The Law Institute of Victoria faces turmoil and losses … Only 66 percent of practising solicitors are members … The NSW solicitors club is booming with a 90 percent membership rate and a big fat balance sheet
The usual foggy statements were issued in the wake of her departure. LIV president Belinda Wilson, “thanked Ms Wallace for her contribution … She had helped to modernise the organisation … By mutual agreement, Ms Wallace will leave the LIV immediately”.
A fortnight later Wallace made a statement saying, “much has been achieved … it has been my privilege, as the LIV’s first female CEO, to lead the institute through significant change …”
In an unusual move, president Wilson is taking over as acting CEO of the Victorian solicitors’ club.
The Bourke Street sale fetched $30 million plus, which comes as a badly needed top-up for coffers that have been bleeding for several years.
The institute stays on as a tenant in the building until it moves into a new leased HQ.
Wallace had a “difficult relationship” with the LIV council. A few “issues” arouse, none of which were hanging offences. Friends advised her to sit tight, but she thought it was not worth it. There was unhappiness and the job wasn’t working out.
There was a mediation and a period where the CEO didn’t come into the office for two or three weeks and then it was over.
The financial losses are a symptom of several compounding factors.
For instance, the membership base of the LIV is down to 66 percent of the number of solicitors with practising certificates. There are 19,414 PCs in Victoria while the Institute only has 12,825 full-paying members.
In 2002, the LIV retained 90 percent of practising solicitors as voluntary members.
In NSW there are 32,000 solicitor practising certificates, including private, corporate and government practitioners and the Law Society of NSW counts 29,000 solicitors as members – a membership rate of 90.5 percent.
In 2013 Michael McGarvie, the Victorian Legal Services Commissioner, said he would no longer be sending disciplinary complaints to the LIV.
At that point the institute as the co-regulator was handling about 10 percent of the complaints that had been received by the LSC. The Legal Services Board also reduced some of the regulatory funding to the LIV.
The following year the board took over the task of handling licence renewal forms for lawyers in Victoria which meant the LIV no longer controlled the PC data, whereas in NSW the Law Society retained the ticketing and membership functions and continues as a co-regulator.
That combination of functions provides a much more relevant structure for retaining and recruiting members – although the NSW membership is made-up of 22,683 private practitioners, with only 5,900 corporate members and 3,419 from government.
The changes south of the Murray meant that the LIV lost some of its regulatory revenue, which at the time was made up funds from the LSB, memberships, and the sale of services – roughly one-third from each of those sources of revenue.
Needless to say, this new environment was accompanied by a fair amount of fury on the part of some of the LIV old-guard, who accused McGarvie of empire-building and tampering with the “independence” of lawyers – prhaps forgetting these were changes put in place by attorney general Hulls in 2004.
Quite apart from building its membership, the NSW Law Society under its long-serving CEO Michael Tidball reported a surplus of $5 million after tax for the year ending June 30, 2017, including revenue from Law Cover and the Mutual Indemnity Fund. It owns its building in Phillip Street and a well-capitalised APRA approved insurance company.
This compares to an operating deficit last year for the LIV of $1.4 million.
See most recent annual reports: NSW Law Soc and LIV.
The Legal Services Commissioner in Victoria oversaw the legislative shift of the Victorian profession to an independent, but partial co-regulatory model, from one that was significantly self-regulatory. It means the LIV now focuses on trade union functions such as professional development, conferences, parties and balls, plus some regulatory activities like trust account investigations and law firm audits.
Even so, flourishing solicitors’ clubs, such as we find in NSW, should not be complacent. Lawyers, along with other trades, are living in a post-institutional world with a marked shift away from voluntary unionism and support for what were once pillars of the old order.