01 Dec 2014

Professional conduct and responsibilities: An overview for inhouse counsel

by Peter Sise

All lawyers need to be aware of the professional conduct rules of their jurisdiction in their entirety and consider their broad objectives in addition to the literal “dos and don'ts”.

Ethics is an inherent feature of any profession. At its annual general meeting on 26 May 1997, Professions Australia adopted the following definition of “a profession”:

"A profession is a disciplined group of individuals who adhere to ethical standards and hold themselves out as, and are accepted by the public as possessing special knowledge and skills in a widely recognised body of learning derived from research, education and training at a high level, and who are prepared to apply this knowledge and exercise these skills in the interest of others." [1]

Broadly speaking, lawyers have three core ethical duties: a duty to the court, a duty to their client and a duty to obey the law. There are also obligations concerning a lawyer's dealings with third parties. This article will examine these duties as they apply to in-house counsel.

An important source of a lawyer's duties (but not the only source) is the professional conduct rules of the jurisdiction in which the lawyer practises. Professional conduct rules may differ between jurisdictions, although there is a move to harmonise them. The Law Council of Australia created the Australian Solicitors Conduct Rules (ASCR) in 2011 and released an accompanying commentary in August 2013. The ASCR have been adopted in Queensland, New South Wales (NSW) and South Australia, albeit with some slight differences. [2] On 28 May 2014, the Legal Services Board of Victoria announced that it proposes to adopt the ASCR in Victoria. [3] Due to their broad coverage, this article will focus on the ASCR, but inhouse counsel should obviously be familiar with the specific professional conduct rules of their jurisdiction.

The ASCR does not treat inhouse counsel differently from other lawyers. Rule 1.1 of the ASCR states that the rules apply to “all solicitors” while the commentary provided by the Law Council explicitly states that the ASCR apply to inhouse counsel.

Duty to the court

Rule 3.1 of the ASCR states that, “A solicitor's duty to the court and the administration of justice is paramount and prevails to the extent of inconsistency with any other duty”. The ASCR defines “court” as including certain tribunals, an investigation or inquiry established or conducted under statute or by Parliament, a Royal Commission, an arbitration, a mediation or “any other form of dispute resolution”. It may be difficult to define what a duty to “any other form of dispute resolution” may be. It would be safe to assume that it requires the lawyer to act honestly and respect the process. In this regard, the courts have described “respect for the court and respect for the process” as “critically important qualities” for a lawyer along with honesty and objectivity.[4]

Duty to the client

In most cases, the client of an inhouse counsel will be their employer, but an inhouse counsel may be employed by a subsidiary, within a corporate group, that was created to provide services to other subsidiaries and the parent company. In that case, the inhouse counsel's clients may not be their employer. This is an important distinction since the particular type of practising certificate held by an inhouse counsel may only allow them to provide legal advice to their employer and not related entities of their employer. The Legal Profession Uniform Law, which has been passed by the respective Parliaments of NSW and Victoria but is yet to come into force, defines a “corporate legal practitioner” as a legal practitioner who only engages in legal practice for their employer or a related entity of their employer. Once this law comes into force, it will allow inhouse counsel in Victoria and NSW acting as corporate legal practitioners to provide legal advice to a related entity of their employer. In the meantime, an inhouse counsel should check whether they need an unrestricted practising certificate of a principal.

The consequences of not holding the correct practising certificate may be serious. For example, in the recent disciplinary decision of Legal Services Commissioner v Kellahan, [5] a “corporate counsel” gave legal advice to an acquaintance although he held a “non-principal level practicing certificate” which only entitled him to perform legal work for his employer. Among other things, the Tribunal ordered the solicitor not be issued with a practising certificate for three years.

A lawyer owes several duties to their client, such as a duty of confidentiality, [6] the duty to act in the client's best interests, [7] a duty of competence and diligence [8] and a duty to avoid conflicts. [9] These duties are set out in the ASCR but are reinforced by a lawyer's fiduciary duties, common law obligation to exercise reasonable care and perhaps the contractual terms of their engagement. The duty to avoid conflicts consists of a duty to avoid conflicts with former clients and current clients and as well as a duty to avoid conflicts with the lawyer's own interests. [10] Potential conflict may arise where both an IHC's employer and a particular employee are investigated by a regulator or are defendants in a legal proceeding. Another area of potential conflict is where an inhouse counsel joins a competitor of their former employer. Rule 10 of the ASCR addresses conflicts with “former clients”. A conflict may arise because the inhouse counsel has learned of confidential matters during their former employment and it is now in the interests of their new employer to be informed of such matters. Rule 10.2 prohibits a lawyer, who has possession of confidential information of a former client that might reasonably be material to a current client and detrimental to the interests of the former client if disclosed to the current client, from acting for the current client unless the former client has given informed, written consent or an effective information barrier has been established. A “former client” is defined broadly by the ASCR to include a person who has provided confidential information to a lawyer even though the lawyer was not formally retained.

Duty to obey the law

Rule 4.1.5 of the ASCR requires a lawyer to comply with the ASCR and the law. Everyone must comply with the law, but the obligation on lawyers is particularly stringent due to the oath or affirmation they have given to uphold the law. In the recent case of Legal Services Board v Forster, [11] Emerton J sentenced a lawyer to a suspended prison sentence for criminal contempt of court. Her Honour said:

"In my view, legal practitioners should be held to a higher standard when it comes to compliance with Court orders and the preservation of the due administration of justice than ordinary members of the public. Legal practitioners are bound to uphold the rule of law, which is an essential element in any civilised and properly functioning community … the community must be able to look to legal practitioners to shoulder responsibility for the maintenance of the rule of law to a greater extent than persons who do not make their livelihood from the law." [12]

The duty to obey the law can perhaps be viewed as an important aspect of the broad prohibition in r 5 of the ASCR against any conduct which demonstrates that a lawyer is not a “fit and proper person to practise law” or which is likely to prejudice the administration of justice, diminish public confidence in the administration of justice, or bring the profession into disrepute.

Dealings with others in the course of legal practice

There are several obligations that all lawyers must observe when dealing with others in the course of legal practice. The following obligations are of note:

  • A lawyer must be “honest and courteous in all dealings in the course of legal practice”. [13]
  • A lawyer must not deal directly with the client of another solicitor except in the circumstances listed in r 33 of the ASCR, which include:

(i) if the dealing is solely to determine whether the client is actually represented and by whom and

(ii) if the dealing occurs with the prior consent of the other solicitor. This means that an inhouse counsel should only deal with the opposing inhouse counsel of another organisation, if that organisation is represented by an inhouse counsel, unless one of the exceptions in r 33 applies.

  • A lawyer must not take unfair advantage of an “obvious error” of another person if doing so would obtain a benefit for their client which has “no supportable foundation in law or fact.” [14]
  • Rule 31 of the ASCR places obligations on an inhouse counsel in relation to the use of confidential material that has been inadvertently disclosed to them by a lawyer or other person. In the recent decision of Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd, [15] the High Court said that this rule “is an example of professional, ethical obligations of legal practitioners supporting the objectives of the proper administration of justice.” [16]
  • A lawyer must not make unfounded allegations against another lawyer of unsatisfactory professional conduct or professional misconduct. [17]
  • A lawyer must not use various untoward tactics in association with representing a client, such as threatening criminal or disciplinary proceedings if a civil liability owed to their client is not met, making statements which grossly exceed the legitimate rights of their client and tactics which are primarily designed to embarrass or frustrate another person. [18]
  • A lawyer must honour an undertaking given in the course of legal practice and should not seek an undertaking from another lawyer that would require the co-operation of a third party who is not a party to the undertaking. [19]
  • If a lawyer instructs a third party on behalf of their client and the inhouse counsel does not intend to accept personal responsibility for the third party's fees, the inhouse counsel must advise the third party in advance. [20]


In conclusion, it is worth noting an oft-quoted statement of Sir Gerard Brennan AC KBE QC. Sir Gerard said that ethics cannot be reduced merely to rules and if they were, “a spiritless compliance would soon be replaced by skilful evasion.” [21] Although this article has referred to several rules of the ASCR, it should not be taken as suggesting that ethics can be reduced to mere rules. All lawyers need to be aware of the professional conduct rules of their jurisdiction in their entirety and consider their broad objectives in addition to the literal “dos and don'ts”. Further, they should consider what expectations the community has of lawyers, what privileges and powers a lawyer has by virtue of their knowledge and position in society, and how a lawyer should responsibly exercise those powers and privileges as a member of an ethical profession.

This article was first published in Inhouse Counsel, Vol 18 No 10, December 2014


[1] About Professions Australia, Definition of a Profession, Adopted, Annual General Meeting, 26 May 1997, accessed 5 December 2014, http://www.professions.com.au/. [back]

[2] The ACSR as adopted in South Australia contains an additional r 16A concerning legal aid. The ACSR as adopted in NSW contains 17 additional rules, being rr 44-60, which deal with a variety of topics, including legal aid, litigation lending, advising on loan and security documents, conducting another business and stationary. [back]

[3] See RPA Alert 11 of the Legal Services Board, May 2014. [back]

[4] Attorney-General and Minister for Justice v Gregory [1998] QCA 409 at [4] (emphasis added). [back]

[5] Legal Services Commissioner v Kellahan [2012] QCAT 263. [back]

[6] Australian Solicitors Conduct Rules r 9. [back]

[7] Australian Solicitors Conduct Rules r 4.1.1. [back]

[8] Australian Solicitors Conduct Rules r 4.1.4. [back]

[9] Australian Solicitors Conduct Rules rr 10, 11 and 12. [back]

[10] Above, n 9. [back]

[11] Legal Services Board v Forster (No 3) [2012] VSC 640. [back]

[12] Above, n 11, at [15]–[16], citing R v Garde-Wilson [2005] VSC 452 at [8]. [back]

[13] Australian Solicitors Conduct Rules r 4.1.2. [back]

[14] Australian Solicitors Conduct Rules r 30. [back]

[15] Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303; 303 ALR 199; [2013] HCA 46. [back]

[16] Above, n 15, at [67]. [back]
[17] Australian Solicitors Conduct Rules r 32.  [back]

[18] Australian Solicitors Conduct Rules r 34. [back]

[19] Australian Solicitors Conduct Rules r 6. [back]

[20] Australian Solicitors Conduct Rules r 35. [back]

[21] “Ethics and the Advocate”, Bar Association of Queensland, 3 May 1992. [back]

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.