Practice Intervention: Control and Handover

Read the Appointment Before Acting

Read the appointment instrument before using the principal’s usual access or accepting instructions about the takeover. Record the jurisdiction, appointing authority, named appointee, covered practice and scope of the appointment. Keep its commencement provisions beside evidence of service, including who received each notice and when.

In NSW, external intervention under Chapter 6 of the Legal Profession Uniform Law protects the public and clients. Circumstances can include a sole principal’s death or incapacity, so an appointment does not itself establish a disciplinary finding. An informal adviser’s instructions have a different basis from a statutory appointment.

Use an authority record with these fields:

• Notice or order reference and issuing authority.
• Appointee’s name and independently verified contact details.
• Practice, office, practitioner or subject matter covered.
• Commencement event, service record, duration and conditions.
• Functions transferred or restricted and the relevant provision or order paragraph.
• Person responsible for obtaining clarification about an unresolved power.

Confirm uncertain instructions through the appointee and the appropriate appointing authority or legal advice route. If allegations are also being pursued, keep that response separate from the control and handover required by this appointment.

Distinguish Supervision, Management and Receivership

NSW supervision, management and receivership have different effects on the practice. The Law Society of NSW’s external intervention guidance explains the roles and the effect of serving appointment notices.

For each appointment, match the proposed action to the actual instrument. Record whether legal services can continue, which principals can participate and who may authorise bank transactions. Identify the property within the appointment rather than assuming every business asset or personal account is controlled alike.

These are NSW examples. Another state’s application legislation, appointing body or court order can change the authority and procedure. A court condition or limited appointment also changes what the appointee may do. Resolve that difference before accepting new instructions, continuing representation or dealing with property.

Protect Live Matters and Establish Contact

Identify urgent client obligations as soon as the appointment’s authority is established. Build a live-matter list from the diary, matter system, current correspondence and staff interviews. Include court appearances, filing limits, settlements, unfulfilled undertakings and payments awaiting authorisation.

Give each matter a responsible practitioner and record the next action, its deadline and the evidence confirming it. If the existing practitioner cannot continue, put the representation question before the appointee immediately. Recording a deadline does not secure representation or obtain an extension.

Agree a written contact arrangement for the takeover. It needs to say who can instruct staff, speak to clients, contact the bank and decide whether new work is accepted. Give staff an escalation contact for a disputed or unclear instruction. Apply restrictions to access in accordance with the appointment, while preserving the records needed for the handover.

For example, if settlement is due shortly but the trust signatory changes on service, send the appointee the settlement instructions and payment status together. Confirm who may approve the payment before staff rely on an old banking permission. Tell the client about the responsible contact through the authorised communication process.

Handover Money, Files and Source Evidence

Transfer money information and files through an inventory that records what the authorised appointee actually receives. Keep the original financial sources and an identified handover copy. Do not overwrite an unexplained balance to make the transferred records appear reconciled.

The inventory needs enough detail to identify missing items and restrictions:

Consider this fictional takeover. River Quay Legal’s ledger for matter RQ-417 records a $24,000 receipt and a $6,000 authorised disbursement, leaving $18,000. The last reconciliation lists that client balance. A later bank statement shows a further $2,000 debit with no matching ledger entry in the handover bundle.

Attach the relevant statement pages, receipt entry, ledger export and written instruction supporting the $6,000 payment. Record the extra debit as unresolved and identify the missing instruction or accounting entry. The statement proves the account movement, while the client allocation and authority need their own evidence. Send that difference to the appointee without inventing a balancing entry or describing the debit as established misconduct.

Where supplied statements span many accounts, FinTrace can reduce the time spent converting and reviewing them. The service produces a searchable Excel transaction record and a findings report with PDF filename and page references. That gives the appointee and their accounting advisers the statement evidence beside the transactions under investigation.

Obtain a receipt identifying the inventory version, items delivered, recipient and transfer event. Record any retained originals, permitted copies and access restrictions. Acknowledging receipt confirms custody of the listed records. It does not approve the underlying transactions or resolve a disputed entitlement to money.

Work Within Continuing Directions and Verify the End Position

Keep a directions register throughout the appointment and connect each authorised action to its instruction. Record unresolved client obligations, further information requests and cooperation provided. Preserve a disputed instruction and refer it through the applicable authority or advice process without assuming the former principal’s customary powers resolve it.

The Law Society’s intervention procedures manual sets out appointment conditions, review and termination provisions. Section 358 provides a seven-day appeal or review period following the relevant service event. An appeal or review does not itself stay the appointment. Obtain advice promptly about the applicable jurisdictional process and any direction changing its operation.

Check the instrument and governing law for the event that varies or ends this appointment. A supervisor’s or manager’s termination process differs from a receiver’s. Under General Rule 104, reporting follows the instrument’s requirements, with regulator reports and a termination report required where the instrument specifies none. Keep reporting responsibilities visible in the directions register.

When control changes again, prepare an end-position record. Attach the operative variation or termination authority and identify who now holds each account, file and item of client property. Show reconciled balances alongside expressly unresolved differences, with a person responsible for each outstanding enquiry. Confirm the practitioner responsible for every live matter and obtain the receiving custodian’s acknowledgement before treating the handover as complete.