The Chartered Accountants ANZ Professional Standards team loves talking about ethical issues with members but often the things we discuss have legal impacts.

Under APES 110 Code of Ethics for Professional Accountants (including Independence standards) (the code), Chartered Accountants are required act with professional competence and due care.

This specifically includes making clients and employers aware of the limits to providing professional services or activities.

That's why, when legal issues are involved, our team may recommend that it's time to get a lawyer involved.

However, anecdotally, we've found that some of our members can be reluctant to talk to a professional.

Obviously, there's the monetary factor to consider. But just looking at the cost is only one side of the equation.

In the same way our professional expertise helps our clients manage their financial affairs and avoid costly mistakes, lawyers can help keep us out of trouble and manage legal risks for us and our clients – with potentially better outcomes for all.

As such, it makes sense to consider the expense of legal advice, when it's required, as part of the cost of providing your service.

Establishing a working relationship

Lawyers, like accountants, have specialties, so you need to find one with the skills and expertise to help with your specific situation.

Specialist lawyers, such as those who look after corporations and businesses, will be upfront about their expertise. There are also state-based accreditation schemes in Australia that can help you find someone who does the kind of work you need.

Once you have a working relationship, you may find that regular contact means simple questions can be dealt with quickly and cost-effectively without the need for you to provide extensive background every time.

"Under CA ANZ regulation CR 3.11, members must not perform work that is required by law to be carried out by a legal practitioner."

When to seek legal advice

So, when is a good time to consult a lawyer? There are many situations in which a qualified legal opinion may help. In our team, we've seen several examples of where accountants have failed to seek legal advice and have regretted it.

Here are some examples of when legal advice is important:

Cases before courts or tribunals

You'll need to engage a barrister (generally through a solicitor) who will ensure that the matters before the court are appropriately addressed in accordance with court procedures and the rules of evidence.

Preparation of legal documents

While you can easily find document templates online, it's incumbent on you to ensure that they are current and include the most recent, relevant updates. Likewise, you should verify that the document provider is reputable and backed by appropriate legal advice.

If you need to update or redraft these documents, you should engage a lawyer to ensure that you are properly covered.

Importantly, under CA ANZ regulation CR 3.11, members must not perform work that is required by law to be carried out by a legal practitioner.

DIY may save you a few dollars today but could leave you in a world of hurt in the future.

A legal impediment in an ethical clearance letter

If you are alerted to a legal impediment in an ethical clearance letter for a new client, consulting a lawyer can help you understand the risks of proceeding with the engagement.

A client makes a claim

If a client notifies you that they are dissatisfied with your past work and intend to make a claim, you should notify your professional indemnity insurer. However, you shouldn't rely solely on the advice from the insurer's lawyer. Engaging your own independent lawyer can give you important context and additional strategies for mitigating your exposure to risk.

Setting up or selling a practice

These are major changes to your business, which may be, or become your greatest asset. A lawyer can help you to develop a partnership agreement or an agreement for the sale of the business. Lawyers become involved when things go wrong, so they are well placed to know the questions to ask upfront and draft an appropriate agreement to protect your interests.