishonesty offences or disqualification orders – first to the lawyer or firm employing them, then the employing firm must apply to the Legal Services Board (LSB) for approval. The LSB may grant approval with or without conditions.

Unless the LSB gives its approval, lawyers and firms must not employ a lay associate whom they know to be a person who has been found guilty of a theft or dishonesty offence (relevant offence) or is a disqualified person (s2.2.7 Legal Profession Act 2004 (Vic)) 1

Disqualified persons include a lawyer whose name has been struck from the Roll of Practitioners, or a person VCAT has disqualified because that person has been convicted of a relevant offence or behaved in a way that may result in VCAT disciplinary charges if they were a licensed lawyer. Contravention by the firm or lawyer employing the person is capable of constituting misconduct. Further, a disqualified person or a person found guilty of a relevant offence who does not disclose the disqualification or finding of guilt to the employer may be committing a crime (s2.2.7).

Incorporated legal practices also have obligations in respect of engaging disqualified persons in work. An incorporated legal practice is guilty of an offence if a disqualified person is connected with the practice (s2.7.21). This includes sharing law practice income with a disqualified person. The failure of a legal practitioner director to ensure compliance can amount to misconduct.

A disqualified person must not be a partner of a multi-disciplinary partnership (MDP), nor may a disqualified person be engaged or paid for by the provision of legal services by the MDP. Income derived by the MDP from the provision of legal services cannot be shared with disqualified persons (s2.7.49).

Case study: Application by a law practice to employ a lay associate

Mr Burns 2 was a sole practitioner in Springfield. He began pursuing his client, Marge, for a personal relationship. Marge rejected his advances, but he started threatening to lose her case. He exacted his revenge by breaking into her house and destroying her property. His law practice began to suffer, he failed to maintain proper trust account records and eventually the practice went into receivership. The Springfield Legal Regulator subsequently refused to renew Mr Burns’ practising certificate on the basis that he was not fit and proper to engage in legal practice, and brought an application in the Springfield Supreme Court to remove his name from the roll of practitioners.

The Court struck Mr Burns’ name from the roll and found that Mr Burns was unable to make sound decisions under stress and that his preoccupation with Marge conflicted with his professional duties, which contributed to his lack of fitness to practice.

Following psychiatric treatment Mr Burns moved to Victoria. Due to the striking-off of his name from the Springfield roll, he is a disqualified person in Victoria. Mr Burns sought employment as a law clerk at a local law practice, Homer & Associates, and disclosed his status as a disqualified person to the firm. The principal Homer believed that he would be a suitable person for the position and submitted an application to the Victorian LSB seeking approval to employ Mr Burns as a lay associate.

The LSB balanced the need for consumer protection against the firm’s application and Mr Burns’ submissions regarding his desire to work in a legal environment and the steps he had taken towards rehabilitation. The LSB ultimately approved the application on the condition Mr Burns work only in a secretarial capacity; undertake professional mentoring; be adequately supervised; have only incidental contact with clients; and the firm periodically report on his progress.

The LSB has approved a set of guidelines regarding prohibited lay associates, which are currently available on the Publications page under Policies and Guidelines on the LSB website at

MICHAEL McGARVIE is the Legal Services Commissioner and CEO of the Legal Services Board.

1. Section numbers in this article refer to the Legal Profession Act 2004 (Vic).

2. The case study outlined above is entirely fictional.


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