Operating a Legal Practice
Establishing a new Legal Practice
There are four ways to practise the profession of the law in South Australia:
- As an employed practitioner:
o Employed in a legal practice; or
o Employed by an organisation that does not provide legal services (‘in-house’).
- As a sole practitioner or barrister;
- As a director of an Incorporated Legal Practice;
- As a partner of a partnership.
If you are establishing a new legal practice in South Australia, or a South Australian office of an existing interstate legal practice, and you will not practise using a corporate structure, you need to lodge a Form H. The details on that form are required for various regulatory purposes and also to enable the new practice to be issued with an L Code. The form must be lodged prior to commencing practice. You are also required to complete a Practice Profile for the purposes of insurance. That Profile can be downloaded here.
If you are commencing as a Barrister you need to lodge a Form F and a Barrister Practice Profile.
If you or your practice (in any form) receives trust money that is required to be deposited in a trust account, you must establish and maintain a general trust account in this jurisdiction with an approved authorised deposit-taking institution (ADI). The account type must be a Statutory Trust Account and the ADI’s currently approved are:
- Adelaide & Bendigo Bank
- Commonwealth Bank
- Macquarie Bank
- National Australia Bank
It is important to remember that there are requirements under Schedule 1 Part 2 of the Legal Practitioners Act 1981 which must be observed as well as those under the Legal Practitioners Regulations 2014. Importantly, in accordance with regulation 19(2) the name of the trust account must contain the name of the law practice or the business name under which the law practice engages in legal practice; and the expression “law practice trust account” or “law practice trust a/c”, unless the words “law practice” already form part of the name or business name of the law practice.
If you require assistance in relation to applying the trust accounting requirements, the Society holds regular Trust Accounting Courses. For information about those courses, click here. The Society also publishes a trust accounting handbook, which is available in soft or hard copy, here. Direct assistance can be obtained by contacting one of our Law Practice Compliance Investigators on (08) 8229 0229.
The following details of the account must be provided to the Society in writing within 14 days of opening any trust account by lodging a Form T:
- name of ADI and their BSB
- account name
- account number
- names of all persons authorised to operate the account
As soon as practicable after the end of each financial year, a law practice must have its trust records for that year externally examined by an external examiner appointed in accordance with the regulations.
A law practice should appoint a designated person as external examiner, allowing sufficient time in order to comply with the requirements of clause 34(1) of Schedule 2 of the Legal Practitioners Act 1981; and must provide written notification of the appointment to the Law Society, within two months of the appointment of the designated person as an external examiner, using Form J which can be downloaded here.
Only persons that are granted designated person status by the Society can be appointed by legal practitioners to conduct external examinations of legal practitioner trust accounts. They must agree to the appointment in writing. The Law Society maintains a list of the designated persons you may appoint as your external examiner. The current list is available here.
You are required to liaise with your external examiner to ensure that you provide as much information as the examiner requires to complete their report. The report must then be provided to the Society by the examiner as soon as practicable on or after 31 October following the financial year to which the report relates.
Incorporated Legal Practice
Legal Practitioners can utilise a corporate structure in South Australia (SA), by way of an Incorporated Legal Practice (ILP). Practitioners establishing an ILP in SA either as a single entity or alternatively in partnership with another ILP or legal practitioners or both, must complete and submit the following:
• Form G
• Practice Profile
together with payment of the prescribed fee ($30). This must be received by the Society prior to commencing practice.
Engaging in legal practice prior to lodging the form and paying the fee will be a breach of clause 4 of Schedule 1 of the Legal Practitioners Act 1981.
The consequences of such a breach are that:
• by operation of law, any fees charged by the company while in default are recoverable as a debt to the client (see clause 4(6) of Schedule 1); and
• the corporation may be liable to a fine of up to $50,000.
An incorporated legal practice is further required to participate in the Legal Practitioners Professional Indemnity Insurance Scheme. For information about the Scheme, click here
Every incorporated legal practice must have at least one legal practitioner director with a current unrestricted South Australian practising certificate.
Practitioners intending to be a Legal Practitioner Director (LPD) of an ILP are encouraged to familiarise themselves with the obligations imposed by Schedule 1 of the Legal Practitioners Act, 1981 prior commencing to practice as a LPD of an ILP.
Interstate Incorporated Legal Practices - Fly-in/fly-out
Interstate ILP’s wanting to engage in legal practice in SA on a fly-in/fly-out basis are required to provide notice to the Law Society under Section 23D and Clause 4 of Schedule 1 of the Legal Practitioners Act, 1981 by either;
a. Completing and submitting Form U , together with payment of the prescribed fee ($30) - to be received by the Society prior to commencing practice if planning not to operate a serviced office in SA.
b. Completing and submitting Form V , together with payment of the prescribed fee ($30) – to be received by the Society prior to commencing practice if operating a serviced office in SA.
(serviced office refers to utilising “unmanned” office space in SA for fly-in-fly-out purposes only)
Interstate Practitioners Establishing an Office in South Australia
Interstate legal practitioners who want to establish an office in South Australia should complete and submit Form P and pay the prescribed fee ($30) within 28 days as required by section 23D of the Legal Practitioners Act 1981 and regulation 5 of the Legal Practitioners Regulations 2014.
Please note that this only applies to practitioners holding an interstate practising certificate who wish to provide legal services in South Australia on a temporary or fly-in-fly out basis.
Practitioners who intend to practice predominantly in South Australia are required to a South Australian practising certificate and either establish or work for a law practice in SA, in which case the interstate legal practitioner provisions will not apply.
Closing a Legal Practice
If you close a legal practice, you must provide the Law Society notice in writing within one month of doing so. Notice can be sent simply by emailing Form Q
. If the practice held trust money, the trust records must continue to be externally examined for every financial year that trust money is held. Those reports must be provided to the Law Society. When all trust money is lawfully withdrawn and the account is closed, a final examination must be prepared pursuant to clause 37 of schedule 2 of the Legal Practitioners Act 1981
and provided to the Society.
Small Practice Kit
Members of the Society have access to a kit that provides in depth guidance and advice in relation to establishing a small practice. The kit contains guidance in relation to complying with obligations and minimum requirements, but also provides information in relation to varying ways of practising and comments on best practices.
The kit is available to Members here
. To find out more about becoming a member of the Society, click here
If you have any further queries, contact the Ethics and Practice Unit at firstname.lastname@example.org
or (08) 8229 0200.