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Cite as: (2006) 80(9) LIJ, p. 24


There are signals which indicate when a legal practice is sliding off the rails and some early intervention can prevent a train wreck.

The full horror of a legal practice that has failed to function properly hits home when it is described as a train wreck.

The Law Institute of Victoria’s (LIV) Professional Standards general manager James Leach said that when the “train wreck” happened, the solicitor or solicitors involved were caught in a “horrible place”.

He has seen the impact of receiverships and experienced the drama of going into a practice and taking away a practitioner’s livelihood and, to some extent, their self-identity.

As a receiver, Mr Leach generally gets involved when the practice is irretrievable, and seeks to unpack the events that led to the wreckage.

Although only a few practices reach this stage of crisis – there are about five receiverships per year – it is a scenario he would rather not see enacted.

The preferred option was to see “trains” travelling through to their destination.

The LIV puts significant emphasis on the preventative approach.

Its services include regular seminars on strategies for effectively managing practices, a dedicated ethics department and just being available to answer questions and give advice.

Having worked as a sole practitioner and in small practices for almost 30 years before joining the LIV, Mr Leach has an intimate understanding of the problems inherent in running a practice.

Many difficulties associated with a failing practice begin because most solicitors who have decided to go it alone, or form a partnership, do so without having been taught anything about business management.

This lack of knowledge can be com-pounded by the many other pressures associated with running a small business, which can in turn lead to receivership being a distinct possibility.

Mr Leach said there were three main types, or reasons, for receiverships: death of a solicitor and no provision for anyone to take over the business; theft; and when a practitioner, because of illness, is unable to practise. The illness can be, and usually is, a psychiatric or depressive illness.

When illness is a factor, it is not usually something that has happened quickly; rather it has built up over a period of months or even years.

Mr Leach said the LIV often becomes aware of an issue only when staff call ,concerned about the practitioner’s erratic behaviour or because he or she has not been into the office for some days.

But he said under the Legal Profession Act 2004 a practitioner is required to disclose to the Legal Services Board (LSB) “any conduct or event which may reasonably be regarded as adversely prejudicing a practitioner’s ability to practise” according to the rules.

The Act also stipulates that if the LSB considers there are reasonable grounds to believe that a practitioner may have a mental infirmity, it can require a health assessment. A mental infirmity includes alcoholism and any drug dependence.

The most common profile of a practitioner involved in receiverships is a male aged 45 years and over who has been in practice for more than 15 years and up to 25 years.

Mr Leach explained that there is so much of the individual wrapped up in the practice which the practitioner sees as “his show” that all aspects of his life become affected, including family relationships.

Mr Leach said while some lawyers have had the experience of being so worried about their files they don’t want to go to work, in extreme cases where a receivership is inevitable, they have gone a step further and don’t turn up to work at all.

“In these instances, it is common for lots of files to be out of control, where the practitioner is just reacting to the most urgent files.

“In my experience these people have 20, 30 or 40 files blowing up.

“It’s got worse and worse and got to the point where the practitioner can’t face going in.

“By the time we go in things have been so neglected, time lines have passed, things are not organised, court cases have been listed for hearing and nothing has been done.”

He estimates that over the past 15 years there have been about five receiverships each year, with two out of each five described as illness based.

But he believes the numbers of solicitors who have had to drop out of the profession due to an inability to cope, could probably be doubled, particularly as the statistics don’t take into account the hidden figures of those who become ill and drop out of partnerships which continue without them.

While these numbers are relatively small compared with some 12,000 solicitors practising in Victoria, it is important for practitioners to pay attention to the warning signs which include putting off work and feeling overwhelmed.

Mr Leach said many practitioners feel that it is incumbent on them to do anything and everything that comes through their door in their unrelenting bid to be successful, and fail to act on early warning signs.

Legal aid work can be another burden because it does not pay enough and takes the practitioner away from the office for hours at a time, leaving less time to do other outstanding work.

Isolation, even within a partnership, is also a threat to a successful practice if areas of law are divided up between partners.

“For individual partners, if there is no one else doing the same sort of work they can’t talk to anyone about it,” he said.

There is also the situation where partners see each other as rivals and competitors.

Financial expectations of lawyers, and their families, can contribute to anxiety levels.

“People expect that because you are a lawyer you are very rich and you make lots of money and your family expects that too,” he said.

In reality, some 25 per cent of lawyers earn less than $50,000; 46 per cent earn less than $75,000; and a quarter of them are actively considering leaving the profession.

Adopting sensible and realistic work practices can make all the difference and the LIV is there to help – a message Mr Leach is keen to stress.

Services include psychological counselling available through the LIV’s LawCare and peer help from the LIV senior and junior counsellors’ service, along with assistance with business management from the LIV’s HR Information Advice Service.

The LIV’s new Careers in Law website, http://www.careers.liv.asn.au is a bonus for members with an array of business-related services such as HR advice and a locum register.

Another resource is the LIV’s latest publication The Successful Law Firm, which provides an excellent guide to effectively managing the complexities of a law practice.

An overworked practitioner can also take some of the pressure off by introducing a few simple measures such as:

  • build a trusting relationship with other practitioners;
  • be selective about work – don’t take everything and anything that comes through the door;
  • employ a locum and take holidays; and
  • build expertise in a few areas and refer other work.

Mr Leach cited the example of a practitioner who contacted the LIV for help because he was not well and therefore not coping with his practice.

“We went down on a Monday and by Wednesday he was in hospital,” he said.

Mr Leach said other practitioners in the area respected the solicitor enough to draw up a roster to keep his practice active while he was receiving treatment.

The solicitor was back at work within six weeks.

Mr Leach said the heartwarming story illustrated the critical nature of building up relationships with other practitioners who can be called on in an emergency or even in the normal course of business.

He said it also demonstrated how easily and effectively the LIV can assist members who recognise they are overwhelmed, and help them to maintain their practice.

“If people understand, can see some of the signs, they can avoid not just receivership but perhaps be happier lawyers,” Mr Leach said.

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