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Funding the regulation of legal practice

06 June 2017 - By Tim Jones, New Zealand Law Society Vice President (Auckland)

The Minister of Justice has approved the fees and levies payable by anyone who practises law in the year to 30 June 2018. For the 2017/18 practising year there will be a reduction in the amount which lawyers pay.

This is clearly good news. Law is a well regulated profession, and since 2009 the New Zealand Law Society has been responsible for a model in which the legal profession pays for the costs of its regulation. The practising fee is directly related to that cost plus two levies which the Law Society is required to collect. The reduction is the result of efficiencies introduced over the last few years by NZLS.

The practising fee does not cover the optional services offered by the Law Society and its branches and sections: the bar dinners, lunchtime seminars, networking events and many other activities which NZLS provides are funded by other means, including user pays. NZLS CLE Ltd, the biggest legal seminar provider in New Zealand is 100% NZLS-owned, but is run completely separately (and very successfully, I might add).

The practising fee is set through a detailed budget process which covers all the regulatory functions carried out by NZLS. This results in the calculation of the amount which the profession will need to pay to ensure it can carry out its regulation efficiently. The amount required for the two levies is advised by the organisations and the proposed fee is considered by the NZLS Board and then by the Council at its April meeting before going to the Minister for approval.

As a member of the NZLS Board I would like to acknowledge the excellent work being carried out by the regulatory section of the Law Society. There is a constant focus on continuous improvement of processes and systems, all driven by knowledge of their impact on working lawyers and their clients.

The implementation of the Early Resolution Service (ERS), more streamlined disciplinary prosecutions, a move to a risk-based approach by the Inspectorate, and other improvements in technology and complaints management are some of the key factors behind the level of the fees for 2017/18. Practising certificates are now digitally generated, removing printing, postage and handling costs. There has also been a slow but steady decrease in the number of complaints against lawyers.

Alongside the fee for NZLS regulation are two levies which the Law Society is required to collect and to pass on to the organisations concerned.

The Council of Legal Education is an independent body responsible for the quality and provision of the required education and practical legal training needed for admission to the High Court as a barrister and solicitor. The levy paid by lawyers contributes around 36% of the Council’s revenue. The levy has decreased from $25 to $22 in the coming year.

The Legal Complaints Review Officer’s latest report, for the year to 30 June 2015, shows that the levies from lawyers and conveyancers provided all but $12,991 of the $1,296,681 revenue received and used to run the Office. The Law Society and profession at large have been critical of the delays and backlog in the LCRO (see the Letter to the Editor on page 19). While increasing the levy on lawyers and conveyancers could assist in resolving some of the problems, it is clear that the answer lies in improving the legislation and processes. The Law Society is obviously concerned that this occurs and has regular communication with the Office. The LCRO levy has gone from $45 in 2010 to $125 this year, which is the same as last year.

All lawyers pay for regulation equally. In return our clients, the consumers of legal services, receive a high quality regulatory regime which has their interests at heart which in turn enhances the reputation of all lawyers. The current system ensures regulation takes place with a deep understanding of the pressures and demands of legal practice.

Last updated on the 16th September 2019