Requirements for offering legal services on the internet
A growing number of websites offer legal services to New Zealand consumers, ranging from conveyancing, to applications for limited drivers’ licences. It is not clear that all of them comply with legal requirements imposed on lawyers practising in New Zealand.
The following requirements under the Lawyers and Conveyancers Act 2006 and associated regulations are of particular relevance to providers of online legal services:
Practising certificates and practising on own account
Anyone in New Zealand can offer legal information, but only lawyers can provide services in the reserved areas of law as described in s6 of the Lawyers and Conveyancers Act 2006 (LCA), which covers the provision of advice in relation to the direction or management of legal proceedings.
The first requirement for anyone running a website on which they hold themselves out to be a lawyer, and offer legal advice in New Zealand, is to hold an appropriate practising certificate issued by the New Zealand Law Society (NZLS) and to be entitled to practice on own account. To practice on own account a lawyer must have three year’s legal experience from the last five years in New Zealand, complete a NZLS CLE Ltd Flying Start course and satisfy the NZLS that they are a suitable candidate.
When applying for a practising certificate, applicants must give a written undertaking to comply with the fundamental obligations of lawyers (set out in s4 of the LCA). The Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (RCCC) expand upon these obligations and are applicable to all lawyers, including those offering services online.
Electronic provision of information
A client seeking legal advice through a website is entitled to certain information about the lawyer conducting the work for them. In advance of acting for them, a lawyer must provide a client with written information about their fees, their professional indemnity arrangements, the Lawyers’ Fidelity Fund and the lawyer complaint process (Rule 3.4 RCCC). Unless a client otherwise instructs, this information may be provided electronically, so long as it is readily accessible to the client concerned and is available for subsequent reference (Rule 1.7 RCCC).
The client must also be informed of the name and status of the person who will have overall responsibility for the work and also be given some further information set out in Rule 3.5 RCCC.
Payment in advance
If a website requires payment in advance of providing services, as most of them do, this money must be paid into a lawyer’s trust account (s110 LCA). This means the lawyer running the website must be trust account qualified and comply with the legislation regarding trust accounting.
Every lawyer supervising a trust account must complete a course of training, and pass an examination in trust accounting (Lawyers and Conveyancers Act (Trust Account) Regulations 2008, Rule 19(1)). Lawyers running a trust account pay levies to the Financial Assurance Scheme and must make their accounts available for inspections by the Inspectorate.
There is no specific requirement for New Zealand lawyers to maintain a physical address, although they do need to be contactable by their clients and by the NZLS for purposes of renewal of practising certificates. They also need to have their records available to enable the NZLS to organise inspections if a trust account is being operated and in the case of complaints.
Barristers sole are not entitled to accept instructions from the public with few exceptions (Rules 14.4-14.7 RCCC). In offering online legal services, in most circumstances a barrister sole would still require the intervention of a lawyer practising as a barrister and solicitor.
A lawyer running a legal advice website may be required to verify a client’s identity in certain circumstances. The Financial Transactions Reporting Act 1996 requires verification of a client’s identity when lawyers receive funds from clients for the purposes of a deposit or investment or for the purposes of settling a real estate transaction.
Rules 2.5 and 2.6 of the RCCC may also require verification of identity, imposing a general responsibility to be satisfied as to the identity, capacity and bona fides of a client on whose behalf they make representations or issue certificates. In the case of electronic transactions under the Land Transfer Act 1952, a lawyer has a responsibility to take reasonable steps to establish the identity of clients concerned. Where the client is selling or mortgaging a property and the client is not personally known to the certifying lawyer, the lawyer must obtain additional evidence linking the client to the property.
New anti-money laundering and countering financing of terrorism legislation will require “reporting entities” to undertake comprehensive customer due diligence and to have a programme in place to help deter and detect money laundering and financing of terrorism. Lawyers are expected to be covered by the definition of “reporting entity” when the second tranche of the legislation comes into effect.
Lawyers are generally well advised to be satisfied concerning the identity and bona fides of new clients.
Direct solicitation and the reputation of the profession
Lawyers should be mindful of the reputation of the profession in the provision and advertising of online legal services. Lawyers have an obligation to uphold the reputation of the legal profession and avoid any conduct that might bring it into disrepute. Lawyers are also prohibited from directly contacting prospective clients in a way that is “intrusive, offensive, or inappropriate” (Rule 11.2(a) RCCC).
Digital frontier - not the wild west
A lawyer offering services over the internet is limited in what services can be provided. Work that involves face-to-face interaction such as court work, witnessing signatures or taking affidavits is obviously ruled out. In many cases the client will need to be willing to undertake much of the work that the lawyer would normally do. As technology improves though lawyers will be better able to offer services over the internet, and it is likely this will be a growth area. Already overseas there has been a proliferation of “virtual law offices,” with around 20 currently operating in the United Kingdom. However the offering of services online in no way diminishes a lawyer’s legal obligations or the professional standards to which the lawyer must comply.