Commissioner update

In this issue:

• Our office will be closed from 23 December
• Cybersecurity case study: Why it's important to take action now
• Removing the supervised legal practice condition from your practising certificate
• Announcing our grant recipients for 2022
• Dealing with trust money
• Law Library Victoria professional development resources
• LPLC alert: New Windfall Gains Tax - What lawyers need to know now
• VLF Community Legal Grants now open
• Risk Management Tips for a safe finish to 2022

Part of what makes an effective legal regulator is a willingness to listen and learn from the people who do this job in other jurisdictions. It was therefore with open ears and an open mind that I attended the International Conference of Legal Regulators (ICLR) in Chicago in October.

We share many of the same priorities as our counterparts overseas – a testament to the global forces shaping the way lawyers work today. As a consequence legal regulation is changing too. From that perspective, ICLR is a valuable forum in which to explore new ways of doing things.

The program covered a lot of ground. Sessions touched on everything from money laundering to the use of technology in law and the post-COVID shift to hybrid work.

Among the most discussed topics were mental health and wellbeing. Regular readers will know lawyer wellbeing has been a key area of concern for us since we conducted our 2019 study. More recently, my July update included some useful resources to help promote a balanced workplace culture and set yourself up for a long and healthy legal career.

We are not alone in seeing worrying rates of stress, anxiety, and alcohol and drug dependence among lawyers. In Canada, for example, a major survey of legal professionals has revealed 59% experienced psychological distress, 56% experienced burnout and 29% experienced moderate to severe depression.

Statistics like this raise alarm bells that can and should spur greater action. We will be looking closely at the recommendations coming out of the Canadian study. If there are solutions we can potentially adopt here in Victoria, you can be sure we will give them serious consideration.

With the holiday season upon us, I encourage you to prioritise your own wellbeing and enjoy a well-earned break if you can. You’ll find some tips from LPLC in this edition to help put your mind at ease ahead of any planned office closures. You can then start the New Year feeling refreshed and ready to perform at your best.

I wish you a safe and relaxing summer with family and friends. See you in 2023!

Fiona McLeay
Board CEO + Commissioner

Our office will be closed from 23 December

Our office will be closed from 5pm on Friday 23 December and will reopen on Monday 9 January.

LSB Online will remain available, however we will only be attending to urgent enquiries, requests or applications over this period.

Please use the lawyer enquiry form to lodge any queries.

Cybersecurity case study: Why it's important to take action now

In our October Commissioner Update, we talked about the importance of law practices taking steps to boost their cyber security levels. Cybercrime is an increasing threat to lawyers and law practices. You have a positive duty to safeguard against such threats. Failure to do so may have serious consequences.

We have recently made our first unsatisfactory professional conduct (UPC) determination in this area.

The law practice was engaged to assist a client with conveyancing in relation to the sale of a property. The law practice was subject to a business email compromise. The breach of email security was identified by the law practice prior to the cyberattack and was preventable. The attack resulted in the loss of approximately $400,000 from the client, which was subsequently reimbursed by the bank.  

The principal of the law practice failed to:

• take appropriate cybersecurity action in response to the identified breach, including updating server and email passwords and existing malware/virus programs;
• verify the accuracy of bank details provided for settlement via phone or in person;
• take an appropriate response following notification from the client that the funds had not been deposited into the correct account; and
• take appropriate steps to reduce the risk of cybercrime in the first place.

The lawyer was found to have engaged in unsatisfactory professional conduct and was cautioned.

Take action now to ensure your cybersecurity is consistent with best practice. As a starting point, here are four things you can do now. More information about the risks and expectations is available from the LPLC and ACSC.

Removing the supervised legal practice condition from your practising certificate

If you have recently applied for your first Victorian practising certificate it will have a condition on it stating that you can only engage in supervised legal practice. This condition will remain on your practising certificate until you apply to have it removed. You can’t practice unsupervised or supervise another practitioner until your certificate no longer carries the supervision condition. Have a look at the conditions section of your practising certificate to check whether you are subject to supervision.

When you can apply to have the condition removed depends on how you were admitted to practice. You can apply to have the condition removed after 18 months if you completed practical legal training (articles of clerkship). If you completed a practical legal training course you can apply to have the condition lifted after 24 months.

If you have applied for your first Victorian practising certificate after engaging in legal practice overseas for two or more years you may be eligible for an exemption from the supervised legal practice condition.

If you are uncertain how much supervised legal practice you have completed, a calculator is now available on our website to help you work out the total period you have completed.

If you have met these requirements and are ready to have the condition lifted, submit an application via our lawyer enquiry form. Your application will need to be in the form of a statutory declaration with a letter from your supervisor/s for the relevant period.

Helpful resources including supervised legal practice guidelines, the calculator, and application templates can be found in the New Lawyers section of our website.

Announcing our grant recipients for 2022

Earlier this month we announced the 16 diverse projects to receive funding in our 2022 grants round. We have awarded $4.8 million in total, representing a significant investment in improving access to justice for all Victorians.

Some projects offer practical solutions to address entrenched problems requiring our urgent attention, such as the over-representation of Aboriginal children and young people in the youth justice system. Others will help vulnerable people to deal with legal issues affecting their everyday lives. There are also projects that seek to build the evidence base for future reform.

Our grants program acknowledges the important, passionate and tireless work of community legal centres and other grassroots organisations. They are the ones leading change with their vision for fairer, more accessible justice in Victoria, and we are proud to support them.

Read the full announcement for more on the funded projects.

Applications for our 2023 grants round are now open.

Dealing with trust money

There are strict obligations on lawyers who undertake legal services that involve receipt or control of trust money. We have noted an increase in law practices exhibiting a lack of understanding about what trust money is and how it should be dealt with.

Trust money is money received in the course of, or in connection with, legal services. This includes:

• money received for legal costs in advance of providing legal services;
• money subject to a written direction to deposit into an account controlled by the law practice;
• money received by a law practice subject to instructions to pay or deliver to a third party, other than an associate of the law practice; and
• money received by a law practice that is subject to a power exercisable by the practice to deal with that money for, or on behalf of, another person.

In Victoria, only lawyers who are authorised to deal with trust money can receive any money subject to the above definitions.

Our grant of trust authorisation policy explains what is required in order to obtain authorisation to deal with trust money.

Compliance with these well-established trust accounting requirements of the Uniform Law is paramount to secure important consumer protection.

If you are looking for specific advice about your obligations, the Law Institute of Victoria has implemented a consultancy service specifically to assist and support law practices in dealing with trust money. You can contact them via email at: trustconsult@liv.asn.au.

Law Library Victoria professional development resources

Now is a good time to top up your professional development. Law Library Victoria provides legal research training content that can be completed at your own pace, including:

• CPD Legislation and Case Law research units
• Instructional videos and webinar recordings
• a Research Refresher webinar in January 2023 (with full events calendar coming soon)

Training content is free with a Law Library login, so be sure to register.

Also check the Law Library website for opening hours over the Christmas/New Year break.

LPLC alert: New Windfall Gains Tax - what lawyers need to know now

The new Windfall Gains Tax (WGT) will potentially impact real estate transactions that law firm clients enter into now, if those transactions relate to land in Victoria that is rezoned on or after 1 July 2023.

To help lawyers understand the new tax and alert their clients in a timely way, LPLC has produced a detailed alert and a high-level summary fact sheet that identify the key aspects of the tax, risk management recommendations and measures that you can implement now to avoid any surprises later.

For a deeper dive into WGT, watch LPLC’s recorded webinars: Windfall Gains Tax — Beware the Sleeping Duties (recorded 23 March 2022) and Windfall Gains Tax is Here — Understand it and Act Now (recorded 15 November 2022).

For all of these resources and more go to LPLC’s WGT information hub.

VLF Community Legal Grants now open

Applications are now open for Victoria Law Foundation’s (VLF) Community Legal Grants for 2022/23.

Community Legal Grants offer up to $20,000 for projects supporting people in Victoria to better understand civil legal issues or helping to navigate the Victorian justice system.

Applications are open to community legal and not-for-profit organisations to fund community-based projects that meet a demonstrated legal need

Find out more on the VLF website.

Risk Management Tips for a safe finish to 2022

The lead up to the holiday season is demanding, with client and court deadlines to meet and increased commitments outside of work. In the last-minute rush to the end-of-year closedown, important risk management measures can be overlooked. To help avoid unwelcome surprises when coming back to work in 2023, LPLC has put together its top six actions to take before closing the door on 2022.

1. Check and diarise critical dates

Review current files to identify and record any time limits, court filing dates, deadlines or other critical dates to be managed over the holiday period and through January, in case someone is delayed returning to work.

2. Keep your clients informed

Communicate your leave and office closure to your clients before you go on leave. Make sure your communications are clear and help to manage clients’ expectations about staff availability over the break.

3. Notify your bank of office closures

Inform your bank of office closures. If there is limited activity expected from your law firm’s trust account or other bank accounts, notify your bank accordingly. If practicable, ask your bank not to deal with any requests made by email, phone or online to change account details or account security. To the extent any changes are required, they should be done in person by nominated staff with identification.

4. Perform basic cyber security checks

Check your email account security — especially for forwarding rules in your email account for all mailboxes. If there are any rules you haven’t created, alert your IT department. Forwarding rules are commonly used by cyber-criminals looking to divert money and intercept emails between law firms and clients. The Australian Cyber Security Centre has published specific guidance on how to check your Outlook email account security. If you have not already done so, turn on multi-factor authentication and check that you have a strong and separate password in place for your email account to keep cyber-criminals out. Maintain vigilance around your firm’s procedures for vetting and approving the electronic transfer of funds by telephone. Cybercriminals are adept at creating fraudulent internal email communications between file operators and accounts or management staff. The risks of relying solely on email instructions apply just as much to internal email communications within firms as they do to external email communications.

5. Secure your files

Make sure your active files are stored safely and securely. Practices located in flood prone areas should ensure active files are stored in a place that is raised off the floor and watertight.  

6. Turn on your ‘Out of Office’ auto reply

Turn on the ‘Out of Office’ auto reply on your email and phone voicemail, outlining your leave and contact information over the break as necessary.

Make time to switch off personally

Finally, make some time over the holiday season to switch-off, rest and recharge after another challenging year. While it might be hard to do this, it is important for your own physical and mental health and quality of work in the coming year.