Management-Based Principles and Compliance-Based Regulation of Lawyers Susan Saab Fortney Howard Lichtenstein Distinguished Professor of Legal Ethics Maurice Deane School of Law Hofstra University

Requirements for Incorporated Firms in Australia Appoint a legal practitioner director Identify and report professional misdeeds Implement/maintain appropriate management systems to ensure that provision of legal services complies with requirements of the law

Appropriate Management Systems & Self-Assessment Process Not defined in legislation, but regulator and professional groups identified ten objectives of sound legal practice Firms use self-assessment forms to rate compliance with objectives

Ten Objectives of Sound Practice Competent work practices Effective, timely and courteous communication Acceptable processes for liens and file transfers Common understanding and documentation of costs disclosure, billing practices, and termination

Objectives continued Timely identification and disclosure of conflicts of interest Records management Undertakings to be given with authority, monitoring and timey compliance Supervision of practice and staff Proper handling of trust accounts

Self-Assessment Process for Management-Based Regulation Designated attorney completes a self- assessment form Rates compliance with objectives on a scale from non-compliant to compliant-plus Regulator works with firms reporting deficiencies

Track record of Education Toward Compliance Approach spread to other Australian states Study results on complaints -- Complaints rate for ILPs down by two-thirds for firms that completed a self-assessment -- Self-assessed firms had one-third the number of complaints as compared to other firms

Mixed Method Study Surveyed designated directors for all incorporated firms with 2+ solicitors who completed SAF Interviewed 40+ directors

How SAP contributes to development of appropriate management systems 84% reviewed firm policies or procedures 71% revised firm systems, policies or procedures 46% adopted new systems, policies or procedures 6% hired a consultant to assist the firm in developing policies and procedures

Approaches to AMS Ticking Implementation for compliance Implementation for clients Implementation for risk management Implementation for business development

Integrating Features of Management- Based Regulation Require ABS firms to appoint General Counsel and to implement management systems Develop and expand diversion programs

Initiatives to Encourage Self-Audits Provide more practice management assistance Encourage insurers to require self- assessments or provide premium discounts Recognize a self-evaluation privilege covering results of internal reviews Develop a certification program

Advantages of Education Toward Compliance Regulator proactively partners with lawyers to improve their management systems and practices Provides incentives for lawyers to focus on risk management Lowers the likelihood of misconduct – providing more public protection than traditional reactive handling of complaints