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, you must maintain a trust account with an approved authorised deposit-taking institution (ADI). 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.
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.
The following details of the account must be provided to the Society in writing within 14 days of opening any trust account:
- name of ADI and their BSB
- account name
- account number
- names of all persons authorised to operate the account
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.
At the end of each financial year, you must have your trust records examined by your external examiner as soon as practicable. 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
Practitioners can utilise a corporate structure for their legal practice in South Australia, by way of an incorporated Legal Practice. A completed Form G, together with payment of the prescribed fee ($30), must be received by the Society prior to commencing practice. Any corporation which engages in legal practice prior to lodging the form and paying the fee will be in default of schedule 1 clause 4 of the Legal Practitioners Act 1981. The consequences are:
- 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 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 South Australian practising certificate. There are a number of professional obligations imposed on all legal practitioner directors by Schedule 1 to the Legal Practitioners Act 1981 which you should read before considering commencing practice as an Incorporated Legal Practice.
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.
Interstate Practitioners Establishing an Office in South Australia
If you are an interstate legal practitioner and you wish to establish an office in South Australia, you need to provide notice and pay the prescribed fee within 28 days as required by section 23D of the Legal Practitioners Act 1981
and regulation 5 of the Legal Practitioners Regulations 2014
. The notice requirement is satisfied by completion of Form P
. The fee payable is $30.
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 and not through a corporate entity. Practitioners wishing to practice predominantly in South Australia must hold a South Australian practising certificate and establish or work for a law practice here so the interstate legal practitioner provisions will not apply. Corporate entities wishing to provide legal services in South Australia must comply with the requirements in Schedule 1 of the Legal Practitioners Act 1981
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.