Appointing an attorney for your legal practice FAQs

These are frequently asked questions about appointing an attorney for your legal practice, for further information please contact the QLS Ethics and Practice Centre on 07 3842 5843.

FAQs

Does my attorney need to be a legal practitioner?

In Queensland, your attorney does not need to be a legal practitioner. This contrasts with the position in Victoria.

If your attorney is not a legal practitioner, you should carefully consider the terms of the power of attorney to ensure the attorney has the power to employ a principal legal practitioner/ legal practitioner director if there is an intention that the law practice will continue operating.

Practitioners should consider Guidance Statement No. 10 before giving or accepting a power of attorney as a solicitor. The solicitor attorney must exercise the degree of care, diligence and skill that a person in the business of managing the property of others is required to exercise, as opposed to merely exercising the degree of care, diligence and skill that a person of ordinary prudence would exercise in the conduct of their own affairs.[1]

Nb: In terms of Lexon’s Help Now triage program the only key power necessary is a financial one. 

[1]  Trusts Act 1973 (Qld), s 22(1)(a).

Other considerations when appointing an attorney

A letter, memorandum or document providing some guidance to your attorney will be useful. See the Contingency Planning Checklist for information you may wish to include in the document (such as access to legal practice management systems, keys, password vaults and client files).

If your attorney is a lay person, perhaps you could provide some contact details of legal practitioners who work in your area of practice and may be able to assist your client demographic (even better if you have had a conversation with that practitioner in advance).

Remind the attorney to notify QLS, Lexon Insurance and your bank.

Consider what you want the attorney to do? (This might depend on the likelihood of you returning to practice). 

  • Are they to continue operating your business as an on-going concern? If so, how will they be remunerated? 
  • Are they to operate it as an on-going concern and then try to effect a sale or transition to a more senior member of staff? 
  • Do you simply want the attorney to step in to wind up the practice?
What document do I need?

Sole practitioners should implement an enduring power of attorney with financial powers. Partners in partnership arrangements would be wise to ensure they also have an enduring power of attorney with financial powers in place, however they should carefully consider the terms of their partnership deeds and any buy/sell/succession agreements.

Sole legal practitioner directors should, subject to the terms of the company’s constitution or governing documents, implement a general power of attorney with financial powers. For incorporated legal practices a proper contingency plan is critical - an incorporated legal practice is required to have a legal practitioner director within 7 days of a vacancy otherwise it must cease providing legal services.[1]

Where there is more than one legal practitioner director in an incorporated legal practice, a general power of attorney should still be considered a critical contingency planning document.

[1] Legal Profession Act 2007 (Qld), s 119. 

What special powers should you consider?

The extent of the powers you might consider including in the power of the attorney may depend on whether:

  • the person appointed is a principal practitioner or lay person.
  • the person appointed is a business associate or family member or friend.
  • there are any express restrictions on acts of an attorney in the company’s constitution or governing documents.

You may consider including:

  • express authorisation of conflict transactions, or certain types of conflict transactions.[1]
  • a release for the attorney for all acts done in good faith and in exercise (or purported exercise) of any of the powers or functions of the attorney.
  • an indemnity for acts or omissions done by, or at the direction of the attorney, to the same extent as a legal practitioner employed by the legal practice.
  • proposed remuneration for the attorney.
  • any preconditions to closure or sale of the practice (i.e., notifications to you, another attorney, business advisor or family member). 

Nb: The above special powers are not a pre-requisite for Lexon’s Help Now program to be activated. It is recommended practitioners seek independent legal or financial advice on appropriate powers and authorisations required for their particular circumstances.

[1]  See Powers of Attorney Act (n 4) s 73(6): 

A conflict transaction” is a transaction in which there may be conflict, or which results in conflict, between

  1. the duty of an attorney towards the principal; and
  2. either—
    1. the interests of the attorney, or a relation, business associate or close friend of the attorney; or
    2. another duty of the attorney.
Who should sign the power of attorney?

For sole practitioners or partners, the person signing the document should be the sole practitioner or partner.[1]

For incorporated legal practices, the general power of attorney should be signed by the authorised representative of the company.[2] The appropriate procedure for noting the decision to authorise the appointment and signing of the power of attorney should be followed (this may be by way of ordinary or special resolution depending on the company’s constitution). Practitioners should note changes to the Powers of Attorney Act 1998 (Qld) which enable electronic signing of general powers of attorney.[3]

[1] Unless the sole practitioner or partner requires someone to sign the document on their behalf: see Powers of Attorney Act 1998 (Qld), s 44(5) (‘Powers of Attorney Act’).

[2] Ibid s 24H.

[3]  Ibid s 24F.