New rules that will allow in-house lawyers to provide regulated services to entities other than their employer come into effect from 1 July.
The Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (ROCCC) has been amended to clarify the scope of practice for an in-house lawyer.
The new "Shared Services" rules make it clear that an in-house lawyer may work for (provide regulated services to) certain organisations that are closely associated with the lawyer's employer.
In-house lawyers employed by the Crown will be allowed to provide regulated services to any Crown organisation or statutory officer. And in certain circumstances, private sector in-house lawyers will be allowed to provide regulated services to related subsidiary and/or controlling companies.
The New Zealand Law Society is currently drafting guidance on the impact of the amendments including terms of engagement templates for in-house lawyers providing services to related entities.
Details of the requirements and conditions which apply from 1 July are summarised on the Shared services rule change for in-house lawyers page.
The amendments:
Part 1
Amendments to rule 15.2
25A An in-house lawyer who will provide regulated services to anyone other than his or her employer needs to ensure that he or she complies with all the requirements of these rules, including the provision of information requirements of Rules 3.4 and 3.5, and the rules in chapter 5 (Independence), chapter 6 (Client interests), and chapter 7 (Disclosure and communication of information to clients).
Part 2
New rules 15.2.4 to 15.2.6
15.2.4 Where an in-house lawyer is engaged by—
(a) a controlling entity, the lawyer may provide regulated services to a subsidiary entity of the controlling entity; or
(b) a subsidiary entity, the lawyer may provide regulated services to the controlling entity and to any other subsidiary entity of the controlling entity; or
(c) the Crown, a Crown organisation, or a statutory officer, the lawyer may provide regulated services to the Crown and to any Crown organisation or statutory officer.
15.2.5 For the purposes of rule 15.2.4(a) and (b), an entity (entity B) is a subsidiary of a controlling entity (entity A) only if,—
(a) whether or not entity B is a company,—
(i) entity A controls the composition of at least half of the board (or governing body) of entity B; or
(ii) entity A is in a position to exercise, or control the exercise of, at least half of the maximum number of votes that can be exercised at a meeting of entity B; or
(b) entity B is a company, and –
(i) entity A holds at least half of the issued shares of entity B, other than shares that carry no right to participate beyond a specified amount in a distribution of profits or capital; or
(ii) entity A is entitled to receive at least half of every dividend paid on shares issued by entity B, other than shares that carry no right to participate beyond a specified amount in a distribution of profits or capital; or
(c) entity B is a subsidiary of an entity that is a subsidiary of entity A.
15.2.6 In rules 15.2.4 and 15.2.5,—
company has the meaning given to it in section 6 of the Act Crown organisation has the meaning given to it in section 6 of the Act
entity has the meaning given to it in section 5(1) of the Financial Reporting Act 2013
statutory officer has the meaning given to it in section 6 of the Act.