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Commissioner Update - October 2022

Commissioner update

In this issue:

  • Introduction from the Commissioner
  • Lawyer-Client Relationship Survey 2022
  • End of trust year takeaways
  • CPD audits
  • Cybercrime – stay protected
  • Introducing our Licensing and Complaints Division
  • New website resources available
  • The first PULS update from Victoria Law Foundation
  • What’s new at Law Library Victoria
  • LPLC alert for firms doing property conveyancing

Just over a year ago, we launched Australia’s first online tool for lawyers and others to anonymously report instances of sexual harassment by a lawyer or within a legal workplace.

We’ve since seen an increase in people reporting sexual harassment to us, and we have a number of investigations underway. Feedback from those who have used our online tool reveals it has made coming forward easier and created a safe place to tell their story.

The reporting tool is available on our website as part of our broader set of resources on sexual harassment.

Anyone, including legal support staff and clients of lawyers, can use the portal and all reports are reviewed by our dedicated Sexual Harassment Complaints Team. They are specially trained to deal with these matters and will guide people through their options, including making an anonymous report or a formal complaint, depending on their circumstances or preferences.

With the reporter’s consent we can consider a targeted compliance audit to assess how a firm is being managed and supervised. This is another way to achieve positive change within the workplace.

With end-of-year work functions and social events coming up, bear in mind that sexual harassment does not just occur in the office. Whether it happens inside or outside of the office, it is unacceptable and can constitute professional misconduct. Sexual harassment can cause significant distress and harm to those who experience and witness it, and undermines public trust and confidence in the profession. It corrodes the culture of the profession and can lead to good lawyers leaving the law.

With many of us returning to the office, and coming into the holiday season, it’s as important as ever to act appropriately and consider how your behaviour and comments can affect others.

We offer support and guidance to anyone who experiences sexual harassment, whether you are working in the legal sector or using legal services. We also have guidance to support you if you witness someone else being harassed.

You can access a video on how to use our online reporting tool below:

Fiona McLeay
Board CEO + Commissioner

Lawyer-Client Relationship Survey results 2022

As part of the 2022-23 practising certificate renewal process, we invited Victorian lawyers to share their recent experiences of providing legal services to their clients.

We thank all of the lawyers who participated in this survey, which we will use to inform our future work. We are also now in a position to share some of the results directly with you.

The survey was designed to capture lawyers’ perspectives on lawyer-client relationships to complement the information we regularly receive from legal clients through our complaints-handling function and other sources. The survey results have given us a more nuanced, deeper perspective on many of the factors that shape lawyer-client relationships – as well as insight into factors that may give rise to complaints.

The survey focussed on lawyers’ experiences of providing legal services to their clients, including key relationship issues and challenges. It asked lawyers to identify pressure points based on their experiences with a recent client (rather than their general experiences) – from the first client meeting through to costs disclosure and disputes.

One of the survey’s key findings was that more than 80% of respondents believed their clients were experiencing stress. Concerningly, more than half of the lawyers reported that their client was experiencing significant or extreme emotional stress. Work-related, financial and health-related stresses were also widely reported.

The wellbeing of clients provides important context for the other key survey findings. For example, respondents who experienced communication challenges with their clients most commonly reported this to be due to their client’s mental health at the time (50%).

Many lawyers reported experiencing challenging client behaviours, and the most commonly reported behaviours were rudeness (51%), hostility (42%) and aggression (29%).

Another key survey finding is that Victorian lawyers seek to proactively manage their client relationships. The majority of lawyers surveyed had set clear goals for their first client meeting, such as setting realistic client expectations (81%), understanding what was important to their client based on their individual circumstances (72%) and establishing a trusting relationship with their client (72%). Of those respondents that discussed costs before being retained, over 90% reported their clients to be engaged in these discussions. However, it’s worth noting that most lawyers took what might be described as a fairly passive approach to ensuring that their clients understood the costs disclosure.  The most common methods were advising their clients to read the costs disclosure and let them know of any questions or getting clients to sign the disclosure or costs agreement to acknowledge their understanding and consent.

While 35% of lawyers reported that there were no factors negatively affecting their working relationship with their client, the majority of lawyers stated that they struggled with various client relationship issues. The most common were clients’ unrealistic expectations about what could be achieved (55%) and difficulty in getting high-quality instructions from their most recent client (52%).

You can read more about the survey results on our dedicated webpage.

End of trust year takeaways

The 2021/22 end of trust year process has been finalised, with only a handful of lawyers still working with us and their external examiner to meet their obligations.

This process helps us make sure the trust money lawyers deal with is being handled and recorded properly.

This year, of the 2,157 trust accounts examined, 663 external examiner reports listed concerns around how law practices were complying with their record keeping obligations.

The main issues identified were:

  • Failure to send trust statements as soon as practicable after 30 June
  • Failure to report any irregularity or suspected irregularity in a trust account to us
  • Not having proper, up-to-date reconciliations of trust accounts.

In our experience, even minor issues with record keeping that aren’t addressed have the potential to cause major problems for both lawyers and their clients. If lawyers are unclear or unsure what their obligations are, or need support in meeting their responsibilities, they can contact the LIV Trust Account Support Service.

It was pleasing to see a significant reduction in the late lodgement of end of year trust forms compared to the last two years. We also saw an increase in lawyers and external examiners reporting they were either satisfied or extremely satisfied with the lodgement process.

We are continuing to work to further improve our processes before the next end of trust year.

CPD audits

This year the Law Institute of Victoria conducted CPD audits of 445 lawyers with a principal practising certificate, with results showing a dip in the level of understanding of CPD regulations and obligations compared to previous years.

This was based on the high volume of enquiries put to the LIV by lawyers about their CPD obligations. We also noted that CPD records, and particularly supporting evidence, was substandard or in many cases insufficient, requiring lawyers to resubmit their documentation.

To address these issues, the LIV will work with us to develop further guidance on CPD record keeping for lawyers, including examples of what is acceptable and unacceptable supporting evidence.  This will be developed in time to support the next annual audit and future education on CPD compliance.

Cybercrime - stay protected

Cybercrime is an ever-present threat to every law practice. Hackers and cyber criminals are on the lookout for vulnerabilities in your law practice, seeking to gain access and steal information and/or money from you and your clients.

It’s not just larger law practices that online thieves are targeting. Smaller firms and sole practitioners are also targeted as they may be less likely to have systems in place to block or detect hackers.

October is Cyber Security Awareness Month, and the Australian Cyber Security Centre is encouraging Australian businesses and individuals to stay safe online. November 7-11 is also Scams Awareness Week, and we are partnering with the Australian Competition and Consumer Commission to raise awareness about cyber safety among the legal profession and consumers of legal services.

We strongly advise all law practices – no matter their size – to take steps to boost their cyber security levels. Making simple changes like implementing two factor authentication, using strong passwords and adding a ‘call before you pay’ notice to your email footer are important first lines of defence. Lawyers should not exchange bank account details with clients on email without these protective measures in place. We will have more to say about this issue in upcoming updates.

Aside from the reputational damage you could suffer from a hack, you may face professional consequences if you fail to take any precautions to protect the security of your clients’ confidential information and money from thieves. There is already a growing expectation in the financial sector that companies be held accountable for cyber security failings leading to consumer losses, and recent events involving the Optus hack have reinforced this.

In the past, lawyers have been forced to take out bank loans to personally repay their clients’ trust account funds after they mistakenly transferred money to a hacker’s account, as the money wasn’t covered by the LPLC. Don’t be the next lawyer this happens to.

You can find information and resources on cyber security on the LPLC and the ACSC websites. Please make the time to look at what you can do to protect yourself and your clients.

Check our social media channels (LinkedIn and Twitter) for more information about protecting yourself and your clients from cyber criminals.

Introducing our Licensing and Complaints Division

Licensing lawyers is one of our key regulatory functions.

The VLSB+C division that looks after this work recently underwent a name change, from Enquiries and Complaints to Licensing & Complaints, to better reflect its role in managing practising certificate registrations and renewals - as well as the registration of entities.

The division also handles consumer and cost complaints, so the name is now more aligned with the energy and resources we put into these important streams of work.

We hope this change provides further clarity on our role to both consumers and lawyers.

New website resources available

We recently published new website content for lawyers on closing a law practice and information on unqualified legal practice for both consumers and lawyers.

Closing a law practice

This new page was developed to assist sole practitioners who are looking to close down their law practice. It clearly explains the steps that need to be taken to make sure the business is wound up correctly. It covers topics including notifying clients, dealing with work in progress, file management, trust accounts and more. You can read the content here.

Unqualified legal practice

Our second new page provides information on the important issue of unqualified legal practice. Written for both the public and the profession, it explains in clear terms what behaviour is considered unqualified legal practice, why it is a criminal offence in Victoria, and the consequences for this type of conduct. It also links to our Register of Lawyers so that the public can check to see if their lawyer has a current practising certificate. View this new page here.

The first PULS update from Victoria Law Foundation

We are enthusiastically following the progress of the Victoria Law Foundation’s study of the Public Understanding of Law Survey (PULS).

The VLF recently released a video series providing some background and updates on the study. In the first video update, Research Director Nigel Balmer explains the importance of understanding legal needs from a bottom-up rather than a top-down perspective.

This is important work that will be extremely useful in building the evidence base for a greater understanding of the challenges faced by Victorians with accessing justice.

What's new at Law Library Victoria

All eligible Victorian lawyers get free access to Law Library Victoria’s comprehensive digital collection – a well-curated mix of commentary, eBooks, journals and unreported judgments.

Useful resources are added all the time. Here are some of the latest:

  • The Laws of Australia a complete library of legal principles covering more than 330 topics and every Australian jurisdiction;
  • Victorian Courts practical commentary on legislation and case law, including forms, costs, practice notes, practice directions and key legislation for each jurisdiction;
  • Balkin & Davis law of torts – an authoritative discussion and critical analysis of common law and statutory torts across all Australian jurisdiction;
  • Transacting with trusts & trustees a discussion of current practice for legal opinions in the Australian market, offering suggestions for the wording of opinions, assumptions and qualifications involving trustees and trusts.

LPLC alert: Firms doing property conveyancing – be ready for a property transaction compliance audit

All lawyers who conduct property conveyancing can expect an audit from the Land Registry. It is important to remember that what you do in relation to obtaining client authorisation and verification of identity for property transactions is more than just ticking the box and needs to be done accurately and in accordance with the ARNECC guidelines.

LPLC have plenty of resources to help lawyers brush up on what is required including:

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