Annual report 2014-2015

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ANNUAL REPORT 2015

THE LAW SOCIETY OF NEW SOUTH WALES | ANNUAL REPORT 2015 | 1

VISION LEADERSHIP OF THE PROFESSION

SERVICE TO MEMBERS A JUST LEGAL SYSTEM

MISSION 1 Activities and services determined by the needs and welfare of members 2 A profession effectively represented at government and community levels 3 A competitive national profession 4 A community served by ethical, competent and independent legal practitioners 5 A community with reasonable and affordable access to justice 6 Ongoing reform of the law and the legal system

© 2015 The Law Society of New South Wales, ACN 000 000 699 , ABN 98 696 304 966 . Except as permitted under the Copyright Act 1968 (Cth), no part of this publication may be reproduced without the specific written permission of The Law Society of New South Wales.

CONTENTS

President’s report

4 5 7

Profile of the profession

Complaints against solicitors

CEO’s report

10 16 18 20 24 26 28 32 36 39

Lawcover Group of Companies CEO’s report Lawcover Group of Companies Chair’s report

NSW Young Lawyers President’s report

Corporate governance statement

Law Society Councillors

Major law reform submissions

Strategic plan 2013–2016

Treasurer’s report

Concise financial report

PRESIDENT’S REPORT

PRESIDENT’S REPORT JOHN EADES

Over the past 12 months, The Law Society of New South Wales has continued its work on arrangements for commencement of the Legal Profession Uniform Law on 1 July 2015 , as well as our ongoing and significant program of advocacy work.

Annual Members Dinner and President’s Medal

Through consultation with our policy committees and stakeholders we identified a number of key issues as part of our State Election Policy Platform, including restrictions on legal representation, court funding and accessibility, and workers compensation. In the lead up to the election we also sought to highlight the disproportionately high number of Indigenous people in New South Wales prisons, as well as calling on parties to reject mandatory sentencing as unjust, ineffective and unaffordable. A post-election cabinet reshuffle in May 2015 delivered the State’s first female Attorney-General, The Hon Gabrielle Upton MP. I am pleased to say that the new Attorney-General has had a consistent association with the Law Society, maintaining membership during her time as a member of New South Wales Parliament. Independent research commissioned by the Law Society and publicised in The Australian – Legal Affairs has

The 2014 Annual Members Dinner was held at the Museum of Contemporary Art with guest speaker The Hon Justice Margaret Beazley AO. At this dinner, the 2014 Law Society President’s Medal was presented to Lieutenant Commander Shannon Richards. Lieutenant Commander Richards is an outstanding lawyer, who has served for many years in the Royal Australian Navy and is a co-founder of KidsXpress, a Sydney-based children’s charity. Legal Aid funding It is a broadly accepted view that access to justice must not be dependent upon one’s capacity to pay. There is a need for adequate and ongoing funding for services such as Legal Aid at both a state and federal level. It was therefore concerning that the 2015 federal budget revealed a significant reduction in funding to Legal Aid and community legal centres as of 2017-18 . We will continue to press government at both a state and national level to ensure they take a consistent approach to Legal Aid funding that enable these services to make and implement long- term strategies.

underlined the degree to which solicitors are supported by the community and seen as a “civic

necessity”. This is a view contrary to many commonly held misperceptions and will form the basis of future work by the Law Society.

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PRESIDENT’S REPORT

PROFILE OF THE PROFESSION

On 30 June 2015 , there were 29,230 solicitors registered in New South Wales – an increase of 1,081 since last year.

Male/female solicitors

Age of solicitors

Female

Male

14,833 = 50.75%

Male:

6,188

< 35

14,397 = 49.25%

Female:

3,751

4,329 3,457

35-44

2,292 2,992 1,258 3,020

45-54

Category of solicitors

55-64

Private: 20,749 = 70.99% Corporate: 5,373 = 18.38% Government: 3,108 = 10.63%

331 1,612

> 65

Experience of solicitors

Female

Male

1,168

< 1yr

Location of solicitors

819

13,985 = 47.84%

City:

3,308

2-5yrs

7,921 = 27.10%

Suburban:

2,306

3,257 = 11.14%

Rural:

3,519

6-10yrs

Unemployed: 2,933 = 10.03%

2,413

1,033 = 3.53%

Overseas:

2,328

101 = 0.35%

Interstate:

11-14yrs

1,819

4,086

> 15yr

7,464

THE LAW SOCIETY OF NEW SOUTH WALES | ANNUAL REPORT 2015 | 5

PRESIDENT’S REPORT

In addition, community forums held by the Law Society at Penrith Bowling and Recreation Club and Lismore Workers Club in the first few months of 2015 focused on much needed changes to the workers’ compensation regime in New South Wales. These community events were instrumental in helping the Law Society gauge community concern on this key plank of our election policy agenda. Mental health Giving people support in their time of need is often a fundamental step in helping them to cope with a crisis in their personal or working lives. Established by the Law Society in mid- 2014 , Lifeline for Lawyers provides non-judgmental support and resources, helping people to cope with a crisis situation. This new service was officially launched by John Brogden AC, with the aim of helping lawyers deal with psychological and emotional distress. Lifeline for Lawyers is an independent and confidential telephone crisis service, with 24/7 support. It also provides online crisis support every night from 8 pm- 4 am. Uniform Legal Profession reform In 2014-15 , important progress was made towards implementation of the Legal Profession Uniform Law and associated scheme. In September Uniform Legal Services Regulation. During this period, the Law Society continued to work on arrangements for implementation of the reforms at a state and national level. This included we welcomed Dale Boucher as the inaugural Commissioner for

Court funding The Law Society has been concerned for some time that resourcing pressures in regional and suburban areas have had a negative impact on access to justice, with some local courts’ sittings moved or reduced in number, leading to significant increases in the time taken for matters to come before the courts or to be finalised. A failure to replace judges in the Family Court and Family Division of the Federal Circuit Court has also resulted in a significant blowout in court lists in these jurisdictions, resulting in delays and added costs to the consumer. The Law Society continues to call for adequate court resourcing and reasonable controls on court fee increases as part of its Election Policy Platform, and ongoing legal policy and media liaison work. State Election Policy Platform The Law Society’s 2015 NSW State Election Policy Platform built on our policy and law reform submissions, with the aim of ensuring measures that increase justice and fairness in the legal system were front and centre for both political parties and candidates in the lead up to the State Election on 28 March 2015 . Our Election Platform: Balance. Rights. Justice , was a reflection of the Law Society’s commitment to a balanced criminal justice system, the protection of individual rights, and access to justice through proper resourcing of the NSW court system. As part of this work, the Law Society sought a commitment from all New South Wales politicians to constructive and consultative law reform, with a focus on working towards a balanced criminal justice system.

Law reform and advocacy Our committees make over 100 submissions to government, law

reform bodies, parliamentary inquiries and the courts each year, advocating for positive reform in the legal and justice systems. This legal policy work has seen us dealing with a number of major developments over the past year. In the Statutory Review of the Workers Compensation Legislative Amendment Act 2012 , released at the end of June 2014 , many of the Law Society’s recommendations for review of the scheme were adopted. Through the Workers Compensation Amendment (Existing Claims) Regulation 2014 , in September the NSW Government improved access to hearing aids and prosthesis for claims made before 1 October 2012 . In August 2014 , the Baird Government announced a review of bail following a handful of high-profile cases in which bail was granted, leading to strong criticism of the new law. At the time, the Law Society criticised this move as premature given that the existing bail arrangements had not been given the requisite time to work through the court system. The Bail Amendment Act 2014 introduced a number of factors that must be taken into account when determining bail, including the views of the victim’s family, which are relevant to a concern about the safety of the victim, individuals or the community. Despite our reservations, the Law Society sought to engage with the government in the review process in order to help ensure a balance was struck between fundamental legal rights and protection of the community.

work on the drafting of relevant implementation legislation and delivery of an associated CPD program for the legal profession.

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PRESIDENT’S REPORT

COMPLAINTS AGAINST SOLICITORS

In 2014-2015 , 408 complaint files were opened by the Professional Standards Department.

Complaints opened 2014–2015

Areas of law*

408

54

2014/15

Family Law

480

26

2013/14

Estate/Wills

546

21

2012/13

Commercial Law

550

15

2011/12

Property Law/Conveyancing

545

14

2010/11

Criminal Law

680

6

2009/10

Employment Law

5

Purchase of Business

Workers Compensation 5 Purchase Real Estate Property 1

Major complaint categories*

165

Personal Conduct

67

Communication/Service

Complaints opened, by type of complainant*

48

Cost/Payment issues

47

Trust Account matters

116

Client/Former Client

45

Non-Compliance

73

Law Society

6

Other

73

Solicitor

69

Third Party

35

Third Party (Other Side)

Complaints opened, by solicitor type*

22

Barrister

255

Principal

11

Solicitor for Client

80

Not Practising

4

LSC

55

Employee

2

Other

8

Firms Only

2

Executor

5

Corporate Legal

1

Attorney-General

3

Clerk

2

Government Legal

* 1 July 2014 – 30 June 2015

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PRESIDENT’S REPORT

Law reform and advocacy (continued)

Graduate numbers With heightened anxiety around the number of law graduates emerging from New South Wales universities, in late June 2014 the Law Society moved to establish a working group to investigate the outlook and viability of the profession in the coming years. The result of this work is our Future Prospects of Graduates Report and Recommendations , which has revealed significant gaps in the data available and has encouraged us to undertake further work in the area. This work will include gathering more detailed statistics and data on graduate numbers and employment trends. The 29 country and suburban law societies are vital in our ability to ensure that the whole of the profession has a voice in the work of the Law Society. To this end, we have continued our program of five Regional Law Society Conferences and visits to the regions. Over the years our work with the regions has included advocacy on key campaign areas, and this year has been no exception. In 2014-15 , the regional law societies have helped us to push wills and estates, workers compensation, and access to justice issues through suburban and regional media. To help facilitate this work, the Law Society Council held its May meeting in Dubbo, hosted by the Orana Regional Law Society and its President and Law Society Councillor, Andrew Boog. This was an opportunity for the Council and senior executive to hear from local practitioners and the community. Regional and suburban law societies

President’s charity Each year, the president is asked to nominate a charity that benefits from both in-kind and financial support from the Law Society and the legal profession. My charity for the year is Motor Neurone Disease NSW, a charity that promotes research that benefits those with MND. A number of events and initiatives will be run throughout 2015 in support of Motor Neurone Disease NSW and I thank everyone who contributes to this worthy cause. Conclusion Through the work of our 27 standing committees and with the support of dedicated staff and the 29 regional law societies, the Law Society will continue to engage with national legal profession reform and other issues that shape the future of the profession. Finally, I would like to acknowledge the work of the dedicated team of staff at the Law Society, and the ongoing support and guidance of our excellent CEO, Michael Tidball.

In light of these changes, it is worth noting that recent Bureau of Crime Statistics data has also revealed a 23 per cent rise in adult and 72 per cent rise in juvenile remand figures between September 2014 and March 2015 . It is unclear if this is the result of a number of NSW Government changes to the law on bail. However, the fact that the increase is disproportionately higher for Indigenous prisoners is of major concern to the Law Society. Thought leadership The Law Society seeks to lead debate and public discourse on key issues affecting the profession and the wider community. An important part of this work is our annual Thought Leadership program. For 2015 , this is entitled ‘Australia in the World’ and a highly topical panel discussion around Australia’s focus on border security in light of the continued increase in international refugee numbers took place in March. The profile of the profession The second National Profile of Solicitors in Australia was released in May. The report, which was commissioned by the Law Society on behalf of the National Conference of Law Societies, includes data on solicitors of Aboriginal and Torres Strait Islander background for the first time. We now have two sets of data for solicitors in all states and territories of Australia, which enables us to observe changes in the profession between 2011 and 2014 .

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PRESIDENT’S REPORT

Our Election Platform, Balance. Rights. Justice , was a reflection of the Law Society’s commitment to a balanced criminal justice system, the protection of individual rights and access to justice through proper resourcing of the New South Wales court system.

– J ohn E ades

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CHIEF EXECUTIVE OFFICER’S REPORT

CHIEF EXECUTIVE OFFICER’S REPORT MICHAEL TIDBALL

The 2014-15 reporting year culminated in the launch of the Uniform Legal Services Market between New South Wales and Victoria. This landmark reform follows nearly a decade of work undertaken by The Law Society of New South Wales.

The participation of over 70 per cent of Australia’s lawyers in a new single market with a single regulatory scheme has been mandated with the Legal Profession Uniform Law. This milestone coincided with the conclusion of the first decade of Law Society voluntary membership. These two milestones are emblematic of the international esteem in which The Law Society of New South Wales is held: as a formidable and successful hybrid representative legal association and co- regulator. The past year has nevertheless presented many challenges. These challenges were met with productive professionalism that has been the hallmark of our committees and staff over many decades. Financial performance The Law Society has again completed the year in a solid financial position with a reported surplus of $ 2.1 million and net assets of $ 54.1 million as at 30 June 2015 . Throughout the course of the 2014-15 financial period, the Law Society completed a major project in modernising and upgrading its core legacy database and information

system. It is significant to note that this investment and upgrade was completely funded from operating cash flows. In addition to this, our externally managed investment portfolios achieved a combined annual return of 6.2 per cent for the year, which, considering the conservative nature of these funds, was an outstanding result that exceeded the investment benchmarks approved by the Law Society Council. When the operations of both Lawcover Insurance Pty Limited and the Solicitors Mutual Indemnity Fund are included, the Law Society Group recorded a consolidated net surplus of $ 34.8 million with net assets totalling $ 238.7 million at year end. Lawcover Insurance has strengthened what was already a strong capital base, and it is from this position that the Law Society is able to provide the profession with premium stability and value well into the future. Additional information pertaining to both the Law Society and consolidated group financial results can be found in the Treasurer’s report and accompanying concise financial statements.

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CHIEF EXECUTIVE OFFICER’S REPORT

One major project carried forward over the past year has been the Law Graduates Working Group, which released a report, Future Prospects of Law Graduates Report and Recommendations , in April 2015 . This has been well supported by a committee of Councillors, and there is now a concerted focus on the delivery of its key recommendations. The Law Society has also provided secretariat support for the Law Council of Australia’s National Electronic Conveyancing System (NECS) Committee pursuant to a Memorandum of Understanding with the Law Council. The Law Society has committed to this arrangement in order to enhance high order policy and reform implementation for the benefit of the profession. The Policy and Practice Department has prepared a large number of submissions, with the key ones being: • Managing concurrent electronic and paper conveyancing processes • Conveyancing (Sale of Land) Regulation 2010 • Encouraging appropriate early guilty pleas • Review of the Water Act 2007 (Cth) • Parliamentary Inquiry into Domestic Violence in Australia • Rule 58 Solicitors advising on loan and security documents • Commonwealth legal assistance funding • Telecommunications (Interception and Access) Amendment (Data Retention) Bill 2014 • Migration Amendment (Maintaining the Good Order of Immigration Detention Facilities) Bill 2015

• Productivity Commission - Workplace Relations Framework Inquiry • Parkes Project: NSW Workers Compensation legislation • Limitation periods in civil claims for child sexual abuse • Litigation representatives in the Family Law Courts • Review of the Coroners Act 2009 • Motor Accidents Compensation Regulation In addition to the prolific output of submissions, the Policy and Practice team responded to additional special project needs. Two community forums to discuss workers compensation reform were held in Penrith and Lismore to highlight the impact of reforms made by government in recent years. The Family Law Settlement Service continued on a year-round basis and the 2014 addition of the Contract for Sale and Purchase of Land was released on an exclusively digital platform. The growing profession The New South Wales legal profession continued to grow over the past year. As at 30 June 2015 , there were some 29,230 practising solicitors in New South Wales. This represents an increase of 1,081 , or 3.8 per cent, from 30 June 2014 . Of this total number, 25,826 were practising members of The Law Society of New South Wales.

Legal policy and representation The Law Society’s legal policy and advocacy output over the past year has been prolific. The high order of expertise, which is so well harnessed by our network of policy committees, is well seasoned by our excellent team of policy lawyers. Foremost, however, in terms of volume and complexity over the past year, was the completion of a large tranche of work finalising preparations for the implementation of the Legal Profession Uniform Law. The Law Society worked closely with the Law Council of Australia and the Department of Justice to finalise the regulatory framework and support the implementation of the new regulation. The ultimate legislative package, whilst being imperfect, improved greatly from the earlier iterations of legislative proposals. The Law Society worked tirelessly with its stakeholders to develop a package that held in balance the needs of the entire practising profession in New South Wales. We were particularly mindful of the impact of changes to compliance requirements on sole practitioners and small firms in the private profession. The number of changes made towards the conclusion of the reform process delivered on this need for a balanced approach. Similarly, the 2015 State Election Policy Platform involved a broad consultation. Following its release, the Law Society published the responses it received from the NSW Coalition parties as well as the NSW Labor Party and Greens prior to the New South Wales election. Similarly, the Productivity Commission Access to Justice Report has required a substantial effort on the Law Society’s part to prepare a high quality submission to the Inquiry and to now develop an appropriate response to the various recommendations.

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CHIEF EXECUTIVE OFFICER’S REPORT

Thought Leadership

Communicating with the profession

Professional development Education

The 2015 theme of the Law Society’s Thought Leadership program was ‘Australia in the World’. The program has further developed The Law Society as a thought leader, championing projects that will help shape the profession into the future. The 2015 panel series looked at the contentious issue of refugees, weighed the pros and cons of our federal structure, and reflected on our G 20 host year. The series included successful panel discussion events on the topics of ‘Sovereign Borders and Anatomy of a Nation’, with a luncheon on the Global Infrastructure Hub featuring Mr Chris Heathcote, CEO, Global Infrastructure Hub. The Advancement of Women project continued as a focus of the Law Society’s Thought Leadership initiative throughout the past 12 months. 2015 saw the launch of a series of breakfast forums aimed at creating an opportunity for women in leadership roles in the law to gather and enable great conversations, share learning and experiences, and develop more supportive and collegial relationships with like-minded, aspirational female colleagues. Our popular Women’s Mentoring Program was also relaunched, to very positive reviews.

Over the past year, the major focus for the communications of the Law Society has been on the launch of the Legal Profession Uniform Law, as well as expanding and sharpening existing communications channels. At the beginning of 2015 , new templates were launched for segmented newsletters (The Big Picture, In the House, Public Record, Smalltalk, Scope and Momentum, as well as NSW Young Lawyers Debrief). This helps to streamline content and has contributed to a lift in open rates in engagement with the profession. New communications developed included templates for Federal and Supreme Court newsletters so the Law Society can assist in sending important regulatory updates to the profession according to immediate need. Importantly, the Law Society Journal (LSJ) has continued to go from strength to strength, with the latest CAB Audit revealing a growing circulation. The publication was named Association and Member Organisation Magazine of the Year at the Publishers Australia Excellence Awards in November 2014 . The recently developed LSJ app has been very well received.

The Law Society’s CPD program continues to grow, both in volume and diversity of content. Our market share has increased by 20 per cent over the past 12 months, with exponential growth in live streaming of seminars and online training. We continue to design, develop and implement a wide range of professional development programs, varying from high level conferences to skills workshops for junior lawyers and master classes in substantive areas of law. One such CPD program, Confidence in the Courtroom – Family Law, designed by the NSW Young Lawyers Family Law Committee, won an international award in August of this year, an indication of a very high standard. The collaboration with our Young Lawyers committees is a strong feature of this success. The advent of the new Legal Profession Uniform Law saw close to 100 CPD sessions offered state-wide, covering the key changes. The 2015 Specialist Accreditation Program was one of the largest yet, with over 200 applications. Improvements in efficiency and practicality of delivery methods were implemented this year with the use of new technologies. Dedicated CPD for accredited specialists was offered in 2015 , including the Annual Specialist Accreditation Annual Conference in August.

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CHIEF EXECUTIVE OFFICER’S REPORT

Lifeline for Lawyers and Specialist Panel

Member benefit enhancements Member/Practice Connexions The Law Society has continued to expand its Member and Practice Connexions benefit programs over the past 12 months, with the inclusion of three new alliance partners. The Member Connexions affinity program now extends to benefits comprising credit cards, health and life insurance, home loans, gym membership, IT requirements, corporate car schemes, and corporate travel lounges. Practice Connexions also expanded with the addition of evidence management software, serviced office solutions, and technology solutions for end-of-life services. Both Connexions programs continued to drive profits back to the Law Society to fund important member services. e-Resources Active work has been undertaken to enhance the member experience and facilitate remote access to Law Society services through the provision of online resources, culminating in a breakthrough arrangement with LexisNexis in an eLooseleaf legal resource library. These eBook packages, known as LexisNexis RED, add an exciting new dimension to our library, allowing practitioners remote access to a package of 15 of the most in-demand products.

Lift upgrade works December 2014 saw the Law Society commence stage one of a three-year full lift modernisation program, including the upgrade and replacement of all equipment currently nearing the end of its life cycle and contributing to safety and reliability issues of lifts, extending to mandatory code upgrade requirements. The project is on schedule, with the last lift works due to be completed by February 2016 . Research The Law Society actively participates in researching and profiling the profession to ensure that our strategic objectives and initiatives are empirically valid. The year saw the Law Society co-ordinating the second National Profile of the Profession , a member survey to hear how we can enhance member experience by enhancing services, and the annual practising certificate survey. Events The year once again saw the Law Society host and co-host a large number of well-orchestrated events across a broad range of topics. Our conference program and networking Function, the 2015 National Access to Justice and Pro Bono Conference celebrating the 800 -year anniversary of the Magna Carta, the Reflections on Corruption Conference, the Annual Corporate Law Conference, the Government Solicitors Conference, and the Rural Issues Conference, comprising a stellar line up of national and international speakers. events extended to the Gallipoli Campaign Centenary Cocktail

The Law Society has been an active proponent of working towards an expansion of the services available to solicitors in New South Wales in order to ensure there is a comprehensive and appropriate network of mental health support services. The Law Society has engaged Lifeline to provide members with access to a free, confidential, 24 - hour telephone support service for solicitors experiencing emotional and psychological distress, as well as other assistance in dealing with work-related health issues. The service is supplemented by an online crisis support service and complemented by the existing suite of health and wellbeing services. In addition to having access to the telephone support service provided by Lifeline, the Law Society established a specialist panel of professionals from different disciplines as a supplementary resource for practitioners, enabling direct access to discuss aspects of treatment and advice. These initiatives were consolidated in the 2014 launch of the ‘We’re here for you’ campaign – collating all the information on services offered to members across practice and personal support areas.

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CHIEF EXECUTIVE OFFICER’S REPORT

The office bearers of the Law Society reflect the diversity of the profession in New South Wales, and carry enormous workloads to support the work of the Law Society in addition to seeking to maintain their own legal practice work. In this context, it is apposite that I place on record the gratitude of all staff for the leadership role played by the Council in driving this strategic direction of the organisation as well as supporting so much of the work undertaken by staff. The Law Society would be nothing if it did not have the army of volunteer support that so profoundly enriches its work. John Eades came to the presidency having served on the Law Society Council since 2001 . His commitment to the sustainability of the Law Society and the entrenching of its place as a highly-regarded regulator have been the hallmarks of his tenure, both prior to and during his presidency. His commitment to the viability of legal practice in regional New South Wales has been a feature of his presidential year, but it has been held in balance with a passion for the sustainable practice for all solicitors, working in private practice, the corporate and general house segment as well as for government lawyers. I thank John Eades for his contribution and commitment during the many challenges that have arisen during his presidential year.

The Law Society has developed an excellent staff team. It is a team balanced by regeneration and the importing of new skills. The Law Society also has a large number of staff who have served over many years, and the profession is enriched by the accumulated wisdom and knowledge that these staff have accrued over their many years of service. I place on record my gratitude for the service and diligence of the senior staff team: Kenny Tickle, Magdalena Malota, Gaby Carney, Anne-Marie Foord, John Mitchell and Una Doyle. It has been an immense privilege to work with the President, the Council,

Conclusion There is a relentless rhythm to the demands of a contemporary legal association of the scale and scope of the Law Society. By any measure, the delivery of services to 29,000 lawyers requires an output of significant volume. The profession rightly has high expectations of their Law Society. However, our range of services and advocacy is commensurate with those expectations. The nature of legal practice, and the commercial and community context in which this occurs, is changing rapidly. The Law Society is committed to keeping pace with both the revolution and evolution of the environment within which it functions. The Law Society relies heavily on its matrix of committees and committed individuals. Committee members serve as volunteers, and dedicate significant time as well as knowledge to the process of the profession- supported regulation, legal policy work, and advocacy. The Law Society benefits from a democratised system of policy formulation and governance. To this end, it is well served by its Councillors who, over the past year, have given generously in the work of the profession and the community in New South Wales and beyond.

and the entire staff team in the delivery of the outputs in the 2014-15 year.

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CHIEF EXECUTIVE OFFICER’S REPORT

The Law Society is committed to keeping pace with both the revolution and evolution of the environment within which it functions.

– M ichael T idball

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LAWCOVER GROUP OF COMPANIES CHIEF EXECUTIVE OFFICER’S REPORT

LAWCOVER GROUP OF COMPANIES CHIEF EXECUTIVE OFFICER’S REPORT MICHAEL HALLIDAY

Last year, I opened my report by noting that 2014 was a milestone, given it was a decade since the establishment of Lawcover Insurance.

2015 presents another milestone in the history of Lawcover, as it is the 20 th anniversary of the introduction of the Lawcover Risk Management Education Program (RMEP). Over that 20 -year period, the RMEP has grown from strength to strength through the development and delivery of informative and engaging workshops, seminars, roadshows and briefings for our insured law practices and their staff. We have compelling evidence that the RMEP has contributed to the recent strong financial performance of Lawcover. The Lawcover team has continued to engage with the legal profession through the delivery of new risk management seminars, workshops and roadshows and through what I hope are useful digital communications. A significant highlight for me, and for the excellent team I lead, was the payment of the Policyholder Rebate in 2014 . When added to the reduction in the premium pool for 2015-16 , some $ 32.6 million has been released to the benefit of our eligible insured law practices over the last two years. We have also focused on investing in our people, processes and systems to deliver more contemporary and flexible services to our insured law practices. We have also worked with the various regulators who have been involved in the introduction of the Legal Profession Uniform Law 2015 to enable smooth implementation of the rules and regulations that surround it.

As I often relate, Lawcover’s role goes beyond simple transaction-based professional indemnity insurance cover. By our corporate structure we are a part of the legal profession and we have both a desire and an obligation to meet the profession’s needs. As Chief Executive Officer of Lawcover, a key obligation is to ensure strong financial performance that will support the corporate vision of providing enduring insurance protection to lawyers. I am pleased to report a strong financial result for 2014-15 . Financial performance At 30 June 2015 , we have strengthened Lawcover’s capital position, which provides additional security to our insured law practices. It also provides more options for the Lawcover Board and management to explore ways to keep insurance premiums affordable into the future. Lawcover held net assets of $ 112.54 million at 30 June 2015 , up from $ 93 million at 30 June 2014 . This lifts Lawcover’s Capital Adequacy Ratio to a very strong 289 per cent. Premiums As a result of continuing favourable experience and our strong financial position, the Board decided to lower the 2015-16 primary premium pool by 12 per cent compared to the amount collected in 2014-15 . This occurred in spite of the increasing number of insured solicitors over the year.

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LAWCOVER GROUP OF COMPANIES CHIEF EXECUTIVE OFFICER’S REPORT

Importantly, it is worth noting that the pool is at its lowest point since 2004 , when Lawcover first issued professional indemnity insurance policies in its own right. We will continue to focus on key management strategies to put downward pressure on premiums. Our objective is to provide sustainability and affordability of professional indemnity insurance to the legal profession. Notifications (claims and circumstances) Notifications of claims and circumstances have been trending stable to downwards over the last several years, despite an increase in the number of insured solicitors. The number of notifications reported during the year to 30 June 2013 was 619 (represented by the black line in the graph below). This has fallen to 610 notifications for the year to 30 June 2015 . However, as a proportion, the number of claims has continued to decline (represented by the red line in the graph below).

Percentage of total incurred claims costs – area of practice The following table presents the percentages of total costs incurred by area of practice for the 2014-15 year with comparisons to prior years.

% of Total Incurred 2012-13

% of Total Incurred 2013-14

% of Total Incurred 2014-15

Area of Practice

14

3 3

8 2

General Commercial

7

Sale and Purchase of Business

23

24

17

Conveyancing

6

3

5

Leases

13

21

19

Mortgages and Commercial Borrowing Tort and Workers Compensation

1 7 1 2 7 7

6 3 3

9 7 4 2 3 9

Out of Time Personal Injury

Out of Time - Other

12

15

15

Other Litigation

2

Matrimonial

15

Probate and Wills

2

Others*

100% 100% 100%

Total

* Includes: criminal, immigration, defamation and revenue

We continue to monitor emerging trends in claims and circumstances and, where appropriate, target areas of concern through risk analysis and targeted claims prevention strategies. Solicitors’ Mutual Indemnity Fund Lawcover Pty Ltd manages the Solicitors’ Mutual Indemnity Fund (SMIF) on behalf of The Law Society of New South Wales. I am pleased to advise that at 30 June 2015 there are no current claims liabilities against the SMIF. In closing this report, I wish to again acknowledge the strong commitment of Lawcover’s Board and staff for their dedication and professionalism in working with and on behalf of the legal profession, in order to: • Reduce the incidence and cost of claims, including • Financial costs • Reputational costs • Personal wellbeing costs • Provide a broad professional indemnity insurance policy tailored for the legal profession • Provide availability and sustainability of insurance through affordability It is also important to acknowledge the ongoing support of the legal profession in respect of Lawcover and our objectives. With that support, we remain a strong organisation, operating from a secure financial position and maintaining a commitment to purpose. The SMIF finished the year with funds of $ 77.97 million.

700

Total

600

500

400

Circumstances

300

Claims

200

100

0

2012-13

2013-14

2014-15

THE LAW SOCIETY OF NEW SOUTH WALES | ANNUAL REPORT 2015 | 17

LAWCOVER GROUP OF COMPANIES CHAIR’S REPORT

LAWCOVER GROUP OF COMPANIES CHAIR’S REPORT ROBERT DOLK

I am very pleased to be able to report that Lawcover has completed another successful year, the third year since its transformation process commenced.

Since 1987 , Lawcover has been committed to the protection and

The strengthening of the capital base this year provides further certainty and security to Lawcover’s insured law practices today and into the future. Uncertainty surrounding future claims and costs associated with future claims is a constant issue for examination by the Board. A strong capital base provides the certainty and security to respond to unforeseen deterioration in the claims environment. As a consequence, it also helps to protect against volatility in premiums. Lawcover is led by a Board of Directors with complementary experience and skills. They have been selected to meet all of the requirements of an insurance company regulated by APRA, as well as a deep appreciation of the purpose for which Lawcover exists. We are therefore able to provide a sound governance framework for the company, which in turn enables us to meet both the needs and the expectations of insured law practices. It is the commitment and experience of Board members past and present that has positioned Lawcover so well. I would like to thank the CEO, Michael Halliday, and the wonderful team he leads for both embracing the vision of Lawcover to serve the legal profession and for achieving the benefits from a well-articulated process of change. I would also like to thank Lawcover’s insured solicitors for their ongoing support and for a wide adoption of best practices to minimise the occurrence and cost of professional indemnity claims.

support of the legal profession, firstly through Solicitors’ Mutual Indemnity Pty Ltd (which later changed its name to Lawcover Pty Ltd) and then through Lawcover Insurance Pty Ltd from 2004 . Lawcover has remained dedicated to its role as Australia’s only ‘legal profession owned’ licensed and APRA regulated insurer to the legal profession. It has been immensely satisfying for the Board to note that through a combination of strategic reinsurance and capital management, together with management initiatives to streamline the business, a significant release of capital has been provided to our insured law practices by way of a Policyholder Rebate and lower premiums. We also acknowledge the role the profession itself has had in reducing the incidence of claims through the adoption of good legal practice. The target premium pool for 2015- 16 has fallen to almost the same level as in 2004-05 ($ 69.34 m in 2004 vs $ 70.0 m in 2015 ). Over the same period, the number of insured solicitors has increased by 66 per cent, from 9,858 to 16,339 . The effect of this is that the premium per solicitor averaged from the pool has fallen by 39 per cent since 2004 . In actual cost per law practice, this has been most evident in premium reductions to law practices since 2013 and the Policyholder Rebate in 2014 .

18 | ANNUAL REPORT 2015 | THE LAW SOCIETY OF NEW SOUTH WALES

LAWCOVER GROUP OF COMPANIES CHAIR’S REPORT

The strengthening of the capital base this year provides further certainty and security to Lawcover’s insured law practices today and into the future.

– R obert D olk

THE LAW SOCIETY OF NEW SOUTH WALES | ANNUAL REPORT 2015 | 19

NSW YOUNG LAWYERS PRESIDENT’S REPORT

NSW YOUNG LAWYERS PRESIDENT’S REPORT ELIAS YAMINE

NSW Young Lawyers represents lawyers under the age of 36 or in their first five years of practice (whatever their age), as well as all law students. This totals over 15,000 members, including between 30 to 40 per cent of the practising profession, making NSW Young Lawyers the largest and most active organisation of its kind in Australia.

Services for the profession Mentoring

The organisation is structured around an Executive Council and more than 20 committees, working groups and subcommittees. Although most of the work is carried out by around 500 volunteers, NSW Young Lawyers has the support of The Law Society of New South Wales in respect of its administrative and logistical requirements. The 2015 Patron of NSW Young Lawyers is The Hon Justice Stephen Gageler, Judge of the High Court of Australia. The 2015 charity is beyondblue. In 2015 , following the implementation of the Law Society’s Future Prospects of Law Graduates Report and Recommendations (Report), there have been a number of staff changes in the NSW Young Lawyers office. Liesel von Molendorff was promoted from Executive Officer of NSW Young Lawyers to Head of NSW Young Lawyers and Graduates. This change has seen some restructuring in the NSW Young Lawyers’ office, with Chloe Visser promoted to NSW Young Lawyers Events and Committee Leader. Natalie Vo has recently joined as the NSW Young Lawyers Events and Committee Coordinator.

The highly-regarded NSW Young Lawyers Mentoring Program has continued in 2015 . This year, the program has been given a makeover in its branding and materials and the offering to members has been significantly improved, with in-person and online training for mentors and mentees. Over 120 city and suburban pairs were matched this year as part of the consolidation of the service, with a view to expansion in the years ahead. On the topic of expansion, the regional mentoring program, which originally commenced in Coffs Harbour as a pilot project, is now expanding into at least five further regional areas. The print and online materials from the metropolitan-based program are provided to the local coordinators, who are NSW Young Lawyers volunteer members running the program in their own local regions.

20 | ANNUAL REPORT 2015 | THE LAW SOCIETY OF NEW SOUTH WALES

NSW YOUNG LAWYERS PRESIDENT’S REPORT

We take this opportunity to express our appreciation for all of the volunteers and participants in the program for helping to make the Confidence in the Courtroom program such a success. We look forward to continuing to build upon this award-winning program. Submissions NSW Young Lawyers continues to produce a large number of high quality submissions on all topics and to all jurisdictions, which are highly regarded and often adopted by law reform bodies. A small selection of those submissions for 2015 includes: • Reform of Strata Laws (Property Law Committee) • Special Commission of Inquiry into the Greyhound Racing Industry in NSW (Animal Law committee) • Companion Animal Breeding Practices in NSW (Animal Law Committee) • Integrated Mining Policy (Environment and Planning Law Committee) • Tax Discussion Paper (Taxation Law Committee) • Landholders’ Right to Refuse (Gas and Coal) Bill 2015 (Environment and Planning Law Committee) • Principles and Guidelines for the Care and Use of Non-Human Primates for Scientific Purposes (Animal Law Committee) • Emissions Reduction Fund: Safeguard Mechanism - Consultation Paper (Environment and Planning Law Committee) • The Sentencing Council of NSW (Criminal Law Committee)

• Terms of Reference for the Commonwealth Marine Reserves Review (Environment and Planning Law Committee) • Productivity Commission’s Workplace Relations Framework Inquiry (Workplace and Safety Law Committee) • Draft Copyright Notice Scheme Industry Code (Communication, Entertainment & Technology Law Committee) • Criminal Code Amendment Animal Protection Bill (Animal Law Committee) • Traditional Rights and Freedoms - Encroachments by Commonwealth Laws Issues Paper (IP 46 ) (Human Rights and Environment and Planning Law Committees) • Five Year Statutory Review - Greyhound Racing Act 2009 (Animal Law Committee) • Law Council of Australia Legal Profession Uniform Law Consultation (BushWeb Regional Issues, Business Law, Civil Litigation, Public Law & Government and Human Rights Committees) • Legal Services Council Legal

Confidence in the Courtroom Confidence in the Courtroom is a program designed to help young advocates learn their craft in a supportive and non-threatening atmosphere, with the guidance of actual judicial officers. Having already been rolled out into the Family Court and Local Court (civil jurisdiction), advocates appear in real courts, before real judicial officers, and receive feedback on their advocacy. We expect to expand the program into further jurisdictions as time and resources allow. The next program will be the criminal jurisdiction of the Local Court. We are pleased to announce that the NSW Young Lawyers Confidence in the Courtroom – Family Law program has been recognised internationally, winning an ACLEA (International Association for Continuing Legal Education) “best” award this year. The annual ACLEA awards recognise the contributions of its professional member organisations in the categories of Marketing, Programs, Publications, Public Interest, and Technology. The Award of Outstanding Achievement is given to the first and second runners-up in these categories and the award is in the Programs category. The award was presented at the Chicago ACLEA meeting on 1-4 August 2015 . In making the announcement, ACLEA noted the high number of exceptional entries received this year and the quality and innovation of the entries. Some of the biggest international law schools and professional development providers submit entries for this competition, so winning an award is a tremendous achievement for NSW Young Lawyers.

Profession Uniform Law Consultation (BushWeb

Regional Issues, Business Law, Civil Litigation, Public Law & Government and Human Rights Committees)

THE LAW SOCIETY OF NEW SOUTH WALES | ANNUAL REPORT 2015 | 21

NSW YOUNG LAWYERS PRESIDENT’S REPORT

Services for students This year, NSW Young Lawyers delivered another successful Public Interest Careers Fair. The fair targets areas of law in which students find it harder to get information about employment, such as the community legal sector and government sector. This is but one initiative of the Special Committee of Law Student Societies, in which all law schools across New South Wales meet under the auspices of NSW Young Lawyers. Other initiatives include an intervarsity sports day, women’s mooting, and a wellbeing event. Law Society’s Future Prospects of Law Graduates NSW Young Lawyers was very pleased when, in June 2015 , the Law Society announced the promotion of Liesel von Molendorff to the newly-created position of Head of NSW Young Lawyers and Graduates, which was the first major step in the implementation of the Report. This structure will allow for the interlinking, both strategically and practically, of the implementation of the Report with the work of NSW Young Lawyers. It is expected that the position will facilitate strategic coordination of graduate and employment initiatives in collaboration with universities. In doing so, the new structure will allow for this work to be dovetailed with the work undertaken by NSW Young Lawyers, which enjoys strong links with various student associations. This is, in my view, a significant and positive development that will allow for the recommendations and objectives of the Report to be implemented and achieved in an effective and efficient manner.

Services for the community Fair Work Commission Pro Bono Scheme NSW Young Lawyers was honoured to be asked by the Fair Work Commission to create and support a pro bono service for the Commission. The service is coordinated by the NSW Young Lawyers Workplace and Safety Committee, which sources and coordinates the volunteer solicitors. Solicitors are appropriately trained and supervised, and two appear on a rotating roster on Friday of each week. Feedback on the program, having now run for around 12 months, confirms it is having the desired effect of reducing wasted court time for the Commission and providing an important service for otherwise-unrepresented litigants. The program also received the 2014 Australian Young Lawyer Award for establishing a pro bono scheme. Young Justice Program In a further service for the community, we are continuing the community education for school students in Years 5 to 8 . Rebranded from “Justice Education Training” to the more hip and happening (we hope) “Young Justice”, this year the opening of the program was held at the Supreme Court with our special host, the Attorney-General of New South Wales, The Hon Gabrielle Upton MP. There were approximately 100 students in Years 5 and 6 that attended the first program, and a further 100 students from Years 7 and 8 will attend the program in October. The program aims to provide civic education about important social justice topics such as how laws are made, and the legal rights and obligations of living in a civic society.

Networking events Golden Gavel

As always, the NSW Golden Gavel was an extraordinary success. This year’s comedy public speaking event was held as a breakfast at the Westin, Sydney, and was sold out with more than 800 attendees. The NSW Golden Gavel remains one of the flagship events of the legal profession throughout Australia. The special guest judge was The Hon Michael Kirby AC CMG. Other special guests included the Attorney-General of New South Wales, The Hon Gabrielle Upton MP, and the Legal Services Commissioner of New South Wales, John McKenzie. Young Professionals Charity Ball The Young Professionals Charity Ball, hosted and organised annually by NSW Young Lawyers, was held at Doltone House, Hyde Park, this year. The 510 -person capacity for the venue was sold out several months in advance, with all proceeds to be donated to the 2015 NSW Young Lawyers charity, beyondblue.

22 | ANNUAL REPORT 2015 | THE LAW SOCIETY OF NEW SOUTH WALES

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