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Compliance and audits

Compliance and audits

Law practices may trade as incorporated legal practices (ILPs) or operate as partnerships or multi-disciplinary partnerships (MDPs). Lawyers can also operate as sole practitioners.


Incorporated legal practices (ILPs)

An ILP is a corporation (typically within the meaning of the Corporations Act 2001) that provides legal services.

ILPs can provide other services, with some exceptions, in addition to legal services. An ILP must not conduct a managed investment scheme, or any other business or service prohibited by regulation.

Any corporation is eligible to be an ILP unless it is prohibited by an Act under which it is incorporated or regulates its affairs.

The Supreme Court of Queensland can also make an order disqualifying a person from being an officer or employee of an ILP, or from being engaged or paid to provide legal services on behalf of an ILP.

A corporation intending to engage in legal practice in Queensland must give written notice in the approved form to the Queensland Law Society (QLS) of its intention to do so before commencing.

Legal practitioner directors (LPDs)

An ILP requires at least one legal practitioner director (LPD).

LPDs and other legal practitioners providing services on behalf of an ILP have the same professional and ethical obligations as any other legal practitioner.

The Legal Profession Act 2007 (LPA) contains obligations for LPDs in addition to their professional obligations as legal practitioners. 

LPDs’ additional obligations

Under the LPA, some of an LPD’s additional obligations include:

  • implementing an appropriate management system that maintains the practice’s professional and ethical obligations
  • taking reasonable steps to prevent or remedy any misconduct by an Australian legal practitioner employed by the practice.

An LPD may also be liable for disciplinary action due to:

  • the conduct of an employee legal practitioner of the ILP
  • the conduct of another director that affects the provision of legal services
  • the unsuitability of another director to be the director of an ILP.

Appropriate management systems

Under the LPA, the LPD must implement an appropriate management system that maintains the practice’s professional and ethical obligations.

This system includes the practice’s:

  • formal and informal management policies, procedures and controls
  • work culture
  • habits of interaction and practice that support and encourage ethical employee behaviour.

Each management system will be unique to the needs and functions of the individual practice. 

There is no one best way to implement and maintain a management system.

LPDs must take reasonable steps to prevent or remedy any breach of the outlined standards.  

Multi-disciplinary partnerships (MDPs)

An MDP is a partnership between one or more legal practitioners and one or more people who are not legal practitioners.

An MDP may provide legal services in addition to other services.

A legal practitioner intending to engage in legal practice as a partner of an MDP in Queensland must provide written notice to the QLS.

Legal practitioner partners

A legal practitioner partner and any other legal practitioner who provide services on behalf of an MDP have the same professional and ethical obligations as any other legal practitioner.

The LPA contains obligations for a legal practitioner partner in addition to their professional obligations as a legal practitioner.

Under the LPA, a legal practitioner partner is responsible for the management of legal services provided by the MDP. 

A legal practitioner partner must:

  • implement and maintain an appropriate management system that allows the MDP to meet the same standards expected of any other legal practice
  • take appropriate remedial action where these standards are breached.


The Commission conducts audits to ensure incorporated legal practices (ILPs) have appropriate management systems in place. Our approach is collaborative and educational.

What the audits involve

We audit the compliance of ILPs (and their officers and employees) with the requirements of the LPA, the Legal Profession Regulation 2017 and the Australian Solicitors Conduct Rules 2012.

Our audits also consider how ILPs provide legal services and supervise their officers and employees.

We conduct two types of audits: self-assessment and compliance.

Self-assessment audits

Six months after an ILP notifies the Queensland Law Society that they’ll engage in legal practice, the Commission supplies a self-assessment questionnaire to the legal practitioner director (LPD).

This questionnaire addresses what the Commission considers to be three key objectives of sound law practice management to ensure that you are implementing an appropriate management system. These key objectives include communication, costs and supervision. 

Based on your questionnaire response, we may work with you to identify further necessary and practical improvements.

If changes or improvements are required, we’ll review after 12 months to check what progress has been made.

Compliance audits

The Commission conducts compliance audits to comprehensively review a law practice’s management systems, in whole or parts.

This resource-intensive exercise only occurs as needed—for example, when the Commission has reasonable suspicion that the practice (or parts of the practice) falls short of the expected standards.

These audits may comprise of:

  • surveys
  • policy and procedure review
  • interviews with LPDs, managers, staff, clients and relevant third parties
  • file reviews.

The Commission will draft an audit report with recommendations to remedy or improve systems. 

The LPD may respond to the draft report before it is finalised.