Life in the law is about to become inestimably more difficult for employers, risking closure of firms and worsening Australia’s access to justice problem.

Whether Australians realise it or not, unmet legal need is rising in Australia, with many people not recognising that they have a legal problem or that their problem may be solved by seeking legal advice and legal remedies.

During 2024, two Commonwealth legislative reforms will disproportionately impact the practise of law.

The first is the introduction of legislation to protect against using law firms to launder money and/or process money for the purposes of enabling terrorism. The second is by way of industrial relations reform, the right to disconnect and its incompatibility with the practise of law.

Dealing with the likely introduction of anti-money laundering and counter terrorism (AML/CT) legislation first, Australia has been hopelessly behind all other OECD countries in this respect, including the United Kingdom and New Zealand.

These tranche 2 reforms have been long overdue.

The Attorney-General’s Department has drawn attention to our laggardly approach, stating that: “Out of more than 200 jurisdictions, Australia is now one of only five jurisdictions in the FATF Global Network, alongside China, Haiti, Madagascar and the United States, that do not regulate tranche-two entities”.

In short, we have failed to meet our international obligations and the federal Attorney-General and federal government are determined to do what the former federal government failed to do, and that is to enact AML/CT legislation that will capture many areas of professional services – the law included.

Whenever legislation is enacted, it is necessary to ask ourselves what mischief the legislative reform seeks to cure. It is natural and expected that Australia should not be a light touch for money launderers and those seeking to wash money to use it for terrorism. But are we?

The conventional knowledge is that we are. Having recently visited the Law Society of England and Wales, that jurisdiction’s lawyers were told the same thing. But after living for a long period with AML/CT legislation and regulation in the UK, it has proved that it really didn’t have a problem to begin with – at least not that lawyers carrying out their duties to the administration of justice were reasonably able to detect.

Take a recent case where an Albanian property development syndicate bought and built housing in London. There were no red flags to be seen by the lawyers undertaking the commercial transactions, conveyancing and leasing. The money was legitimate. The land transactions were legitimate, at least superficially.

Law enforcement agencies finally worked out that what was happening was that the supposed tenants were actually members of a crime gang. And although the land transactions were entirely above board, the laundered money was the rent that was being “paid” by crime syndicate members to “landlords”. It was fake rent and actually the proceeds of crime. But how were the lawyers to know? They are not police.

The AML/CT legislation and accompanying regulations in England and Wales is prolific and prescriptive in its creation of regulatory obligation, so much so that in fact almost all the prosecutions of lawyers involve alleged offences that had nothing remotely to do with money laundering, but instead are for breaching the regulations themselves. Talk about bureaucracy gone made. They are being prosecuted not for enabling money laundering but for breaching the rules allegedly supposed to stop it.

Recently the Law Society of England and Wales publicly called for the prosecutions of nearly 1,000 lawyers over breaches just of the regulations themselves to be dropped, as a pointless waste of public money and not in the public interest. It is reminiscent of a Yes Prime Minister episode. They are being prosecuted, Sir Humphrey, for breaching rules that were government made, even though not in a single instance was money-laundering even present in the first place. Madness. Unfortunately there is little likelihood those prosecutions will be abandoned.

As to the right to disconnect – and after I had checked the calendar to ensure it wasn’t April 1 – I started to reckon with what it meant for the legal profession; how we could reconcile our obligations to the courts and the administration of justice if we just shut down at 5pm, and what a convoluted industrial relations nightmare our federal government is about to rain down on hapless employers in the legal sector.

The way the right to disconnect has been enshrined in legislation is intriguing in itself.

An employee may refuse to respond to an employer out of hours ‘unless the refusal is unreasonable’. That is ambiguous to say the least. What test should both employers and employees apply to determine what is ‘unreasonable’?

There is certainly a legitimate criticism to be made of law firms who exploit employed lawyers, expecting them to work unreasonable hours as cash cows for avaricious equity partners. That is just not on. It is also under existing industrial law likely unlawful and actionable.

However, the notion that in the middle of an important and urgent commercial transaction one may go absent, or midway through a trial do nothing for the following day’s litigation, or to suggest to police and criminal lawyers that arrests of alleged crooks conveniently occur between 9 to 5, seems absurd. But in such circumstances is it ‘unreasonable’ for an employer to be chasing an employee after hours to perform such tasks, or does the employer just have to do it themselves?

This feels like legislation enacted by people who have been lifelong employees with little experience of being self-employed or being an employer, and who paradoxically themselves as parliamentarians work obscene hours as ministers of the Crown, as local members, or who answer to the demands of political parties and their members.

The right to disconnect is as impossible for politicians to achieve as those engaged in the administration of justice. The truth is that as lawyers we rarely have the luxury of just turning off, and are largely uncomfortable with the idea to begin with or we wouldn’t be in the practise of law.

Additionally, the right to disconnect risks simultaneously leading to disconnection. It’s certainly not the way I would have chosen to develop a career in the law when I was an employee, but that choice has in large part just been made for us by our central government engaging yet again in a command and control economy. So much for the free market, and insofar as lawyers are concerned, our ethical obligations.

When we take the oath or affirmation in order to practise law. we are swearing to commit ourselves unerringly to the administration of justice, placing the requirement of the court as our first calling, trumping even the obligation to our client. It is the equivalent of the Hippocratic oath for doctors, but with even greater obligations.

Like members of the judiciary, we as lawyers sit at the heart of an independent judicial system with sworn obligations to administer that system. When we take the oath or affirmation, there is no carve out for a non industry-specific, far-reaching industrial edict from a federal government that evidently requires us to just check out of that obligation by disconnecting. It could be argued that that notion is in direct contradiction of our sworn professional obligations.

Moreover, the knock-on effects to employers of lawyers and to self-employed people in the law who are not bound by these unthought through laws, including barristers, is enormous. It is highly prejudicial and potentially damaging to the mental welfare of the self-employed, particularly if they are employers, because they will be obliged to do what their employees, by the virtue of the reform, will not.

It leads to imponderables; must an employer now request a barrister not contact the salaried instructing solicitor after hours because it is breach of law? It impedes our capacity to cater for unmet legal need in Australia and to providing access to justice, because it potentially withdraws from the after-hours field salaried lawyers who would otherwise assist, say in the case of the arrest of a person who is now in police custody. In this sense it may directly impact the administration of justice in this country, by reducing what an employer may ask a salaried lawyer to do.

In short, it is an unrealistic and retrograde step that will thwart the effort to unlock greater access to the justice system for all Australians, and creates two class of lawyer; those who by legislation can ‘disconnect’ and those, who as a consequence of the law, can now never ‘disconnect’. Rarely has a piece of industrial reform been so mangled, with potentially damaging effects across the board; to self-employed lawyers, to the justice system and to those who need help from lawyers.

If adequately managed, the need to answer out of hours calls is not onerous on a lawyer. Preparation for trials can be time-consuming, but trials are conducted far less frequently than in the past. But in the law, when it’s on, it’s on, and that is what we sign up for. It’s what we want, and it’s not merely to satisfy our professional obligations, it is in our DNA.

I will rue the day, when like the needless prosecutions of British lawyers for alleged breaches of AML/CT regulations, Australian legal employers will face legal actions brought by regulatory authorities because they expected of their employees the same commitment to the administration of justice as they themselves have had throughout their careers.

I feel sorry that they will be obliged to take upon themselves duties that by law their employees now should not perform, such as answering out of hours calls from clients and barristers, preparing for hearings, and responding to urgent legal needs out of hours. And I regret the damage that will be caused to their employees’ careers in the law because they may not by law experience the full gambit of what it is to be lawyer, the irony of which should not be lost on us.

And I feel for those graduates who may not ever now be employed as lawyers, because the industrial bar has been placed at such an unrealistic level that self-employed people will just do the job themselves without employing others to help them. In what conceivable way is this a win for the employed? In what conceivable way is this helpful to the administration of justice? It is Stone-Age industrial relations.

The one-size-fits-all approach to legislative reform is often unhelpful. So it has been in the AML/CT approach by the British Government to regulating the legal profession as if it was the author of all sins when it comes to money-laundering in the UK. To lumber the legal profession in Australia with entirely unrealistic right to disconnect laws will likely reduce access to justice and take what can at times be a demanding profession and make it harder for some.

Purported mistreatment of lawyers by lawyers in the legal profession is said to be in large commercial firms some of whom stand accused of having a factory mentality in the management of employed lawyers. However about 85 percent of private lawyers practising in Australia are self-employed or in small and medium sized firms. Whilst small and medium enterprises have an 18 month carve-out from the legislation to prepare for these laws, they do not need this, another broadside from a government seemingly captured by trade union stakeholders with little insight into how private industry actually works on the ground.

As to pending AML/CT reform, the lessons learnt from the U.K. and many other jurisdictions, mean that whilst it is a necessary reform, it can be enacted in a sensitive way that does not crush the proverbial nut with a sledgehammer. It can also be introduced to achieve the desired effect of thwarting money-laundering rather than operating to simply punish the innocent for being bamboozled and overwhelmed by over-the-top regulatory obligations.

Given the zealotry demonstrated by this federal government and its seeming obsession with reforming on principle, without adequate consultation, and with little regard for the engine room of the Australian economy, small and medium enterprise, we should not hold our collective breath.

The law as a profession is about to be on the receiving end of a number of doses of what might be well intended but ultimately ill-designed regulation, just when we thought the practise of law was tough enough. We will all suffer; our clients, the Australian public who are excluded from accessing the justice system (just made worse), lawyers and those who want to be. Some of whom have had their workload and regulatory demands increased, some of whom may never see aspects of legal practice experienced by the self-employed, and some whom won’t realise the dream of practising the law and changing people’s lives at all. Sir Humphrey would be impressed.

Morry Bailes is Senior Lawyer and Business Advisor to Tindall Gask Bentley Lawyers, past president of the Law Council of Australia, a past president of the Law Society of South Australia and a former office-holder in the state Liberal Party.