Two into one - lawyers await verdict

Anna Fitzgibbon, current president of the Auckland District Law Society, outside the ADLS headquarters Chancery Chambers. Photo / Natalie Slade

We expect lawyers to represent their clients with measured logic, even if they sometimes get carried away with their own eloquence and wit. But it is their own representation which is exercising many of our finest legal minds right now, and solid facts are hard to sift from the emotion and hyperbole.

Nearly half New Zealand's lawyers - those north of the Bombay Hills - face the choice of continued representation by an Auckland-based body or, as opponents fear, getting into bed with the devil: the Wellington-based New Zealand Law Society.

The amalgamation proposal, unveiled just before Christmas by the Auckland District Law Society's ruling council, comes two and a half years after the ADLS led the national body halfway up the aisle before getting cold feet. The renewed bid to wind up the 132-year-old Auckland society has pitted lawyer against lawyer in a debate clouded by suspicion and red herrings.

A dissident group, Save ADLS, is opposing a postal ballot on whether to proceed with amalgamation, which closes on Monday. More than 2000 northern lawyers can vote.

The power struggle is about more than parochialism. Since a 2008 law change, the NZLS has had a dual role as regulator of the profession and provider of services.

Amalgamation opponents maintain a strong independent voice is needed to stand up to politicians, and say the NZLS is compromised by its regulatory role, more so because it is Wellington-based.

The NZLS claims a united front is needed to head off a possible Government challenge to self-regulation.

But the prize exhibit has been the ADLS's biggest asset, Chancery Chambers, a landmark 1924 heritage building valued at $9 million in downtown Chancery St. Merger opponents believe the NZLS would come under pressure to sell the building to boost resources and keep fees down.

They claim there is too much "wriggle room" in a draft trust deed intended to keep the asset under northern control. The NZLS admits upkeep of the building is a concern.

The dissidents have rounded on the summer holiday release of the proposal, changes to a memorandum of understanding which they say was drafted in secrecy and haste, and an "undemocratic" transition process which delays the election of a new branch council for 18 months.

"Until Auckland practitioners get to elect those who represent us in Wellington, we should not be entertaining hurried, badly drafted proposals from the small minority who chose to disenfranchise us," says former ADLS council member Jennie Vickers.

Distrust between the two bodies is long-standing.

"Auckland is suspicious as hell of Wellington and everybody south of the Bombay Hills is suspicious as hell of Auckland and that's where the problem began," says former ADLS president Keith Berman.

The arm-wrestle is being fought in the columns of the society's newsletter LawNews, by email, on the SaveADLSinc website and at two highly charged meetings.

The ADLS serves mainly small practices and barristers; large firms focused on commercial law favour the centralised lobbying clout and fee structure of the NZLS.

DLA Phillips Fox partner John Hannan opened hostilities in LawNews in November, writing that the decision should not be driven by a desire to retain a "petty local autonomy."

"It is in my view highly undesirable if not downright foolish and unseemly that the representation and public voice of the legal profession in the largest commercial centre in New Zealand is divided in this way.

"If there is a fear that assets will be taken, yet services will be degraded, I am sure NZLS will be prepared to give appropriate assurances."

But learned friends were not placated. Former ADLS executive director Margaret Malcolm says the process has been a shambles, including a "clumsily drafted" memorandum of understanding to which "any respectable commercial lawyer would be ashamed to put their name".

She says the wrangle is "all about control" and the national body's focus on regulation means lawyers could lose strong independent representation.

Whangarei lawyer David Roughan cites the NZLS's "undemocratic" appointment of an Auckland branch council in 2008 and its failure to hold promised elections last year.

"It's a little bit amazing for a national organisation to say to 43 per cent of its members 'we know better than you who should represent you' and then not give you an opportunity to vote for your own representatives until 18 months after you have handed over your assets," says Roughan, an ADLS council member.

Even in Wellington, there is support for an independent ADLS.

Philip McCabe, a member of the NZLS Wellington branch, wrote in LawNews: "Since the other district law societies were folded into NZLS, the latter has continued being essentially irrelevant ... Where it has tried to compete with ADLS Inc, it has done so incompetently ..."

The merger was mooted in response to the Lawyers and Conveyancers Act which took effect in 2008, ending the days where district law societies presided over the profession, providing both services and disciplinary processes.

The law change followed a succession of cases in which lawyers ripped off clients and district societies were seen as being interested in preserving professional reputations than righting wrongs.

The NZLS was made responsible for regulating the profession and for representing lawyers - who pay an annual fee (about $1300 for a solicitor) for practising certificates.

Despite promoting the "one society" model, Auckland reformed as an incorporated society after impasses over the future roles for its staff and resources. Its membership remains healthy at around 3200, including many outside the region.

As if to confuse matters, the national body opened an Auckland branch around the corner in Shortland St and appointed a council of seven to run the show.

With its strong membership base, ADLS services including legal forms, seminars, social functions and advocacy have long been the envy of legal practitioners outside the region. Those fighting the "takeover" fear services and advocacy will suffer.

"Auckland has led the way with its commercial dynamism and versatility and this should be retained to deliver the best services for lawyers nationally without fiscal bureaucratic restraint that comes with central governance," says ADLS council member Frank Godinet.

But the ADLS's presence limits the national body's ability to draw income from 4300 northern lawyers and, it is argued, compromises its statutory duty to provide services nationally.

NZLS is not yet charging a membership fee, but it intends to do so.

ADLS president Anna Fitzgibbon was re-elected for a third term in December on a pro-amalgamation platform.

In LawNews last week she wrote: "... it is very clear that a unified voice is vital if lawyers are to hold the privilege of self-regulation. ... It would be foolish to think that we have put political threats to the legal profession behind us with the passage of the [Lawyers and Conveyancers Act]."

Fitzgibbon dismisses claims she lacked a mandate for merger discussions or that the process was secretive, saying members were kept informed.

"There's always a small group who are suspicious of anything around the NZLS. Times have changed; there are new people involved."

Fitzgibbon says the law change took away the society's core business, and it faces competition from not only the NZLS but commercial providers.

She says NZLS rules will ensure fair representation for northern lawyers.

"I'm a diehard Aucklander and I don't want to see assets being stripped off. But we have to be realistic about the future."

NZLS president Jonathan Temm, QC, says the ADLS's transition to an incorporated society in 2008 was always intended as a "holding pattern" until issues were resolved.

Temm says the NZLS is statutorily obliged to deliver services in the northern region, and the ADLS's continued existence could mean "two organisations working in the same market".

"Four thousand lawyers in Auckland form a big part of our market." He says far from being lost, ADLS's "unique member services" will be introduced in the rest of the country.

Temm dismisses suggestions that the NZLS lacks independence from Wellington politicians and bureaucrats. "It's a bit like the Auckland versus Canterbury rugby debate ... It's almost petty and a sign of insecurity that people want to divide it on Auckland versus Wellington lines."

Temm says the NZLS has until the end of the year to satisfy the Minister of Justice that lawyers can run their own affairs, after a damning report by Dame Margaret Bazley accused some lawyers of rorting the legal aid system.

"The alternative is to be governed by a super-regulator, like the Serious Fraud Office, at huge cost."

North Shore barrister Henry Laubscher noted in LawNews that should the Government end the self-governing regime the NZLS would lose its only income source.

If ADLS members vote to support amalgamation, it will trigger a further vote in a month to wind up the society.

Save ADLS campaigners say amalgamation discussions should wait until the NZLS's Auckland branch is elected by Auckland and Northland members.

In the meantime, they want a consultant's report on the ADLS's options for long-term viability.