Services may be impacted at present as the Commission upgrades its Case Management System.
The terms 'partner', 'principal' and 'director' are to be used only by those entitled to do so. The Legal Services Commission (Commission) is becoming increasingly concerned with the misleading and improper use of these terms in describing legal practitioner roles.
The Commission acknowledges the invaluable input and consultation provided by the Queensland Law Society in the development of this regulatory guide.
The Commission reminds practitioners that under the Legal Profession Act 2007 (LPA):
While the term partner is not defined in the LPA, it is widely understood and traditionally accepted that a partner in a law firm is a senior legal practitioner who is an owner of the law firm and/or a non-equity partner who has decision-making powers or influence and is nevertheless a principal (a practitioner who holds a principal level practising certificate).
This understanding is supported by the many provisions of the LPA that ascribe responsibilities and obligations on partners and other designates. Further, section 7(4)(b) confirms that a partner in a law firm is a principal. Historically, partners of a law practice held a principal level practising certificate and, in the view of the Commission, that should continue to be the case.
The Commission considers that a legal practitioner who uses the term principal or partner to describe their role when they do not hold a principal practising certificate is inappropriate and does so in breach of the LPA and rule 36.1.2 of the Australian Solicitors Conduct Rule 2023 (ASCR). This is because doing so is misleading and/or deceptive, or likely to mislead and/or deceive consumers, colleagues and others about the legal practitioner’s practising rights, seniority and/or status within the law practice.
Additionally, the description of a legal practitioner as a partner in a sole practice or ILP is both misleading and inaccurate based on how these law practices are legally constituted.
Similarly, a legal practitioner who is not a director of the company which operates the ILP must not use the term director to describe their role. To do so would likely mislead or deceive consumers, colleagues and others into believing that the legal practitioner is a director of the company that operates the ILP, in breach of rule 36.1.2 of the ASCR.
Just as the legal term of partner suggests that there are statutory rights, responsibilities and restrictions that apply under the Partnership Act 1891, the legal term director also suggests that there are statutory rights, responsibilities and restrictions that apply under the Corporations Act 2001 (Cth).
Provided the recipient of the communication or representation of a person’s title is not left in any doubt as to the role of that person and any responsibility (or not) under the LPA, then the title may be appropriate.
A person who is a director of a company that operates as an ILP, who is not a legal practitioner (does not hold a practising certificate), may use the term Director to describe their role, if recorded as such with Australian Securities and Investments Commission (ASIC). However, such a director should clearly identify that they are not a legal practitioner or LPD, and do not have management over the provision of legal services by the ILP. On this point, directors and any other persons who are not legal practitioners are reminded of the offence under section 143 of the LPA of influencing a legal practitioner to contravene the LPA or the practitioner’s professional obligations.
By way of example, the use of the title Legal Practice Director, while not defined under the LPA, is so very similar to the defined term of Legal Practitioner Director and otherwise unclear as to the professional standing of that person, that the Commission considers it would be likely to mislead or deceive others.
While not endorsing any particular descriptions, an example of a title that is clear as to the qualifications or professional standing of a director who does not have any right to engage in legal practice, may include Non-Practitioner Director.
Similarly, legal practitioners who are directors of a company that operates as an ILP but are not principals (do not hold a principal practising certificate), may continue to use the title Director (if they are recorded as such with ASIC), but must clearly identify that they are not a principal or LPD. An example may include the title Non-Principal Director. This example would not be appropriate for a director who is not a legal practitioner, because while it states they are not a principal, it does not make it clear whether or not they are a legal practitioner.
Ultimately, any titles used in connection with the provision of legal services should not leave a client, another legal practitioner or any other person having to guess the qualifications or professional standing of the person using the title.
Fundamentally, the LPA ascribes the responsibility for the delivery of legal services on principals, through the operation of a number of provisions and defined terms¹ . The use of various tiles or role descriptions (whether or not they are defined terms under any law) can express or imply a level of authority.
Legal practitioners must ensure that the titles or role descriptions used by any persons in, or representing, their legal practice:
The title partner should only be used if the practitioner holds a principal practising certificate and practices in a law firm (not in a sole practice or under an ILP).
Legal practitioners should only describe themselves as Legal Practitioner Director or Director if they hold a principal practising certificate, practice under an ILP and are recorded with ASIC as a director of the ILP.
Partners, sole practitioners or LPDs may describe themselves as Principal, given that they are required to hold a principal level practising certificate.
It is important to ensure that you are familiar with the many terms that are defined under the LPA². Breaches of or inconsistency with any statutory instrument and/or this regulatory guide is likely to be considered a suitability matter under sections 9 and 46 of the LPA and may be considered as conduct for the purposes of Chapter 4 of the LPA.
Legal practitioners who are in breach of the LPA must rectify the error immediately and take steps to ensure that all roles within their legal practice are accurate and not able to be misconstrued or likely to mislead any other person. Appropriate management systems should be in place accordingly.
The Commission issues this regulatory guide to uphold the good standing of legal practitioners and protect consumers, colleagues and others from conduct that is misleading and/or deceptive, or likely to mislead or deceive, in the provision of legal services by the law practice.
¹ See for example LPA sections 7, 110, 148, 244, 701, Schedule 2 Dictionary.
² There are many defined terms under the LPA and are not confined to the Schedule 2 Dictionary. While not the subject of this regulatory guide, the improper use of the defined terms solicitor or barrister by someone who does not hold a relevant and valid practising certificate may be an offence under section 25 of the LPA.
