Limits on in-house practice
It may not be well understood that corporate lawyers cannot in their capacity as in-house lawyers, provide legal services, to anyone other than their employer. They cannot, for instance, provide legal services to their employer’s members or clients.
That was the case under the Law Practitioners Act and continues to be the case under the LCA (ss9(1), 10(1) and 10(4)). Opinions on the effect of the provisions of the acts are available from the NZLS on request. Chapter 15 of the Lawyers and Conveyancers (Lawyers: Conduct and Client Care) Rules 2008 (available on the society’s website www.lawsociety.org.nz) sets out the nature of engagement and practice of in-house lawyers.
For many years some corporate lawyers, while holding practising certificates, have been providing employment law services to their employer’s members or clients without being aware they should not. The Lawyers and Conveyancers Bill (No 2) currently before Parliament will, if passed, regularise that situation by allowing lawyers working for employer associations and unions to continue to represent their employer’s members or clients. The society opposes that amendment.
There are strong public policy reasons for the prohibition. If an in-house lawyer, as part of his or her duties to the employer, provides legal services to someone else, the contract for the provision of those services is between the client and the non-lawyer employer rather than between the client and the lawyer. The provision of legal services by non-lawyers through the intermediary of employed lawyers has the effect that the "clients" are not protected by client protection and fiduciary obligations in the legislation.
The provision of legal services by non-lawyers is prohibited under the legislation – it is a facet of the prohibition on multidisciplinary practice.
Corporate lawyers who have, without knowing the legal situation, been providing legal services to their employers’ members or clients have a number of options. They can, for instance:
- cease their employment, set themselves up in separate law firms with a lawyer or lawyers entitled to practise on own account, and provide the services on a referral basis;
- set up in practice on own account and renegotiate their employment contracts or contracts for services to reserve their right to private practice. That would enable them (subject to conflicts of interest) to enter into separate lawyer/client relationships with their employers’ members or clients seeking legal services;
- give up their practising certificates and act instead as, say, employment advocates. In terms of the LCA, they would not be able to provide "regulated services" without a practising certificate, but would be able to provide other legal services.
Other questions and answers
Q: Must I hold a practising certificate?
A: Yes – if you undertake "reserved work" (in terms of s6, LCA) for your employer or if you are to describe yourself as a lawyer, solicitor, counsel or any of the other terms set out in s21(1) of the LCA. If you hold a practising certificate, you will be regulated by the NZLS in terms of the LCA.
Q: What can and can’t I do without holding a practising certificate?
A: You can undertake legal services that are not reserved. But your employer will not have the protection of you being regulated by the NZLS, and legal professional privilege will not attach to your advice. You can’t use any of the titles protected under s21(1). Nor can you instruct counsel or do such things for your employer as taking declarations or affidavits, certifying true copies, etc.
Q: Can I, as a corporate lawyer, sign off an agreement under Part 6 of the Property (Relationships) Act for someone other than my employer?
A: No – s21F requires that the lawyer who witnesses the signature of a party to a Part 6 agreement must certify that, before that party signed the agreement, the lawyer explained to that party the effect and implications of the agreement. The same is true of any other certification of this kind. As a corporate lawyer, you cannot provide legal services to anyone but your employer.
Q: Can I, as a corporate lawyer, certify true copies or witness signatures for people other than my employer on an occasional basis?
A: Yes – if you hold a practising certificate, and if you do this only on an occasional basis and without charge, and if you follow proper procedure (eg, for identifying the signatory), and if your employer does not object.
Q: Can I be engaged under a contract for services rather than an employment agreement?
A: Yes – if the contract is between the corporate and your employer/law firm, or between the corporate and you (provided you are in practice on your own account, whether as a solicitor or as a barrister).
Q: Can I have a contract for services as a corporate lawyer and also be in practice on my own account?
A: Yes – provided your contract for services reserves your right to practise on own account separately.