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Playing legal catch-up

THE legal profession is expecting big changes from legislative plans flagged for WA.

And not much could be bigger than an end to the restriction that has left lawyers consigned to using partnership as the only way of combining forces under laws which have made it impossible for them to share their profits with anyone other than another in their profession.

The mooted changes, if they go ahead, will mean WA is close to the national pace in this area, with only NSW having introduced such legislation, and a recent initiative at that.

Freehills managing partner Peter Mansell is one of those who lobbied for the change, a move he said was welcomed by the bigger firms, which were looking for alternative ways to grow their businesses.

Mr Mansell cites four key reasons for the change: allowing multi-disciplinary practices; providing for limited liability; ending partnership as the only structure available to lawyers; and the reinvestment of profits.

“At the moment we are not allowed to share profits with anyone but qualified lawyers. That (legislative change) gives us the opportunity to move outside strict legal work,” he said.

“Often we find ourselves competing with merchant banks and investment banks, stock brokers and accounting firms. They have fewer constraints, and it is like having one hand tied behind our backs.”

Mr Mansell said other changes would allow the personal assets of lawyers to be protected from business activities in the same way as any other incorporated business.

He said it would encourage law firms to invest in research and development, rather than the current situation where profits are fully taxed, whether they are distributed or not.

“There is a need to recognise we have to modernise the profession,” Mr Mansell said.

While he was not certain everyone would welcome the changes, it was hard to find dissent.

Law Society president Clare Thompson said she believed the proposals would assist small firms and sole practitioners, particularly in rural and regional areas where they could team up with other professionals to reduce costs.

“In places like Bunbury this will bring down the cost of legal advice and create greater access to the law,” Ms Thompson said.

“That is certainly the case in NSW. They don’t have clients who say ‘thanks very much’ and go up the street to see an accountant.”

WA Bar Association vice-president Gillian Braddock said it was too early to comment on whether barristers had any issues with changes being formulated by the WA Government.

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