Law Times

LAw times • August 6, 2012 BY KENDYL SEBESTA Law Times A Australian reforms show little improvement in access to justice Reforming the NEWS law and criminal law issues." Australia first made significant ustralia's bleak legal aid as the two countries continue to reform their legal systems in the wake of the global economic downturn, a report by Commu- nity Law Australia shows. The report found that of the benchmark may serve as a cautionary tale for Britain and Ireland reforms to its legal services indus- try in the 1990s aſter it developed international and national poli- cies that embraced an open mar- ket and increased competition. From that, the country cre- Legal Profession 1.7 million Australians expected to encounter a legal problem this year, roughly 490,000 won't receive legal advice due to the significant costs associated with hiring a lawyer and pursuing their actions in court. The findings come despite vices means that many Austra- lians would find it difficult to pay for a lawyer for anything but the most basic legal issues," noted the report, "Unaffordable and out of reach: the problem of access to the Australian legal system." "When people who can't af- changes to legal services in Aus- tralia over the last decade aimed at cutting costs and increasing access to legal services for consumers. "The high price of legal ser- ford a lawyer turn to government- funded legal assistance services, they find that due to chronic funding shortages, ongoing help is oſten restricted to those on the lowest incomes and then only for a limited range of mainly family ated a unified legal system that would pave the way for national regulation of the legal profession in 2010. In the last decade, Aus- tralia has embraced alternative business structures that allow for non-lawyer ownership of law firms. As a result, Australia pro- duced one of the first law firms in the world to be publicly trad- ed on its stock market. Gary Tamsitt, director of the Australian National University le- gal workshop, says while legal ser- vices have likely not become more affordable in Australia because of the changes to its legal services, small and national law firms have reaped significant benefits. "I don't think there is clear evidence that legal services have become more affordable, except that there has been a pause in fee increases because of the global fi- nancial crisis," says Tamsitt. "But largely what has hap- 'Our business structure allows lawyers to actually move away from the traditional partner aspirations,' says Andrew Grech. the required appropriate man- agement systems has produced a magical two-thirds reduction in complaints for incorporated legal practices, ILPs as we call them," he adds. Tamsitt says that reduction is pened is that small firms have been migrating to the same sort of business structure that other small businesses use: the private company. Since the changes took effect, "the annual self assessment of " particularly significant for small practices that tend to make up the majority of complaints regulators receive in Australia. "My take is that these practices oſten lack good management systems and the oversight of oth- ers; for example, other partners results have varied. "The decision to list on the or office managers that are pres- ent in larger firms. So having to go through the self-assessment process makes ILPs pay attention to their systems and are a form of quality management." But for larger international firms like Slater & Gordon, the stock exchange has allowed for a stronger basis for succession planning, the ability for employee shareholders to crystallize their investments, and an easier acces- sibility of debt and further equity for future expansions of the firm," says Slater & Gordon managing director Andrew Grech. "It also means we have the abil- a law firm on the stock market isn't for everyone. "Listing on the stock exchange may not be an appropriate busi- ness structure for all legal practic- es. A key determinant is require- ment for capital. Most commercial firms do not have the same capital restrictions as they are usually on a 30- to 60-day billing cycle. The other difference is that the value in Slater & Gordon was in the brand as opposed to attached to any indi- vidual who may leave. Many firms' value is attached to the individual, making it hard to attribute value to shareholders in a listing. ity to integrate different organiza- tional cultures via mergers, as well as have the ability to offer shares to future merger partners while cre- ating an exit mechanism for the partners of acquired firms. Our business structure allows lawyers to actually move away from the traditional partner aspirations." Despite increasing its foothold abroad and raising additional capital, Grech says costs haven't significantly changed for the firm' clients. It has used capital from listing the firm on the Australian stock market to expand to more than 70 locations. The move has also helped the firm move away from personal injury to family law and conveyancing, he adds. Still, Grech admits that listing s done fairly well on the stock mar- ket; however, the majority of law firms in Australia haven't jumped on board to become publicly trad- ed. In fact, Slater & Gordon and Integrated Legal Holdings Ltd. are the only firms on the Australian stock market to date. Legal fees have also not sig- So far, Slater & Gordon has " nificantly decreased since Aus- tralia introduced its reforms nearly a decade ago. Despite a spike in legal aid funding by the Australian government set to end next year, Community Law Australia' vices have yet to become more accessible or affordable. s report notes legal ser- LT uThis is the third instalment in Law Times' summer series on re- forms to the legal profession around the world. PAGE 5 for Classes Starting in September 2012 Part-time, Executive LLM program for corporate counsel and practising lawyers Information Sessions Wednesday, December 7, 2011 5:30 - 7:00 pm Friday, December 9, 2011 8:00 - 9:30 am U of T Faculty of Law, Faculty Lounge 78 Queen's Park, Toronto No registration required. Please feel free to drop in anytime during these hours. Taught by U of T Faculty of Law professors, together with top international faculty from INSEAD Business School, NYU School of Law, and Rotman School of Management. For more information and to apply: http://www.law.utoronto.ca/programs/GPLLM.html http://www.law.utoronto.ca/programs/GPLLM.html For more information and to apply: Supported by the Association of Corporate Counsel (ACC) - Ontario Chapter and in partnership with Carswell, a Thomson Reuters business. GLLM_LT_June4_12.indd 1 www.lawtimesnews.com 12-05-29 4:18 PM

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