Free legal advice not always the best advice

Perhaps you have a lawyer for a friend.  Or, maybe your gym buddy’s friend’s cousin’s boyfriend’s aunt is a lawyer.  It may be tempting to ask for free legal advice. Lawyers are often approached for opinions and advice by people out of hours. This is a risky practice and here’s our top four reasons why;

Engagement and rules of conduct and client care

All lawyers practicing in New Zealand are bound by the Rules of Conduct and Client Care (“the Rules”). The Rules set out a framework of requirements which lawyers must follow when giving legal advice. A lawyer who breaches these Rules may be disciplined by the New Zealand Law Society, and even lose their licence to practice.

Before giving advice, the Rules require a lawyer to provide you with a letter of engagement. A letter of engagement sets out the firm’s terms of service, such as who will be doing the work and at what hourly rate, and the complaints process available to you as a client.  It also states whether the lawyer or their Firm holds professional indemnity insurance. More on that later.

Who’s doing your work?

The basic chain of command in a law firm is that lawyers and legal executives report to Partners (or Directors) of the firm. The Partners of a firm technically supervise everyone who’s not a Partner. When you ask your lawyer friend to go rogue on the weekend and provide free advice, you’re asking him or her to break the rules and potentially breach their conditions of employment. That’s risky for your friend, but it’s also risky for you. This brings us to my next point: professional indemnity insurance.

Professional indemnity cover

Professional indemnity (“PI”) insurance is held by most law firms. PI insurance is meant to protect lawyers and their clients. The idea is that if something goes wrong, and the lawyer is at fault, there may be insurance available to meet a claim. PI insurance only covers lawyers providing professional services. Translation: it only covers work by lawyers who have been properly engaged by a client. PI insurance does not cover free after-hours advice provided as a favour. It also doesn’t cover advice given in exchange for feeding their cat over a long weekend.

What you can ask your friend

Chances are your lawyer friend cares about you and wants to help you.  Here’s a question you can always ask: “I have an issue that requires some advice. Could you recommend a lawyer that can help me?” They’ll be happy to point you in the right direction.