King & Wood Mallesons is under investigation by Australian authorities for allegedly overworking lawyers and staff in its Melbourne office.

The firm confirmed that it received a notice for improvement from WorkSafe Victoria, the state occupational health and safety regulator, regarding employee work conditions that demanded overwork and grueling conditions. This is the first time a law firm in Australia is being investigated for overworking lawyers.

The investigation is tied to King & Wood Mallesons’ involvement in a recent public inquiry into misconduct by dozens of the nation’s financial services providers. A Royal Commission, led by former High Court Justice Kenneth Hayne QC, was formed in December 2017 to probe unethical practices, including the selling of highly risky financial products to vulnerable populations, such as the disabled.

As part of the Royal Commission probe, King & Wood Mallesons has been representing wealth managers AMP Ltd. and IOOF Holdings Ltd., and insurers Suncorp Group Ltd. and Youi Pty Ltd., according to a report by the Australian Financial Review, to respond to government inquiries. Sydney-based AMP, whose chairwoman and chief executive stepped down as a result of that investigation, was hit the worst by the inquiry, according to Reuters, losing $4 billion in market value.

Other large Australian firms—Clayton Utz, Gilbert + Tobin, Herbert Smith Freehills, and Ashurst—are also advising on the probe. Those firms have noted the work is arduous and said they are getting support from their offices around the globe to ensure their lawyers involved in the probe are not overworked.

The high volume of work has led junior lawyers at King & Wood Mallesons’ Melbourne office to be subject to grueling work conditions, with some employees sleeping in the office so they could deal with tight deadlines and the huge volume of work, according to claims cited by the Australian Financial Review. The firm has until mid-November to respond to the WorkSafe investigations.

King & Wood Mallesons Australia chief executive partner Berkeley Cox said the firm has been responding to the workload by hiring additional staff, putting lawyers on shifts and enlisting help from paralegals and clerks.

After receiving the WorkSafe notice, Cox said the firm is “undertaking a comprehensive review of what else we can do to better identify and prevent high-pressure situations for our people … [and] ensure our people are supported and are given regular and proper opportunities to rest and recover.”

This kind of investigation by a state regulator into a law firm for overwork is a first for the Australian legal industry, and possibly a first in the Asia Pacific region, noted Michael Tooma, an occupational health and safety expert and Australia managing partner of Clyde & Co.

“This is a wake-up call for the legal industry that we need to tackle this head-on,” Tooma said. “It’s a significant development. There will be potentially a precedent created for others.”

King & Wood Mallesons, together with 10 other major firms in Australia, previously signed a pledge in 2014 to a set of guidelines by the Tristan Jepson Memorial Foundation, now called Minds Count Foundation, and promised to create a psychologically healthy workplace. The foundation, which promotes psychological health and safety in law firms and the legal community, was originally named for an Australian lawyer who suffered from depression and committed suicide. The guidelines call for firms to make sure the amount of work that employees are expected to handle is reasonable for their positions.

Cox said the firm remains committed to the Minds Count Foundation guidelines. “We will be taking a fresh look at how the guidelines are applied in the context of unusual high-pressure situations, such as the recent Financial Services Royal Commission,” he said.

 

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