Unionised lawyers: a smaller firm has its say

I was interested to read the piece in issue 38 of LawNews about the establishment of the lawyers’ union and what it sought to achieve.

Its goals are noble. But as a director of a medium sized firm that employs about 22 staff (including the directors), I am concerned about the impact some of these changes may have on a business this size, and on smaller legal businesses.

These impacts are not easily absorbed in smallermedium firms without cost increases for our clients.

The big firms surveyed in the article are not reflective of what the overall impact will be for almost all firms throughout the country, of which about 99% are not big firms. The big firms are the true 1% that are asked to comment on matters like this. They employ a plethora of staff and have the capacity to put all of the structures in place to implement any such changes.

A good recent example is AML. The work a firm of our size has had to do over the period of about 18 months to implement AML policies and procedures has been enormous, and the cost has been notable.

It is not just the actual cost of an invoice to a consultant or auditor that is measured. Every hour or day our office manager spends sorting out AML policies and procedures is an hour or day (or week) that cannot be spent on productive work.

I spoke with the COO of a large firm last week; that firm has employed three fulltime staff for AML compliance. While that can be absorbed by a large firm with much greater capital capacity, it is not easily absorbed by the 99% of firms with no such capacity.

The same principle applies for virtually all small-medium businesses in the country when it comes to compliance matters. I went to law school to become a lawyer, a vocation I very much enjoy, but am doing less and less legal work now, and more work keeping the politicians, bureaucrats and government departments satisfied.

The people affected by this are our clients, the very people we are meant to serve.

The same principle will apply if firms become unionised and collective bargaining is implemented, which seems to be the goal of the newly-established union.

The large firms have human resources staff and other executives, who can work fulltime on such matters. For firms of our size, that is not possible. Either the three directors spend time on it, or we will have to add a cost to the business by employing or contracting someone to perform this role.

That cost will be passed on to clients: there is no other alternative.

But the frustrating thing about all of this is that, by and large, I am extremely confident a high percentage of legal firms of our size are owned and operated by decent, caring people, working hard to provide for their staff and their clients.

In my opinion, the well-publicised incidences at Russell McVeagh and other firms are not reflective of the legal industry and could well be isolated to the large firms. Yet we are being tarred with the same brush.

We are meant to be an industry that looks at facts objectively and analyses them in the same way. Yet when it comes to the alleged treatment of our staff, it seems to be a fait accompli that there is a major problem requiring a massive amount of bureaucracy and union-dominated regulations to resolve.

In my opinion, not only is nothing further from the truth but the proposed way forward will be much worse for the very people we are meant to be helping – our clients.

And that is because each minute, hour or day spent on what are, in my view, unnecessary compliance and regulatory matters is a minute, hour or day not helping clients.

They then complain to the Law Society about lack of response or the cost of legal work, both of which are self-imposed by the profession itself.

I also direct these frustrations at an article I read a short while ago in another publication where the NZLS is seeking changes to the Lawyers and Conveyancers Act and its regulations to include mandatory workplace rules and regulations.

Again, the idea is noble but the extra compliance and regulatory impact of such changes on smaller-medium firms is quite burdensome.

Being an optimist, I am sure most owners of smaller-medium firms act in a decent, caring and non-sexist manner anyway.

The large firms can handle any compulsory changes brought about by (unnecessary?) legislative change. But why are the COOs of large firms asked to comment, as occurred in Issue 38, but owners/managers of smaller-medium firms, who are adversely affected in a much greater way, are practically ignored? It is because such people, like me, are overloaded trying to deal with my email inbox?

The large firms do not speak for everyone. Their operating structures and organisational capacity are very different to most legal firms in this country. The Margaret Bazley report was based on incidences at large firms and the issue of junior lawyers working unnecessarily long hours is also apparent at those firms.

As far as I am aware, this firm has not been approached by the ALWU, and therefore any “survey” is not reflective of the legal profession as a whole. Can I please plead with those “activists” who seek “change” not to treat like with like?

Yours in frustration

Nick Kearney
Director
Schnauer & Co Lawyers

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