Traps for junior lawyers: Acting for friends and family can be risky business
BY GLENDA CARRY – MAR 10, 2023 8:30 AM AEDT
Snapshot
- As a junior solicitor, you may unexpectedly find yourself in the position of being asked by friends or family to provide legal advice.
- If not handled properly these situations can be high risk.
- There are simple risk management tips for junior lawyers to help manage these situations.
It’s Friday evening and you’re having after work drinks with friends. You are celebrating your recent admission to the Australian legal profession and surviving your first week as a personal injury solicitor. As the night progresses, your friend Lucy is keen to chat about all the drama going on following the recent purchase of her first home. Lucy tells you that after investing all her savings into the property, she unexpectedly had to borrow over $1000 to pay a locksmith and to have rubbish removed. Worse still, certain items the vendor verbally agreed to leave are gone. With no savings and servicing a gigantic mortgage, Lucy cannot afford to buy the missing items or retain a solicitor to act on her behalf. You feel bad for Lucy. With a few glasses of wine onboard, you tell her not to worry, as by the sounds of things there was a verbal contract and you will make sure she is compensated. You ask Lucy to send you the vendor’s details and say you will get a letter out first thing Monday morning! Even better – it will not cost her a thing!
You arrive at work on Monday morning and find an email from Lucy with the details you need. You send a letter to the vendor on the law practice’s letterhead confirming the law practice acts for Lucy. The letter states that should the promised items not be returned and Lucy not be reimbursed for her out of pocket costs within 14 days, the law practice will commence legal proceedings on Lucy’s behalf. You receive no response and in the weeks that follow you send out additional emails from your office email address. You sign off each email as a solicitor at the law practice.
Many of us will remember a time when, as junior lawyers, we found ourselves being asked to help friends or family. While it might seem straightforward, there are many perils both from a professional negligence and professional conduct perspective. The above scenario is loosely based on the facts of the recent Tribunal decision of NSW Legal Services Commissioner v Lal [2022] NSWCATOD 144 where, in making a finding of professional misconduct against the solicitor, the Tribunal noted the solicitor represented her partner as a client of her employer (the law practice) when the solicitor knew that no formal (or any) solicitor/client relationship existed (at [7]).
The case of Zakka v Elias [2013] NSWCA 119 is another example of how this scenario can arise. In this case, an employed solicitor felt pressured by a family member to give advice in an area outside her usual area of practice. Gere were problems with the advice and, although the solicitor was acting of her own accord, her employer (the law practice) was faced with defending a vicarious liability claim.
As Lawcover’s professional indemnity insurance policy insures the law practice, indemnity issues can arise where employed solicitors provide legal advice to friends or family outside the scope of their employment.
Being prepared to handle these situations is key to effective risk management.
Risk management tips for junior lawyers:
- Decide in advance that if friends or family ask for legal advice, you will refer the request to the principal(s) of the law practice to determine if the law practice can act for your friend or family member;
- Discuss how you are going to handle this conversation with your supervising partner and/ the principal(s) of the firm;
- Consider the key lessons from Lal and Zakka before you act and the possible repercussions for you and your employer;
- Consider the conditions of your practising certificate and your professional obligations.
Be comforted that as you progress in your legal career, having these (sometimes) awkward conversations does get easier.
This article originally appeared on lsj.com.au