Adopting Law Firm Management Systems to Survive and Thrive: A Study of the Australian Approach to Management-Based Regulation

In Australia, amendments to the Legal Profession Act require that incorporated legal practices (ILPs) take steps to assure compliance with provisions of the Legal Profession Act 2004. Specifically, the legislation provides that the ILP must appoint a legal practitioner director to be generally responsible for the management of the ILP. The ILP must also implement and maintain “appropriate management systems to enable the provision of legal services in accordance with the professional obligations of legal practitioners. Because the new law did not define “appropriate management systems” (AMS) the Office of Legal Services Commissioner for New South Wales worked with representatives of other organizations and practitioners to develop guidelines and an approach for evaluating compliance with the statutory requirements. The collaboration resulted in an “education toward compliance” strategy in which a designated director for an ILP completes a self-assessment process (SAP), evaluating the ILP’s compliance with ten specific objectives of sound legal practice. To evaluate the new regulatory regime, Professor Susan Fortney conducted a mixed method empirical study of incorporated law firms in New South Wales Australia. In Phase One of the study, all incorporated law firms with two or more solicitors were surveyed. In Phase Two, legal services directors were interested. This article discusses the survey findings, focusing on the relationship between the self-assessment process and the ethics norms, systems, conduct, and culture in firms