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Self-assessment audits

We have adopted the self-assessment process that has been pioneered over recent years in New South Wales. We require legal practitioner director(s) to review their firm’s management systems and supervisory arrangements shortly after they give the Queensland Law Society notice of the firm’s intention to start engaging in legal practice as an incorporated legal practice.

We provide them with a pro forma self-assessment form which asks them to assess how effectively their management systems address ten key objectives of sound law firm management, viz.:

competent work practices to avoid negligence
effective, timely and courteous communication
timely delivery, review and follow up of legal services to avoid delay
acceptable processes for liens and file transfers
shared understandings and appropriate documentation covering cost disclosure, billing practices and termination of retainer
timely identification and resolution of conflicts of interests
appropriate records management
well understood procedures for authorising and monitoring compliance with undertakings
effective supervision of the practice and its staff, and
compliance with trust account regulations and accounting procedures.

The self-assessment form is an only slightly revised version of the form that has been used in New South Wales for some years now. It does however include an entirely new section which asks legal practitioner directors to provide us with information about the firm’s non-legal directors and their occupations, its shareholders and their relationship to the law practice, the number of lawyers it employs, its gross fee income and the nature of the services it provides other than legal services, if any.

That information aside, the self-assessment form asks legal practitioner directors to rate their firms’ management systems against each of the ten objectives on a sliding scale of 1 to 5. The form sets out some key concepts they should take into account in rating their systems and suggests some criteria they might take into account in rating their systems and some approaches that might help them improve their systems should they be less than fully compliant.

We don’t expect legal practitioner directors necessarily to rate the systems their firm has in place when they first receive the self-assessment form but the systems they have in place when they complete and return the form - we count the self-assessment process a success if it causes them to make improvements. The purpose of the exercise is not to catch anyone out but to help law firms develop and maintain management systems and workplace cultures that nurture and sustain best practice.

Certainly we hope and expect that legal practitioner directors will approach the exercise not as an administrative burden but as a positive opportunity to review their firm’s systems and to take stock. We want them to engage with the exercise and to candidly identify any gaps or shortcomings that require or might benefit from improvement.
We ask them to return the completed self-assessment form within three months and we will then review the information we’ve been given and decide what further action to take, if any.

There are two possible outcomes in the event that the Commissioner believes a firm’s systems continue to fall short of the mark after its legal practitioner director(s) has/have had a reasonable opportunity to make the necessary improvements.

We might decide to initiate an On-site review in order to better understand the problem and identify a remedial strategy. Alternatively, we might decide to commence an ILP investigation with a view to deciding whether to initiate disciplinary proceedings against the legal practitioner director(s) for unsatisfactory professional conduct, professional misconduct or an offence against the Act.

Similarly, we might decide to initiate an On site review or to commence an ILP investigation if an ILP fails to return a completed self-assessment form within the three month period or after an agreed and reasonable extension.