Regulating Incorporated Legal Practices
The Legal Profession Act 2007 (the Act) establishes a framework for regulating the provision of legal services by incorporated legal practices (ILPs).It requires ILPs and the lawyers who work in them to meet the same standards of professional practice expected of all other lawyers and law firms but also imposes some new and additional obligations. Perhaps most importantly, it requires the legal practitioner directors of ILPs to keep and implement “appropriate management systems” which ensure that the ILP and the lawyers who work in them meet the same standards expected of all lawyers and law firms and to take appropriate action should they fall short.
It establishes both the Legal Services Commission (the LSC) and the Queensland Law Society (the QLS) as ‘relevant regulatory authorities’ and gives both organisations power to conduct audits to test whether an ILP has appropriate management systems in place and whether the ILP and its directors and employees are meeting their obligations more generally.
The requirement that legal practitioner directors of ILPs keep and implement appropriate management systems allows the LSC and the QLS as regulators to adopt new and innovative approaches to regulation.
We have agreed to work in a co-regulatory partnership and to adopt the ‘education towards compliance’ strategy that was pioneered in New South Wales. The idea is to move beyond the ‘spot check to catch them out’ auditing strategies that regulators have relied on in the past by engaging with ILP’s from and even before their inception and working with them to help them keep and implement management systems and workplace cultures that encourage and sustain best practice.
In particular, we have agreed that:
- the LSC will take primary regulatory responsibility, by undertaking a mix of ‘compliance audits’ and ‘ILP investigations’ - including by requiring every corporation that notifies the QLS of its intention to commence legal practice in Queensland to undertake a ‘self-assessment’ audit of its management systems and to report the findings to the LSC for further action as appropriate; and
- the QLS will undertake primarily a membership service role, by supporting ILP’s and law firms that are considering incorporation to comply with their obligations to have appropriate management systems – including by advising and assisting them before, during and after the self assessment stage how best to design and implement the kinds of management systems and arrangements that best suit their particular practice.
Importantly, the LSC and its counterpart regulators in NSW and Victoria have agreed to take the same ‘education towards compliance’ approach. Our intention is to ensure that there is not only a consistency of the law across our three jurisdictions, but a consistency in the ‘nuts and bolts’ of regulatory practice.
For more information about compliance audits, REGULATING ILPS: COMPLIANCE AUDITS.
For more information about ILP investigations, REGULATING ILPS: ILP INVESTIGATIONS.
For more information about the services provided by the QLS Website.
Download the ILP Initial self-assessment audit form in 
word format (250KB) or 
PDF format (263KB).
Last updated 7/04/2008 2:48:43 PM