Chapter 4: Professional responsibility

Lawyers have a special responsibility to serve the needs of their clients. They also have responsibilities to the courts and to the legal profession. This section outlines the key responsibilities of solicitors in their relationship with clients.

The way in which lawyers should conduct themselves and their businesses in NSW is covered by the following sources:

  • Legal Profession Uniform Law (NSW) 2014 (LPUL)
  • Legal Profession Uniform Law Application Act 2014
  • Legal Profession Uniform Law Application Regulation 2015
  • Legal Profession Uniform General Rules 2015
  • Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (Conduct Rules)
  • Legal Profession Uniform Legal Practice (Solicitors) Rules 2015
  • Legal Profession Uniform Conduct (Barristers) Rules 2015
  • principles established by common law through decisions made in the courts
  • determinations by the Occupational Division of the NSW Civil and Administrative Tribunal (NCAT)
  • determinations made by the Legal Services Commissioner
  • Statement of Ethics.

The LPUL is the principal law covering solicitors and barristers in NSW. It covers a range of issues including:

  • practising certificates for solicitors and barristers
  • foreign lawyers in NSW
  • professional indemnity insurance
  • trust accounts
  • Solicitors Fidelity Fund
  • complaints and discipline
  • legal fees and costs.

The Professional Conduct and Practice Rules previously made by the Council of the Law Society of NSW under the Legal Profession Actare now contained in the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (the Conduct Rules) and the Legal Profession Uniform Legal Practice (Solicitors) Rules 2015.

The Conduct Rules supplement the requirements of the LPUL and function as a guide to the requirements of the common law. It applies to solicitors in regard to:

  • relationships with clients
  • duties to the court
  • relationships with other lawyers
  • relationships with third parties (eg, witnesses)
  • legal practice.

Competence and promptness

As set out in section 4 of the Conduct Rules, a lawyer must:

  • act in the best interests of a client in any matter in which the solicitor represents the client
  • be honest and courteous in all dealings in the course of legal practice
  • deliver legal services competently, diligently and as promptly as reasonably possible
  • avoid any compromise to their integrity and professional independence.

National legal profession reform

Increasingly, Australian lawyers and consumers operate in more than just one state or territory. The regulation of the legal profession in Australia has been unnecessarily complex, with up to 55 different regulators across the country creating different practices and processes in different jurisdictions.

In April 2009, the Council of Australian Governments (COAG) agreed on a plan to achieve national regulation of the Australian legal profession. COAG called for the appointment of a specialist Taskforce and Consultative Group to produce draft uniform legislation.

While the various jurisdictions had been working toward consistent national regulation, substantial differences remained. Following discussions between the Attorneys-General of the Commonwealth, New South Wales, Victoria, Queensland and the Northern Territory, the Commonwealth Attorney-General released the draft Legal Profession National Legislation in September 2011. Queensland withdrew its participation in the scheme in October 2012.

Ultimately, only NSW and Victoria have proceeded with the reforms. In December 2013, the Legal Profession Uniform Law Application Bill was introduced in the Victorian parliament and was passed by both houses of parliament in March 2014. Legislation applying the Legal Profession Uniform Lawwas then introduced into the NSW Parliament on 27 March 2014 and passed both Houses in May 2014. The legislation came into force in both NSW and Victoria on 1 July 2015.

The objectives of the reforms include:

  • promoting consistency between states in the law applying to the Australian legal profession
  • ensuring lawyers are competent and maintain high ethical and professional standards in the legal services they provide
  • enhancing the protection of clients of law practices and the protection of the public generally.

The new legislation is also intended to allow clients of law practices to make informed choices about the services they access and the costs involved; promote regulation of the legal profession that is efficient, effective, targeted and proportionate; and provide a co-regulatory framework within which an appropriate level of independence of the legal profession from the executive arm of government is maintained.

The legislation also establishes a Legal Services Council and Commissioner for Uniform Legal Services Regulation. The Council sets the rules and policy to underpin the Uniform Law, ensuring it is applied consistently across participating States. Existing Legal Services Commissioners and professional bodies continue to carry out complaints and investigation functions, grant practising certificates and provide professional development.

Other jurisdictions are encouraged to join the scheme and will be able to do so without the need for changes to the scheme.

More information, including the relevant legislation, is available from the Legal Services Council website.

Case study - poor preparation

A client was issued a Court Attendance Notice for Driving in a Manner Dangerous to the Public. The client told his solicitor that he intended to plead not guilty. At the time of engaging the solicitor, the client had a conference that only very briefly discussed the circumstances of the incident. After around eight months of adjournments, the matter was set down for hearing. From the initial meeting to the date of the hearing, the solicitor had not arranged a conference with the client. Importantly, detailed circumstances of the events were not obtained from the client and the client was not taken through the contents of the statement by the off-duty police officer who allegedly witnessed the client’s driving.

The solicitor arranged to have a conference with the client on the morning of the hearing. However, instead of conferring with the client, the solicitor attended another court to appear for a sick colleague, without informing his client. The client’s matter was called by the Court a number of times, but the solicitor was not present. The solicitor eventually arrived at the Court around midday.

In the hearing, the solicitor only asked 5-6 questions of the prosecution witnesses. After the evidence was heard, the Magistrate found the client guilty and sentenced him to six months imprisonment. The client engaged another solicitor and lodged an all grounds appeal to the District Court. The appeal was successful and the conviction was quashed.

In the judgment, the Judge made adverse comment about the solicitor’s preparation in the Local Court. The Legal Services Commissioner decided that the solicitor’s conduct in not sufficiently preparing for the client’s matter amounted to gross negligence and reprimanded the solicitor, despite the solicitor having no prior adverse disciplinary findings.

The Commissioner was concerned that, despite the evidence, the solicitor maintained throughout the investigation that he was adequately prepared. The Commissioner was also concerned that the solicitor knowingly accepted a concurrent engagement to appear for a colleague, after the solicitor made a personal assessment of the case load of the Court and decided that it would be otherwise occupied until the solicitor could attend.

The Commissioner’s view was that this practice negatively impacts on the efficient administration of justice as it is not the Court’s role to list and hear matters at the convenience of individual solicitors who choose to accept concurrent engagements. The Commissioner noted the difference if the solicitor was unintentionally delayed through misadventure or other reasonable personal circumstances.

The Office of the Legal Services Commissioner, Annual Report 2009-2010

Fiduciary duties (money)

Duty to account

It is common for a solicitor to hold a client’s money in trust while waiting for transactions to be settled (for example, sale of property). If your lawyer has property of yours in trust (including money), they have certain responsibilities. This is covered by the LPUL and the Legal Profession Uniform General Rules 2015 and includes the duty to:

  • hold the money exclusively for you
  • pay the money into a general trust account at an approved financial institution in NSW as soon as practicable (unless otherwise directed)
  • pay the money as directed by you (sections 137 and 138 of the LPUL).

If your solicitor will be holding the money for any length of time, it may be worthwhile investing the money in a ‘controlled money’ account where it will earn interest until it is required. Solicitors can only invest their clients’ money in a controlled money account if the client directs them to do so.

The Legal Profession Uniform Law Application Act 2014 requires that all solicitors who operate a trust account deposit all interest on the money in a general trust account with the Law Society on account of the Public Purpose Fund (previously the Statutory Interest Account). Payments are made from the Fund to Legal Aid, the Office of the Legal Services Commissioner, the Professional Standards Divisions of both the Law Society and the Bar Association, the Law & Justice Foundation, and community legal centres, and has the ability to make discretionary payments for community legal education.

Solicitors also have an obligation to keep records:

  • in the way specified by the LPUL
  • so that they accurately reflect the true position of trust money received on behalf of other people
  • in a manner which enables them to be conveniently and properly investigated (section 147).

Fiduciary duties

If a solicitor has property or money held for a client, there are certain responsibilities. These are called fiduciary duties. It means that they should avoid any conflict of financial interests. The Conduct Rules state that a lawyer must not:

  • allow a conflict of interest between themselves and the client, or
  • influence the client in any way which will benefit the lawyer (section 12).

The solicitor must not accept instructions to act for anyone in relation to property interests if they become aware that the person’s interests conflict with their own (or those of an associate).

Generally, solicitors are not allowed to receive substantial gifts from clients and are not allowed to draft a will or other document under which they receive substantial benefits (there are exceptions for members of a firm and immediate family). There are also certain guidelines if a solicitor acts as an executor of an estate (section 12.4).

Case study - loans to solicitor

The Commissioner began investigating a solicitor, Ms McKern, following a complaint by a former client alleging that Ms McKern owed him money. During the investigation it became clear that the solicitor owed money to other clients and 21 separate ‘loans’ to the solicitor totalling in excess of $1 million from 11 individual clients were discovered.

Before the NSW Administrative Decisions Tribunal, it was admitted that 20 of those ‘loans were improvident and contrary to lenders’ interests by reason of Ms McKern’s financial position at that time and her wilful or reckless failure properly to secure the loans adequately or at all but she nevertheless accepted the loans from the lenders without informing them of these matters and deliberately withheld them from them.

The remaining ‘loan’ was taken from an estate of which the solicitor was the executor and trustee, in breach of trust and without the knowledge or consent of the minor beneficiaries of the trust or their parents or guardians.

Borrowing from clients is contrary to Rule 12 of the (then applicable) Revised Professional Conduct and Practice Rules; and it was also admitted that the solicitor had misled the Legal Services Commissioner by stating (in writing) that she had only ever borrowed money from three clients.

A second count of misleading was also admitted. The solicitor misled a legal practitioner when she failed to disclose that money from a client had been used to her own benefit, and falsely advised that she had paid money into her former client’s bank account when that was incorrect.

An additional two counts dealt with the solicitor acting with a conflict of interests. In the first matter it was admitted she preferred her own interests over the interests of a client who was elderly and suffering from ill health and failing eyesight and was therefore in a particular position of vulnerability to exploitation by Ms McKern by reason not only of their solicitor/client relationship and the trust and confidence which he reposed in her but also because of his age and infirmity.

In a second matter, the solicitor created a conflict of interest between her own interests and her duty to her clients and preferred her own interests over her clients’ interests when, as vendor, lessor and lessee of a property, she also acted for the clients as purchaser and subsequent lessor.

The final count admitted by the solicitor was her failure to pay superannuation payments on behalf of 20 staff for a period of nearly two years.

In relation to all of the above matters a finding of professional misconduct was made and, as a result, the Tribunal ordered that Ms McKern’s name be struck from the Roll of lawyers.

The case reinforces the special relationship that exists between a solicitor and a client and the strict obligation of the solicitor to not take advantage of that relationship and to act at all times in the best interests of her clients.

Legal Services Commissioner v McKern [2008] NSWADT; reported in The Office of the Legal Services Commissioner, Annual Report 2009-2010.


Lawyers have a professional duty of confidentiality to their clients subject to conduct rules. Generally, they cannot be forced to disclose information which has been communicated for the purpose of giving or obtaining legal advice. There is also the client’s legal professional privilege. The principle of legal professional privilege is designed to promote the right of a client to communicate with a lawyer for the ‘dominant’ purpose of obtaining advice in relation to legal or administrative proceedings. It does not apply where it involves a criminal act or purpose. It is intended to create an environment in which clients will give a full and frank disclosure of all the circumstances of the situation. The information may be oral or in writing, but must be made for the dominant purpose of seeking or giving legal advice or for use in legal proceedings.

However, there are exceptions to this duty of confidentiality. Lawyers are required to disclose information where:

  • communication is made by the client to the solicitor for the purpose of being guided or helped in committing a crime, or
  • there is a duty under legislation or common law to disclose information (for example, search warrants).

Conflict of interests

Solicitors are required to avoid situations where their duty to one client conflicts with their duty to another (as distinguished from a conflict of interests between the solicitor and client). Generally, the rules of courts require that parties who are in conflict with each other have separate legal representatives. A conflict of duty can arise in a range of situations and works against the lawyer’s duty to use all the relevant information to further the interests of one client while maintaining the confidentiality of another. Conflict of duty issues can be a serious problem in country areas, where there is sometimes only one solicitor available and often results in one of the clients having to find legal advice in another town.

A conflict of interests can also arise in relation to a previous client. Solicitors have an obligation not to breach the confidentiality of a prior client. This can be a problem in large firms and because lawyers commonly move between firms. Some firms have developed the concept of ‘Chinese walls’, or ‘information barriers’ whereby procedures are established to prevent information held by one solicitor being communicated to others in the office.

Also, a solicitor should not act for a person if they themselves have a particular interest in a matter, which they could put before their duty to act in the best interests of their client.

Duty to the court

Lawyers have a duty to their clients and to the court and problems can arise when these duties are in conflict. As set out in the Conduct Rules, a solicitor's duty to the court and administration of justice is paramount and prevails to the extent of inconsistency with any other duty. Under the LPUL, lawyers are regarded as officers of the Supreme Court. However, lawyers also have an obligation to use all the available information to pursue the interests of their clients.

The lawyer’s duty to the court may result in appearing to be acting contrary to your interests. For example, a lawyer must refuse to call witnesses, even if you want them, unless they will advance your cause or damage the opposing case.

However, it is not the duty of a solicitor to correct an error made by an opponent or any other person in a court. If there is a conflict, the lawyer’s duty is to:

  • not wilfully or knowingly mislead the court as to the facts, and
  • not mislead the court as to the law.