Section 33 of the Legal Profession Regulation 2007 provides that a law practice may establish a general trust account at any time.
The term "law practice" is defined in Schedule 2 to the Legal Profession Act 2007 to mean:
1. an Australian legal practitioner who is a sole practitioner; or
2. a law firm; or
3. an incorporated legal practice; or
4. a multi-disciplinary partnership.
Except in the case of a law firm consisting of 2 partners, a law firm does not cease to be a law firm as the result of the resignation of a partner. The resignation of a partner simply changes the composition of the law firm. Similarly, the appointment of a new partner changes the composition of the law firm.
Accordingly, whilst it is open to a law firm to open a new trust account each time there is a change in the composition of the law firm, it is not a requirement of the legislation that the law firm do so unless the law firm changes from a law firm to a sole practitioner (as the result of the resignation of one or more partners).
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I agree with this when the situation is such that the firm maintains its status as a law firm - ie consisting of two or more partners. In the situation where one partner resigns from a partnership of two partners and is not replaced, the firm would cease to exist and the practitioner would then be practicing as a sole practitioner and hence a new trust account should be opened.
ReplyDeleteThanks Michael. I agree with your comment and will amend the answer to incorporate your comments.
ReplyDeleteThe answer has now been amended.
ReplyDelete