Law Society and LexisNexis Renew Publishing Agreement |
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Law Society and LexisNexis Renew Publishing Agreement | Solicitors’ Accounts Rules
Law Society and LexisNexis Renew Publishing Agreement 
The negotiations were protracted enough to rival that of a Free Trade Agreement. After months of discussions, proposals and counter proposals, the publishing agreement for
the Singapore Law Gazette (SLG), the official monthly magazine of the Law Society, was finally negotiated to the mutual satisfaction of both parties. On 3 April 2003, the deal was inked by Mrs Arfat Selvam, President of the Law
Society, and Ms Eva Au, Managing Director (Asia) of LexisNexis.
Effective for a period of five years, the collaboration between the Law Society and LexisNexis is not new, with the latter (previously known as Butterworths Asia) having published the SLG since 2000.
Working together, the two parties have revamped the publication several times, once in 2002, to update the look of the magazine, and again, this year, to revitalise its contents. The contents now include in-depth features and
analysis of current legal developments in Singapore and globally. It also includes regular columns on IT, tax, practice pitfalls, practice and procedure, legal management, risk management, as well as legislative and case updates.
Said Mrs Selvam at the signing ceremony, ‘We are happy to reaffirm our business relationship with LexisNexis and are sure that the SLG will continue to grow. We are confident that the SLG will evolve as a key tool of
communication and knowledge for the legal fraternity in Singapore over the next five years.’
Added Ms Au, ‘We believe that this collaboration is timely and strategic. Being in the forefront of the legal information business, LexisNexis is in a good position to provide content that is relevant, up-to-date, and most
importantly, applicable. As strong advocates of knowledge management for higher productivity and efficiency, we believe that the results of this synergy will be positive, measurable and dramatic.’
Ms Elizabeth Wong, Chairman of the Publications Committee, which represented the Law Society in the negotiations, noted that the SLG would not be where it is today without the support of the members of the Bar who have taken
the time and effort to write for the magazine. ‘It is through the voluntary efforts and commitment of these members, Judicial and Legal Service officers and foreign lawyers that the quality of the magazine has steadily improved,
and attracted more readers and contributors’, she said.
With the signing ceremony concluded, and the formalities over, it was time for the fun part – a bottle of champagne was popped, and everyone present drank to the continued success of the SLG and the good business relationship
between the two organisations.
Sharmaine Lau
Law Society of Singapore
The quote from Mahatma Gandhi above encapsulates the outcome of the dialogue held with 144 members on the Council’s proposals to amend the Solicitors’ Accounts Rules (the Rules).
In March of this year, the Law Society of Singapore began the process of seeking written and oral feedback from members on the question of better internal controls to reduce the risk of breaches of the Rules which in turn could
reduce the risk of errant lawyers misappropriating clients’ funds. The feedback sessions culminated with a dialogue the Council held with members on 22 April 2003 at the Academy of Law Chambers chaired by the President, Mrs Arfat
Selvam.
All members, who attended the session, agreed that there was a need to tighten the Rules.
All members present also agreed that two out of the three proposals of the Society should be accepted. The monthly reconciliation of money owed to clients was good accounting practice adopted by most law practices.
The internal control of two signatories for partnerships and law corporations was generally accepted as an effective and essential internal control, save that some felt that the threshold should be set higher than $5,000.
It was the third proposal that caused concern. This proposal is that for those unable to have two signatories they can still operate a client’s account so long as they engage an accountant to act as bookkeeper, as an internal
control measure. The concern was that this proposal would increase costs for sole practices.
The Society had studied the issue of costs. The Society had investigated how much the bookkeeping services of an accountant would cost, conscious that some sole practices had either already engaged accountants to carry out
their monthly bookkeeping function or paid external bookkeepers to do so, for a monthly sum of between $150 to $400. There was no issue of audit fees as there was no recommendation by the Society that a law practice carry out any
annual or monthly audit of its client’s account.
The feedback the Society received from accounting firms was that the cost of bookkeeping services depended on the number of transactions a law practice had in a month and how well their books were kept. The costs could range
from $300 to $500 per month.
The Society studied past cases of defalcations from 1973 to date and saw a common denominator. In the vast majority of cases, the defalcating solicitor was under financial strain due to varied personal reasons, and in the case
of a sole practice, the solicitor wrote up and controlled his own books of accounts. When under financial strain, solicitors were tempted to dip from time to time into their client’s account, probably hoping to make good the
deficit before detection at the annual check of their client’s account by their accountants.
Unfortunately, this proved for many of them to be a slippery slope, and the deficits became bigger and the solicitor then abandoned his practice and fled, or gave himself up to the police or admitted his wrongdoing to the
Society. Only a small minority of cases involved a solicitor who had the fraudulent intention from the start and was determined to abscond with a large sum of money.
In the four cases of partnership fraud, save for one case, there was the absence of the second signatory for the withdrawal of funds from the client’s account. This had allowed a single partner to withdraw sums of money at
intervals from the client’s account without the knowledge of any other partner.
As regards the types of clients’ monies held by solicitors that were the subject of misappropriation, they ranged as follows:
Mr Low Chai Chong, the chair of the Solicitors’ Accounts Rules Committee, explained the proposed amendments at the dialogue. He said it was made on the premise that a ‘second key’ level of protection would prevent improper
withdrawals and alert the law practice or the Society earlier to cases of mismanagement of client’s funds.
The second key protection was a co-solicitor signatory who would be equally responsible to ensure that his co-signatory’s client’s money was withdrawn as authorised by r 7 of the Rules with relevant supporting documents or
vouchers to show clearly the reason for the withdrawal or payment.
In the case of sole solicitors, monthly bookkeeping by an independent third party, ie an accountant, would ensure good bookkeeping practices in accordance with the Rules that were in place as an effective internal control.
At the dialogue session a written counter proposal was submitted, signed by 115 members. The counter proposal essentially recommended that the following five types of client’s money cease to be held by law practices or be held
jointly with a third party. The premise of the recommendation was to drastically reduce the pool of money in the client’s account of any law practice (regardless of size and the internal controls in place) and so remove temptation
for all solicitors.
The five types of client’s funds were:
The Society, shortly after the dialogue on 28 April 2003, requested the members who submitted these counter proposals to finetune their proposals by 12 May 2003 and submit the same to the Law Society. They were also requested
to nominate three representatives amongst them to work with the Society to consider the feasibility of their counter proposals. The Society has also sought written feedback from all members on the feasibility of these counter
proposals as well as any other feedback by 12 May 2003.
Yasho Dhoraisingam
Law Society of Singapore