New Zealand Law Society - Penalties imposed for improper management of firm and client care
The New Zealand Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal) has made penalty orders in relation to practitioners Ms A and Mr B. The charges related to the management of a firm in which Mr B was the principal and Ms A was an employee. The Tribunal found Mr B engaged in unsatisfactory conduct by failing to fulfil his role as supervisor in that he allowed Ms A to act as a principal of the firm when she was not authorised to do so. Ms A was found guilty of misconduct for holding herself out as principal, for her poor treatment of junior staff throughout this period, and for failing to provide competent and timely advice to clients. She was also found guilty of a charge of unsatisfactory conduct for failing to provide timely advice to a client. Ms A was censured, suspended for four months and ordered to undertake supervision for 12 months. Mr B was censured. Ms A was also ordered to contribute to costs.
Ms A had set up the firm and was previously its sole director. During a period in which she was not permitted to practise on her own account, Ms A appointed directors to act as the principal having undertaken to continue to work as an employee of the firm. While Mr B was in the role of director, Ms A acted as the de facto principal and oversaw the provision of legal services to clients and managed staff. The firm staff comprised of mostly graduates and law clerks supervised by Ms A and undertook specialised litigation work that included Treaty-related and family law matters. The staff relied heavily on remote communication because Ms A was often absent from both the office and New Zealand. To meet the demands of the firm, staff were expected to regularly work extended hours, not take sick leave and complete a high volume of billable hours.
Ms A also faced two charges arising from her conduct with clients. The first involved a client seeking assistance from Ms A to increase contact with their child who was with long term caregivers who held parenting orders. Ms A agreed to act but delegated the matter to a junior lawyer as she was too busy to deal with the client directly. The second client matter involved an appeal which Ms A failed to progress appropriately. This led to the appeal being struck out and an award of costs being made. Ms A failed to advise her clients of the consequences for failing to pay the costs award, that they may have a claim against her and continued acting for the clients despite a conflict arising from that potential claim.
Mr B was found guilty of unsatisfactory conduct for failing to fulfil his role in accordance with his professional obligations and allowing Ms A to carry on as sole principal. The Tribunal found Mr B did not properly understand his obligations noting he was required to be much more sceptical and challenging of the financial information that he agreed to oversee and had a duty to familiarise himself with the staff, and the overall workings of the firm.
In terms of penalty, the Tribunal regarded the conduct as being at the lower end of the spectrum. The Tribunal considered Mr B's forty-five years in practice with a clean disciplinary record, his remorse and empathy for the junior practitioners as well as his health concerns and modest financial circumstances were mitigating factors. The Tribunal considered that a censure was sufficient to mark the conduct and to deter other practitioners who may contemplate taking on a similar director role without properly understanding and discharging their responsibilities.
The Tribunal found Ms A was aware she was permitted to practise as an employed lawyer only and her appointment of Mr B as director was no more than “window dressing” given she continued to run the practice without oversight. Because the restrictions on Ms A’s practice were intended to protect consumers and maintain confidence in the profession, her conduct was found to be misconduct. In terms of her treatment of staff, the Tribunal found Ms A’s conduct towards her employees, including her intolerance of illness or other absences from work, the unreasonable and ongoing demand for work outside normal office hours without good cause and the expectation of high billable hours had an adverse effect on employees. It found that this descended to the level of disgraceful, dishonourable conduct and was therefore misconduct. The Tribunal found that the management of the firm negatively affected both clients and the courts, leading to frequent requests for extensions, late filings, and missed deadlines. Complex matters were often handled by inexperienced junior lawyers without adequate supervision because Ms A was unavailable.
The Tribunal further found Ms A guilty of misconduct in relation to the appeal matter that was struck out for want of prosecution. Ms A’s conduct in respect of the family law matter was considered unsatisfactory conduct.
Ms A was censured, suspended for four months commencing 12 November 2026, and required to undertake 12 months supervision on returning to practice. The Tribunal regarded the misconduct as serious but reduced the suspension from the available six to eight months, to four months in light of remedial steps taken by the firm and the impact of the suspension on staff and clients. Ms A was ordered to pay 80% of the Committee’s costs (approximately $148,000) and 90% of the Tribunal’s costs ($94,531.50), reflecting the significant costs generated by her defence of the charges.
The Tribunal declined Ms A’s application for interim name suppression pending appeal of the liability decision. Ms A has appealed the Tribunal’s liability decision, and interim suppression remains in place pending determination of this application or further order from the Court.