In New South Wales, solicitors have various options for delivering legal services, including working as employees or in independent capacities. Solicitors frequently inquire with the Professional Support Unit about alternative practice arrangements beyond traditional employment with a law firm, company, or government agency, often prompted by job postings for consultant or independent contractor roles or consideration of locum work. This article examines compliance issues related to these different roles and titles.
This article examines how solicitors can work outside traditional employment, such as through roles like consultants, independent contractors, or locums. Many professionals wonder about these alternatives, especially when job listings use terms like ‘consultant’ or ‘independent contractor,’ or when considering temporary placements as a ‘locum.’ The discussion begins by clarifying what these roles typically involve. The Legal Profession Uniform Law does not define any of them.
A consultant could be either an employee of a firm or an independent provider, depending on how they deliver services and the agreement with the law practice. Independent contractors operate their own legal businesses, making their own decisions about service delivery without direct oversight from the hiring firm. Meanwhile, a locum is a solicitor who fills in for a limited time at a law practice, often to cover absences or handle specific projects where extra expertise is needed.
Choosing the Right Practising Certificate
In each of the above circumstances, solicitors need to assess which category of practising certificate (PC) is most appropriate. For solicitors who work in a private legal practice, there are two applicable categories of PC. A principal of a law practice is a person who practises law on their own account as a sole practitioner, a partner in a partnership, or a principal of an incorporated or unincorporated legal practice.
If a solicitor is employed by a law practice to provide legal services through the practice as an employee only, then they should hold an employee of a law practice PC and comply with the conditions of their PC. They cannot provide legal services on their own account. Solicitors employed as in-house counsel by a company should hold a PC in the category of corporate legal practitioner, while those employed by a government agency or authority should hold a government legal practitioner PC.
Whether someone is an ’employee’ is determined under employment law. The term ’employee’ is not defined in the Uniform Law. Generally, a person is considered an employee if their employer has a right to control how, where, and when they perform their work. An employee works for the benefit of the employer’s law practice, which invoices clients for the employee’s work. They receive a salary, superannuation contributions, and are entitled to statutory leave.
They must also have established and registered a law practice with the Law Society of NSW, and be covered by their own insurance. Typically, an independent contractor determines where and when they work. They work to advance their own business interests and provide legal services directly to a law practice or another client engaging them, issuing invoices for their work.
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As a solicitor needs to hold a PC in the category of principal of a law practice to engage in legal practice as an independent contractor, a person who still has Condition 2 (Supervised Legal Practice) or Condition 3 (Practice Management Course) on their PC cannot practise as an independent contractor. The question of whether someone is working as an employee or independent contractor is a question of employment law, which depends on the specific factual circumstances of the work and the engagement.
Contrary to popular belief, the following factors are not conclusive of whether a solicitor is an independent contractor. The fact that someone is given the title of contractor or consultant does not of itself determine that status. If a solicitor is required to provide a law practice with an Australian Business Number for remuneration purposes, this does not automatically mean that they are an independent contractor.
Understanding Professional Indemnity Requirements
Under s 211 of the Uniform Law, an Australian legal practitioner can only engage in legal practice in NSW if their legal practice is covered by an approved professional indemnity insurance policy (PII policy). If you are an employee of a law practice, your employer’s PII policy covers the legal services you provide through that practice. Corporate and government legal practitioners are exempt from holding or being covered by a PII policy.
On the other hand, if you are an independent contractor, you need to take out your own PII policy. Lawcover is the approved PII provider in NSW. Solicitors should consult Lawcover for guidance, though they must be aware that the Society’s checklist should not be used to determine employment status for the purposes of the Uniform Law and Rules.
If a consultant determines that they are an employee, then they can hold a PC in the category of employee of a law practice. However, if the consultant is also bound by conditions 2 and 3 on their PC, they can only engage in legal practice under supervision, and they cannot handle trust moneys or sign bills for the law practice. On the other hand, if the consultant determines they are an independent contractor, they must ensure they are authorised to practise as a principal. This means they must hold a PC in the category of principal of a law practice, work through their own law practice, and have that law practice covered by a PII policy.
Handling Ethical Obligations in Legal Practice
Whether you are working as an employee, independent contractor, or a locum, you should consider the ethical obligations in Rules 3, 4, 9, 10, 11, 12 and 36 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015. Be mindful of and understand how to comply with these Rules in any role you take up as a solicitor.
Notably, if you are working in two roles simultaneously, you must consider how to avoid conflicts of interest and maintain confidentiality between the two different entities. Solicitors who would like further guidance and support can contact the Professional Support Unit. PSU provides free and confidential guidance to solicitors in NSW who require assistance understanding their regulatory, ethical and professional obligations in legal practice.
