Annual report 2014 - The Law Society of New South Wales

ANNUAL REPORT 2014

The Law Society of New South Wales | ANNUAL REPORT 2014 | 1

VISION

LEADERSHIP OF THE PROFESSION SERVICE TO MEMBERS A JUST LEGAL SYSTEM

MISSION

01 Activities and services determined by the needs and welfare of members 02 A profession effectively represented at government and community levels 03 A competitive national profession 04 A community served by ethical, competent and independent legal practitioners 05 A community with reasonable and affordable access to justice 06 Ongoing reform of the law and the legal system

© 2014 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

3 4 7 9

PROFILE OF THE PROFESSION

COMPLAINTS AGAINST SOLICITORS CHIEF EXECUTIVE OFFICER’S REPORT

LAWCOVER GROUP OF COMPANIES CEO’S REPORT LAWCOVER GROUP OF COMPANIES CHAIR’S REPORT

17

20 21 25 27 29 33 37 39

NSW YOUNG LAWYERS

CORPORATE GOVERNANCE STATEMENT

LAW SOCIETY COUNCILLORS

MAJOR LAW REFORM SUBMISSIONS

STRATEGIC PLAN 2013–2016

TREASURER’S REPORT

CONCISE FINANCIAL REPORT

expansion of the ‘Know Your Rights’ campaign; and the launch of LSJ, the new look journal. Over the past twelve months our members have continued to engage in increasing numbers with the Society’s social media offerings. The Society’s LinkedIn group gives them an opportunity to connect online with their peers, discuss media and legal reform issues and

contribute to ideas that shape the profession.

Connecting members The Society has services and resources that help members make the most of their practice and career. Society initiatives have included the launch of a new 24-hour, 7 day a week counselling service, Lifeline for Lawyers; continued development of the CPD program including webcasts;

This group has grown to more than 3,426 since its launch in late 2011 with around 3,166 now following the Society on Twitter. Our activities in the social media space continue to grow, and last year we launched a new Facebook page for Society members and the public.

PROFILE OF THE PROFESSION On 1 July 2014 there were 26,481 solicitors registered in New South Wales an increase of 1,133 since last year.

Location of solicitors

Male/female solicitors

Age of solicitors

Male

Female

 35  65 3346 5587 3314 3678 2879 2148 2831 1024 1322 221 35–44 45–54 55–64

50.62% 32.45% 12.60% 3.89% 0.45%

City

Suburban

Rural

Interstate Overseas

Experience of solicitors

Category of solicitors

Male

Female

51.94% 13,755

48.06% 12,726

69.92%

19.10% 10.98%

1135

1600

1986

2756

2232

3180

1645

1821

6757

3369

Male Female

 1yr

6–10yrs

11–14yrs

 15yrs

Private

Corporate Government

2–5yrs

The Law Society of New South Wales | ANNUAL REPORT 2014 | 4

PRESIDENT’S REPORT ROS EVERETT

profession into the future. In 2013, the Society launched the Business Series which engaged with lawyers across NSW on economic matters. Topics included fraud, bribery and corruption as well as directors’ responsibilities and corporate governance. For our 2014 Thought Leadership panel series, we examined how we can protect individual rights without undermining the transformative power of the internet and new technologies.

for more senior women at critical points in their careers and an opportunity for experienced practitioners to share their knowledge and ‘give back’ to the profession. The initial success of this program ensured significant interest in the 2013/14 program, which was officially launched at the Society on 25 September last year and has successfully matched 30 protégés with mentors. I hope to see this program go from strength to strength in future years. Thought Leadership Through its Thought Leadership activities the Society aims to provide a forum for discussion of topics that will shape the legal

Advancement of women All 12 of the recommendations of the initial report into the barriers to women’s advancement in the legal profession had been implemented by March 2013; however the Society has continued to play a unique role in leading discussion and accelerating change in relation to the advancement and retention of women solicitors. This has included new online offerings, workshops and networking opportunities for women, along with continued support for the Women’s Mentoring Program. The Women’s Mentoring Program, which was launched back in 2012, was designed to provide guidance

Topics for discussion for this popular series included cyber bullying, privacy, ethics, and internet regulation.

Attorney General Brad Hazzard MP and The Law Society of New South Wales President Ros Everett at the launch of the Law Society Journal (LSJ).

Members meet keynote speaker Kathryn Fagg at the Law Society’s Women and Leadership luncheon.

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serviced by the Ryde, Balmain, Kogarah and Windsor local courts were the worst affected, with sittings in these areas due to be suspended indefinitely. The Society considers this to be a fundamental access to justice issue and has supported the regional Presidents to raise their concerns through our government liaison and media activities. The Society’s Rural Issues Committee, which focuses on rural specific legal policy issues directly affecting small and sole practitioners, has also been active. In recent months this committee has considered issues including

developments in the area of the Personal Properties and Securities Act 2009, changes to the native vegetation laws, and the operation of farm debt mediation laws. Community engagement The Society is constantly working to improve access to legal services and information for members of the public through channels

Regional representation With over 12 per cent of the profession working in rural,

regional and remote parts of the State, their specific needs and challenges are of particular concern to the Society. We have been working to enhance its programs and services that support rural members, including through online products and resources such as the new CareerHub, our Small Practice Portal and the specifically targeted e-newsletter smalltalk. Cuts to resourcing for NSW local courts foreshadowed by the NSW Government were raised as a major concern by several Regional Law Society Presidents. Communities

such as our specific public information campaigns and annual outreach events.

Law Week brings legal information direct to communities, and I am pleased to report that with 120 events across the state in May the 2013 event was also a great success.

amendments to the Powers of Attorney Act 2003, case law

Commissioner Tim Wilson - Australian Human Rights Commission and Paul Fletcher MP - Parliamentary Secretary to the Minister for Communications discuss the issues of E-Safety and Cyber Bullying at the Thought Leadership event.

Special Guest Speaker Chief Justice Tom Bathurst at the Opening of Law Term Dinner 2014.

The Law Society of New South Wales | ANNUAL REPORT 2014 | 6

PRESIDENT’S REPORT ROS EVERETT

divorce, making a will and motor vehicle accidents. Each guide explains the basics of how the law works and encourages people to see a solicitor for help. National Profession Work towards national profession reform has been progressing well over the past 12 months. The Legal Profession Uniform Law Application Bill 2014 was introduced into the New South Wales Legislative Assembly on 27 March. The Bill, with the full support of the Opposition, was passed into law on 14 May. In a media release following the passage

of the Legal Profession Uniform Application Bill through the NSW Legislative Council on 14 May, the Attorney General thanked the Society for its contribution. We now expect that the new scheme is due to start in early 2015. President’s award and charity We were honoured to have former Justice of the High Court of Australia, Mr Dyson Heydon AC QC as guest speaker at the Annual Members Dinners on 24 October 2013. On the night, the 2013 Presidents Medal was presented to highly respected solicitor, Sam Macedone.

In August members were good enough to give their time and expertise once again for Will Awareness Day 2013, with around 40 seminars in local communities on the theme of “The perils of homemade wills”. The Society is constantly striving to raise the profile of our profession in the community. To this end, in March we officially launched ‘Know Your Rights’, a campaign which aims to show the general public the value solicitors can bring when it comes to solving many of life’s problems. This centres on a series of easy to read online guides to basic legal problems including

COMPLAINTS In 2013/2014, 480 complaint files were opened by the Professional Standards Department.

Complaints opened 2006–2014

Areas of Law*

07/08

Employment Law Criminal Law

10 27 25 26 42 37 7

584 643 545 550 546 480 680

08/09

09/10

Workers Compensation

10/11

Estate/Wills

11/12

Property Law/Conveyancing

12/13 13/14

Family Law

Commercial Law

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Pro Bono Scheme. This year’s recipient, Ms Greta King, is well known for her personal approach to her clients through the Society’s Pro Bono Scheme, and has demonstrated great patience and understanding when dealing with clients, many of whom are the victims of domestic violence or complex family law matters, over many years. I warmly congratulate Ms King and Mr Macedone on

part thanks to the dedication and commitment of its member volunteers and staff. Those members who continue to volunteer their time and expertise year after year help to make this a resilient, innovative and forward thinking organisation. Finally, my personal thanks to the staff and our excellent CEO, Michael Tidball for their commitment and tireless support of my role over the past 12 months.

Mr Macedone’s contribution to the profession has been relentless, both as former President of the St George and Southerland Regional Law Society and as an active member of the Society’s Specialist Accreditation Advisory Committee. Over the years he has also mentored and provided expert advice to many young lawyers, and is regarded to be of the highest standing by those know him and those in the legal profession. As part of the annual Justice Awards, the Law Society President’s Award is presented each year to an individual solicitor for pro bono work through the Society’s

their awards. Conclusion

The Society continues to be a world-leading professional association, and in no small

*1 July 2013 – 30 June 2014

Major Complaint Categories*

Complaints opened, by solicitor status*

195

Personal Conduct

Sole Principal Non Principal Principal

46.80% 30.83% 14.58%

52 65 53 76 0

Communication/Service Non-Compliance Trust Account Matters

Corporate Legal & Non Legal Entity Government Legal Firms Only

4.16% 0.01% 0.01% 0%

Cost/Payment Issues

Other

Not Practising

The Law Society of New South Wales | ANNUAL REPORT 2014 | 8

CHIEF EXECUTIVE OFFICER’S REPORT MICHAEL TIDBALL

new outputs arising from the current three-year Strategic Plan; notably, the provision of continued professional development being a particular success. Financial Performance The past year is of historic significance as The Society recorded a fifth successive operating surplus, with 1974 being the last time this was achieved by the parent entity. Over the reporting period the Society achieved an overall surplus of $1.5 million, with this increasing to $16.2 million when the group’s insurance activities are included. These stable operating results, when accompanied by strong investment returns during the past five years, have seen the Society’s retained earnings increase by approximately $11 million over the same period. The Society’s investment portfolio, which remains conservative consistent with the guidelines approved by Council, returned 6.4 per cent during the year, with an annualised five year return of 7.4 per cent as at 30 June 2014. This is well in excess of our investment benchmarks, and yet another pleasing result. The Society has continued to make strategic investments in the interest of New South Wales

The Law Society of New South Wales (the Society) rose to a series of challenges throughout 2013–14. These included the finalisation of the Legal Profession Uniform Law, the Society’s response to the Productivity Commission Inquiry into Access to Justice Arrangements, as well as initiating responses to a range of Government reform proposals including Motor Accidents/ CTP, Workers Compensation and Criminal Law proposals, The pace of Government reform proposals throughout the past year was constant and required a considered, comprehensive response from a range of the Society’s Policy Committees. Our internal resources were used to their maximum potential to ensure that our legal policy and representational work, along with our media response were always of the highest order. In addition to this work, we continued to launch membership initiatives to keep The Society at the leading edge of member service delivery. A continued strong financial performance of the consolidated entity provided the ability for us to focus our resources on areas of emerging need. In addition, the Society delivered a range of particularly relating to mandatory sentencing.

The past year is of historic significance as The Society recorded a fifth successive operating surplus, with 1974 being the last time this was achieved by the parent entity.

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The Injury Compensation Committee has been particularly active this year with submissions made in response to reviews of both the Motor Accident Authority and the Workcover Authority. The Committee also made strong representations in its response to the statutory review of the 2012 Workers Compensation legislative amendments, recommending changes to the Scheme to address the critical issues of the reduction in the scope of benefits now available, dispute resolution processes and the governance and inefficiencies in the Scheme generally. The Society has also been active in the media in opposing proposed changes to the CTP claims process which will disadvantage claimants. Society Committees have also dealt regularly with issues of procedure and the operation of courts. We have made submissions calling for the adequate resourcing and staffing of courts in both urban and regional areas to enhance access to justice. Serious concerns have been raised as to the impact of funding cuts on the number of serving magistrates, proposed changes to regional circuit courts, downgrading of the Sheriff’s Office and the functioning of the Courts Services Call Centre.

solicitors. During the 2013–14 year this included the provision of some funds to assist with the establishment costs of the National Legal Services Council, and which ultimately allowed these national reforms to progress at a time when the project was faltering nationally. Whilst views on the merits of the national project will vary, it is important to recognise that had the reforms failed and re-emerged at a future point, this may have been in a form which was unfavourable to the interests of the New South Wales legal profession. As it stands, the current and extremely effective co-regulatory model will continue under the new scheme. The Lawcover group, which includes Lawcover Insurance and the Solicitors’ Mutual Indemnity Fund, has continued to deliver professional indemnity insurance for legal practitioners in a manner that represents excellent value for the profession. It is pleasing to note that due to strong financial results and recent favourable claims experience, the Lawcover Board has now reached a position where it is able to return to the profession the benefits of several years of difficult work which were required to build the capital strength of Lawcover Insurance.

Additional information on both the Society and consolidated group financial results can be found in the Treasurer’s Report and accompanying concise financial statements. Legal Policy and Representation The Society has again actively engaged in advocating for positive reforms in the legal and justice systems making over 100 submissions to government, law reform bodies, parliamentary inquiries and the courts. The Society has also supported the Law Council’s work in legal policy reform. Much of this work is driven by the Society’s expert committees comprised of volunteer members who give their time and expertise to review policy proposals, procedural reforms and new legislation. Through this policy development work and the promotion of informed debate, the Society seeks to engage its members to promote a legal system that is fair, balanced and principled.

The Law Society of New South Wales | ANNUAL REPORT 2014 | 10

CHIEF EXECUTIVE OFFICER’S REPORT MICHAEL TIDBALL

ongoing law reform activity throughout the year, with the Society making representations to government strongly opposing legislative changes extending police investigation powers and participating in numerous consultations and reviews. These included a review of the use of consorting provisions by NSW police, and consultations relating to parole, encouraging appropriate early guilty pleas and criminal appeals. Work to complete the development of a national conveyancing system has intensified ahead of a proposed staged commencement starting later this year. The Society has continued to play a leading role, ensuring the interests of NSW solicitors are being represented. The Society has also undertaken significant work in practice based areas such as reviewing the contact for sale of land, participating in a review of the mandatory disclosure documents attached to land sale contracts, seeking a review of court related fees, reviewing the draft Powers of Attorney Factsheets

Concerns have also been raised as to the cost of litigation in an environment of legal aid cuts and high court fees. The Society has also participated in a consultation on Fair Work Commission Decision Appeals and reviewed amended Fair Work Commission Rules and new draft forms for the anti-bullying jurisdiction. This year also saw the establishment of the Family Law Settlement Service as an ongoing program. This Service which was piloted in 2012 is a joint initiative with the courts and the Bar Association for the mediation of appropriate cases in the family courts. There was extensive media coverage surrounding the proposed introduction of mandatory minimum sentencing earlier this year aimed at dealing with drug and alcohol-related violence. The Society maintained its strong opposition to mandatory minimum sentencing through submissions by its Criminal Law, Juvenile Justice, Human Rights and Indigenous Issues Committees. These submissions noted that it removes judicial discretion, is ineffective at deterring offenders, puts undue pressure on the system and disproportionately affects disadvantaged groups. The criminal justice system continued to be a subject of

published by Land and Property Information and strata reform. On the human rights front, the Society has made representations on such diverse topics as the treatment of asylum seekers, serious invasions of privacy in the digital era, protection from racial hate speech, issues papers released by the Royal Commission into Institutional Responses to Child Sexual Abuse, children in immigration detention and the retention of the Independent National Security Legislation Monitor. The Human The Society has been closely involved with the reform of child protection legislation in NSW. The Indigenous Issues and Family Issues Committees made a joint submission in 2013 to the Department of Family and Community Services in respect of its discussion paper. The Indigenous Issues Committee made a further submission to the Government, Opposition and cross bench on the Child Protection Legislation Amendment Bill 2013 tabled at the end of last year. Another submission from the Society which benefitted from comments incorporating differing perspectives was the review of Rights Committee was also responsible for a successful human rights community education program.

11 | ANNUAL REPORT 2014 | The Law Society of New South Wales

Brisbane, and to hold a Law Week event featuring Indigenous women lawyers. This year has also seen the Society develop and begin to implement a program which aims to provide pro bono assistance to Indigenous entrepreneurs. Now in its third year, the Society’s Indigenous Issues Committee has been very active in making submissions to government on relevant policy areas including native title, land rights, child protection and reforming the Aboriginal Cultural Heritage system in NSW.

Crown Lands legislation with comments from the Property Law, Rural Issues, Indigenous Issues and Environmental Planning and Development Committees. The Society’s Reconciliation Action Plan has completed its second year of operation. We are proud to have fulfilled two years of financial and in-kind support for Ngalaya, the NSW association of Indigenous lawyers and law students. The Society’s support enabled Ngalaya representatives to attend the World Indigenous Conference held in

Our New Communications There is no more challenging task in running the Society than ensuring that it communicates with the profession and the public in a highly effective manner. Over the past year, the Law Society Journal, now known as LSJ following member research and feedback, has been refreshed. The profession’s response in relation to this change has been overwhelmingly positive. The Journal is usually supplemented by Monday Briefs which appears on a weekly basis.

Small practice owners

Law Society Journal

Weekly newsletter

Small firms

Mid-sized firms

Large firms

Corporate lawyers

Government lawyers

News on professional education

Member service and product updates

NSW Young Lawyers

Specialist Accreditation

The Law Society of New South Wales | ANNUAL REPORT 2014 | 12

CHIEF EXECUTIVE OFFICER’S REPORT MICHAEL TIDBALL

The rollout of augmented newsletters has also been well received by the profession, as evidenced by their ‘open rates’, which are carefully tracked. These are smalltalk (small practice owners), Momentum (mid-sized firms), Scope (small firms), Public Record (Government lawyers), the Big Picture (large firms), and In- House (Corporate lawyers). In addition to these newsletters, other targeted communications include Debrief (New South Wales Young Lawyers), Specialist Matters (Specialist Accreditation), The Education Quarterly (news on professional education) as well as member service and product updates provided by Member Connexions and Practice Connexions. Professional Development The regeneration of the Society’s CPD program in mid-2013 has resulted in significant growth, both in terms of market share and variety of programs on offer. One of the main objectives of the revitalised program has been to align professional development offerings with member needs, thus providing quality training and support where it is most beneficial.

welcomed in 2013 following the program’s largest ever intake of candidates. Thought Leadership The Society’s Thought Leadership discussion, raising awareness and changing behaviour on issues that impact the profession. The popular program continued in 2014, with the launch of a major series focusing on ‘individual rights in a digital age’, which examined how we can protect individual rights without undermining the transformative power of the internet and new technologies. The Series included three successful panelled discussion events on the topics of “Privacy in a Digital age”, “Regulation of the Digital Frontier” and “Cyber Bullying”. On top of that, the Advancement of Women project continued with a Thought Leadership Luncheon on the topic of “Women and Leadership” with keynote speaker, Kathryn Fagg. program continues to play an important role in leading

As a result, Society market

share has increased by a third in twelve months, with lawyers now completing approximately 3,000 more CPD hours with the Society than in previous years. Web based delivery also grew significantly, with live streaming of seminars particularly well received and take up of online training increasing by almost 50 per cent. Central to our programming philosophy are quality and relevance, resulting in a broad program of professional development for each member segment, a strategy that has clearly resonated with the profession. Going forward, we will continue to build on this strong foundation and enhance the range on offer, with increasing emphasis on high level intensives and business skills training. The Specialist Accreditation Program continues to be well supported, offering five areas of law in 2014. Renewals remain steady, and over 100 new specialists were

13 | ANNUAL REPORT 2014 | The Law Society of New South Wales

Community Programs As the voice of the profession, the Society has a duty to ensure the combined wisdom of our members is heard in the wider community and that solicitors continue to play a positive role in shaping our society. We continue to do this through a range of community programs such as Law Week, Mock Trial and Mock Mediation and the Speakers Bureau. In 2014, Law Week saw members of the legal profession heavily involved in many events, with many hours donated to giving education talks at libraries, schools and other legal events. The Young Lawyers Golden Gavel was once again a sell-out event, attended by over 600 people and show casing the wit and wisdom of some of the finest ‘up and coming’ young legal minds amongst the profession. The Society’s school based programs; Mock Trial and Mock Mediation continue to be an important support and resource for school students, building their knowledge of the law and legal processes. In addition, these competitions, along with the Speakers Bureau program, give solicitors the chance to engage with the community at a local level.

Member Benefits The Society has seen both the Member Connexions and Practice Connexions benefit programs grow over the past twelve months, with the inclusion of six new alliance partners. They joined the broad portfolio of companies who offer discounts and exclusive products for Society members. Member Connexions has proven again to be a popular affinity program, with benefits including credit cards, health and life insurance, home loans, gym membership, IT requirements, corporate car schemes and premium wine selections. Practice Connexions also expanded following its launch last year, with the addition of managed IT services, leasing negotiations and document storage. When combined with print and digital legal products, office stationary, corporate travel lounges and car hire, the programs’ range of business products and services became increasingly relevant and beneficial to Small Law firms. Both Connexions programs continued to drive profits back to the Society to fund important member services.

Database Modernisation and Migration Project In recent years the Society has done much to strengthen the back end of its business operations, to ensure that the Society’s unique roles as a co-regulator and new membership service provider are reflected in state of the art technology and infrastructure. To this end, we are currently in the final stages of completing a Database Modernisation and Migration Project, which will equip the Society with a scalable and sophisticated database. It is expected that this will provide for the Society’s database needs in a secure and highly advanced platform environment for many decades to come.

The Law Society of New South Wales | ANNUAL REPORT 2014 | 14

CHIEF EXECUTIVE OFFICER’S REPORT MICHAEL TIDBALL

process. Similarly, our work as a co-regulator heavily draws upon the time given by so many solicitors who serve on these various committees. This work is voluntary, and ensures that the most appropriate expertise is applied to the work at hand. The Council of the Society makes an enormous contribution to the profession through contributing to the governance process, as well as very often undertaking onerous work with committees. The Society Council is an appropriately diverse body, and the profession is served by a remarkably committed group of individuals. Ros Everett has served the profession in the office of President this year, and has acquitted herself with enormous dedication and diligence. The energy which she has brought to projects which she identified as being critical for her year allowed us to focus strongly on regional practice and the needs of smaller firms. Ros’ sense of justice and her commitment to asserting the Society’s position with strength has been admirable and in the profession’s interests. Finally, for my part, I have been supported by a remarkable group of Senior Staff. Kenny Tickle, Magdalena Malota and Heather

Moore are talented individuals who are deeply committed to the work of the Society and the pursuit of excellence in all we do. Anne Finet recently resigned after nine years of driving innovation and pioneering bold improvements in our membership services and communications, and I place on record my gratitude for her work. The challenges facing the Society have grown more complex in recent years and it is a pleasure to work with the President, the Council and the Senior Staff ensuring that we honour the trust placed in us and our respective leadership roles.

Conclusion The Society operates within an environment that is constantly changing.

The organisation must have integrity and the highest standards as a representative member association as well as being a co-regulator protecting the highest standards of practice. It must also deliver valuable outputs. In undertaking these functions, it is crucial that the Law Society appreciates the challenges of modern practice in an increasingly competitive and challenging professional services market and, in turn, the broader economy. The Society, in providing leadership to the profession and the community, draws heavily upon the many contributors from the profession who so generously give of their time. The committee system is at the core of the work that the Society is able to undertake as a leader in developing legal policy submissions and inputs into the law reform

15 | ANNUAL REPORT 2014 | The Law Society of New South Wales

LAWCOVER GROUP OF COMPANIES CEO’S REPORT MICHAEL HALLIDAY

On this sound financial base, over the last two years we have invested in operational efficiencies including streamlined information technology, more effective and flexible claims handling, a more dynamic risk and capital management approach and significantly expanded practice support services, the effectiveness of which has been evidenced by actuarial analysis. In June 2014 the company relocated to more modern premises enhancing the ability to provide efficient and effective service to our insured law practices. Financial Performance I am pleased to report Lawcover’s strong financial results to the profession. Our secure financial position provides a platform for our commitment to deliver affordable and secure professional indemnity insurance today and into the future, backed by exceptional standards of service. The company holds net assets of $93 million at 30 June 2014, up from $88.9 million at 30 June 2013, an increase of $4.1 million.

As noted in the Chair’s report, Lawcover’s role has not altered in that time. However our role goes beyond transactional insurance based cover. By our corporate structure we are a part of the legal profession and as such we have both a desire and an obligation to assist lawyers in optimising the practise of law and thereby minimise the likelihood of claims of negligence. We do this by the provision of risk management and claims prevention activities through our specialist team in Practice Support Services. These activities are aimed at improving the professional lives of solicitors with a consequential benefit that it can improve personal wellbeing. There is compelling evidence to support the effectiveness of the various programs we run and about the benefits for those who participate in them. One of the key measures of the success of the programs is the lower than expected incidence of claims and costs associated with those claims. One of the key outcomes of that is our continuing strong financial position together with the provision of a Policyholder Rebate to eligible insured law practices in the new financial year.

The CEO Report for 2013/14 represents a milestone, as it is a decade since the establishment of Lawcover Insurance in 2004.

17 | ANNUAL REPORT 2014 | The Law Society of New South Wales

solicitors and to their efforts in working with and on behalf of the legal profession to: • Reduce the incidence and cost of claims, including: • Financial costs • Reputational costs • Personal wellbeing costs • Provide a broad and enduring professional indemnity insurance policy tailored for the legal profession • Provide availability and sustainability of insurance through affordability I also wish to acknowledge the ongoing support of the legal profession in respect of Lawcover and its objectives. It has been a genuine pleasure meeting many of you since I commenced as CEO two years ago and learning of your own commitment to the legal profession and the best practice of law.

Premiums Since 2012/13 the size of the Primary premium pool has fallen by more than 4 per cent, despite an increasing number of insured solicitors year on year. Our focus will continue 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 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 for the year to 30 June 2012 was 635. This has fallen by more than 5 per cent to 601 notifications reported for the year to 30 June 2014. Solicitor’s Mutual Indemnity Fund Lawcover Pty Ltd manages the Solicitors’ Mutual Indemnity Fund (SMIF) on behalf of The Law Society of New South Wales. In closing, I wish to acknowledge the outstanding commitment of Lawcover’s staff to our insured Notifications (Claims and Circumstances)

The Law Society of New South Wales | ANNUAL REPORT 2014 | 18

LAWCOVER GROUP OF COMPANIES CEO’S REPORT MICHAEL HALLIDAY

Number of claims finalised

Policy year

2013/2014

2012/13

2011/12

2010/11

Percentage of finalisations

32%

83%

91%

98%

Figures exclude closed/transferred files

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 2013/14 year with comparisons to prior years.

Percentage of TI (%) 2013/14

Percentage of TI (%) 2012/13

Percentage of TI (%) 2011/12

Area of Practice

Commercial

3

8

10

Sales & Purchase of Business

3

2

7

Conveyancing

24

17

13

Leases

3

5

5

Mortgages & Commercial Borrowing

21

19

23

Tort & Workers Compensation

6

9

5

Out of Time Personal Injury

3

7

4

Out of Time- Other

3

4

0

Other Litigation

15

15

11

Matrimonial

2

2

3

Probate & Wills

15

3

3

Others*

2

9

16

Total

100%

100%

100%

* Includes: criminal, immigration & defamation

Percentages are rounded to the nearest complete number

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.

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LAWCOVER GROUP OF COMPANIES CHAIR’S REPORT ROBERT DOLK

It is a decade since Lawcover Insurance was formed in 2004 to provide reliable, sustainable and high quality professional indemnity insurance to the NSW legal profession. Lawcover Insurance was uniquely established as Australia’s only ‘legal profession owned’ licensed and Australian Prudential Regulation Authority (APRA) regulated professional indemnity insurer. During this time it has gone from strength to strength. With dedication Lawcover has pursued its role - To rigorously defend insured solicitors against unmeritorious claims, but equally to provide quick and fair compensation to consumers of legal services for legitimate claims. Through reinsurance and prudent capital management, Lawcover has been able to build a strong capital base while maintaining a stable premium pool. Lawcover has also invested in a number of operational initiatives including in its risk and practice support services aimed at embedding best practice and thereby reducing incurred claims. The effect of these initiatives has been a further strengthening of our capital base to the extent that Lawcover is in a position to pass on to eligible insured law practices the releases from claims reserves that are excess to an actuarially determined prudent margin.

The Policyholder Rebate will be provided to eligible law practices following the finalisation of our 30 June 2014 financial year results. In addition current trends may support the possible reduction of insurance premiums in the future. 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 mission 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.

It is with pleasure that I am able to report that Lawcover Insurance has successfully closed its second transformational year.

The Law Society of New South Wales | ANNUAL REPORT 2014 | 20

NSW YOUNG LAWYERS THOMAS SPOHR PRESIDENT

makeover in its branding and materials and the offering to members significantly improved, with in-person and online training for mentors and mentees. Over 100 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 two other regional areas. The print and online materials from the metropolitan-based program are provided to the local coordinators, who are Young Lawyers volunteer members running the program in their own local regions. 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.

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. The organisation is structured around an Executive Council, over 20 committees, working groups and subcommittees, and 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. In 2014, the 51st year of NSW Young Lawyers’ existence, we have been honoured to welcome aboard two incredible new fulltime staff members, Liesel von Molendorff (Executive Officer) and Chloe Visser (Events and Committee Coordinator). Their incredible dedication and commitment has been a breath of fresh air and has allowed the volunteer work to be provided with increasingly high levels of professionalism. Services for the profession Mentoring The highly-regarded NSW Young Lawyers Mentoring Program has continued in 2014. This year, the program has been given a

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.

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• Dispute resolution: frameworks in New South Wales (Civil Litigation Committee) • The Western Australian Shark Hazard Mitigation Drum Line Program 2014–2017 (Animal Law Committee) • Feedback on draft Animal Welfare (Population Control Programs) Bill (Animal Law Committee) • Draft Biosecurity Framework for Protecting NSW (Animal Law Committee) • Post Implementation Review of

Division 7A of Part III of the Income Tax Assessment Act 1936: Second Discussion Paper March 2014 (Taxation Law Committee) • Inquiry into streamlining environmental regulation, 'green tape', and one stop shops (Environmental and Planning Law Committee) • Review of the Animal Welfare Act (NT) (Animal Law Committee) • 2013 Review of the NSW Retail Leases Act 1994

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 includes: • Law and Safety (Criminal Law Committee) • Independent Commission Against Corruption (Criminal Law and Public Law and Governments Committees)

NSW YOUNG LAWYERS COMMITTEES

BushWeb - Regional Issues

Animal Law

Business Law

Civil Litigation

Communication, Entertainment & Technology Law

Continuing Legal Education (CLE)*

Environment & Planning Law

Criminal Law

Family Law

Human Rights

International Law

Property Law

Special Committee of Law Student Societies*

Workplace & Safety Law

Public Law & Government

Taxation Law

* Special Committee

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NSW YOUNG LAWYERS THOMAS SPOHR PRESIDENT

Young Justice Program In a further service for the

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 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. Having now run for around six months, feedback confirms the program is having the desired effect of reducing wasted court time for the Commission and providing an important service for otherwise- unrepresented litigants. In recognition of the hard work and extraordinary value of this scheme to the community and the Commission, NSW Young Lawyers was honoured to accept the Law Council of Australia 2014 Australian Young Lawyer Award for this project. This is the third year in a row that a NSWYL project has won this award - a reflection of the quality service that we provide.

Networking events Golden Gavel

community, we are continuing the community education to school students in years 5 to 8. Rebranded from “Justice Education Training” to the more hip and happening (we hope) “Young Justice”, we will return to Parliament House with 100 students in years 5 and 6, and a further 100 from years 7 and 8 to provide civic education about important topics such as how laws are made, and the legal rights and obligations of living in a civic society. Services for students 2014 will see the first Young Lawyers Public Interest Careers Fair. The fair will target areas of law in which students find it harder to get information about employment, such as the community legal sector and government. This is but one initiative of the Special Committee of Law Student Societies, in which all law schools across NSW meet under the auspices of NSW Young Lawyers. Other initiatives include an intervarsity sports day, women’s mooting, and an equity brunch, at which a high-profile speaker provides insights into areas of discrimination or social hardship.

As always, the NSW Golden Gavel was an extraordinary success. The comedy public speaking event, held as a breakfast at the Westin, Sydney, had over 600 attendees and remains one of the flagship events of the profession. Young Professionals Charity Ball The Young Professionals Charity Ball, hosted and organised annually by NSW Young Lawyers, in 2014 is due to be held at The Ivy. The 420-person capacity for the venue was sold out several months in advance of the event, proceeds for which will go to the 2014 Young Lawyers charity, the Indigenous Literacy Foundation.

About the charity The Indigenous Literacy Foundation’s mission is to make a positive difference in the lives of Australian Aboriginal and Torres Strait Islander children by focusing on ways to

improve their literacy levels.

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David Mierendorff from Allens - The 2014 Young Lawyers Golden Gavel Winner.

The 10 Contestants of the 2014 Young Lawyers Golden Gavel Competition.

Attendees at the launch of the NSW Young Lawyers Mentoring Program.

Young Lawyers members enjoying The 2014 Young Professionals Charity Ball.

The Law Society of New South Wales | ANNUAL REPORT 2014 | 24

CORPORATE GOVERNANCE STATEMENT

This framework: • Defines the Society's mission and the Council's role; • Defines Councillor and office bearer roles, responsibilities and accountabilities; and • Provides procedural guidelines in relation to Council committees, reporting obligations of representatives on outside bodies and control of the Council's agenda. The Council The Council carries out its responsibilities in accordance with the following mandate included in the Society's Memorandum and Articles of Association: • The Council shall consist of 21 elected or appointed Councillors together with ex officio members (any serving senior office bearer whose elected term has expired); • The Chair of the Council shall be the President of The Law Society of New South Wales; • The Council may meet as it thinks fit (Council meets monthly, with special meetings convened as required). Councillors in office at the date of this Annual Report and his or her attendance at monthly meetings in the 2013/2014 financial year are as follows:

• R Everett (President) (11 of 12) • J Eades (Senior Vice President) (12 of 12) • G Ulman (Junior Vice President) (11 of 12) • P Wright (Treasurer) (11 of 12) • J Dobson (Immediate Past President) (12 of 12) • D Browne (10 of 12)

The objective of The Law Society of New South Wales’ (the Society) governance framework is an efficient Council that is forward-thinking and outcome-driven in leading the profession, representing its

• J Dowd (11 of 12) • E Espinosa (8 of 8) • P Garcia (9 of 12) • J Glowrey (12 of 12) • R Harvey (12 of 12) • D Humphreys (10 of 12) • Z Kekeff (12 of 12) • C Kenny (11 of 12) • M Macken (12 of 12) • R Mooy (11 of 12) • T Spohr (7 of 8) • T Stern (10 of 12) • P Suttor (8 of 12) • J van der Plaat (11 of 12)

members and addressing the public interest.

• M Warton (12 of 12) • P Waters (11 of 12) Councillors who retired or resigned during the 2013/2014 year and meetings attended were: • H Fairhall (3 of 4) • A McMurran (3 of 4) • A Rose (3 of 4)

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recommendations and advice of external auditors and other external advisers on the operational and financial risks that face the Group. The Council ensures that the recommendations made by the external auditors and other external advisers are investigated and, where considered necessary, appropriate action is taken to ensure that the companies in the Group have internal controls to manage the key risks identified. Both directly and through its Audit Committee, the Council investigates ways of enhancing existing risk management strategies. Code of conduct As elected representatives of the solicitors of New South Wales, members of the Council acknowledge their responsibility to: • Put the interests of the Society's members ahead of personal or sectional interests; • Act with integrity; • Respect the confidentiality of Council business; • Adhere diligently to the Society's mission and Council’s role; • Avoid conflicts of interest as prescribed in the Manual for Councillors; • Respect the values inherent in the Council’s statement of ethics for solicitors; and • Meet statutory requirements.

The primary responsibilities of the Council are to: • Set vision, objectives, policies and strategic directions; • Communicate and liaise with members and other stakeholders; • Ensure compliance with statutory requirements; • Assess and manage risk; and • Monitor organisational performance. Finance Committee The Council's Finance Committee is convened annually and comprises the Treasurer (Chair), three other Councillors selected by the President and senior officers of the Society. Current members of this Committee are: Councillors P Wright (Chair), J Dowd, R Harvey and G Ulman who meet with M Tidball (Chief Executive Officer); and K Tickle (Chief Operating Officer). The primary responsibilities of the Finance Committee are to: • Advise on the Council's budget and strategic plan; • Develop investment policies and guidelines; • Consider allocations for staff salary increases; and • Approve capital expenditure up to $100,000.

Audit Committee The Council’s Audit Committee is convened annually. Its membership comprises the Treasurer and four other Councillors selected by the President. Current members are Councillors J Eades (Chair), J Dowd, E Espinosa, P Garcia and P Wright. Meetings are held quarterly but more frequently if considered necessary. A special meeting is always convened, generally in late August, to discuss the annual financial statements. The Audit Committee reviews the activities of the Law Society Group of companies in key financial areas and ensures that appropriate internal control systems, audit processes and risk management strategies are in place. It also consults routinely with the Society’s external auditors, the Chief Executive Officer and the Chief Operating Officer. The Audit Committee process promotes accountability and provides Council with additional assurances regarding the quality and reliability of information used by the Council. Risk management The Council is responsible for corporate governance within the Law Society Group of companies. The Council monitors the operational and financial aspects of the Group's activities and, through the Audit Committee, considers the

The Law Society of New South Wales | ANNUAL REPORT 2014 | 26

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