SMSF advisers and trustees should use legal firms to produce documents for them as a way of adding built-in protection from any subpoenas for those documents in a dispute, with a legal firm claiming the higher cost is a value-add for the clients of advisers.
DBA Lawyers special counsel Bryce Figot said his firm was receiving an increasing number of subpoenas to hand over documents in legal disputes regarding SMSF-related matters, but was not required to do so compared with non-legal firms.
“What does a business do if they receive a subpoena? Generally speaking, if ordered to produce documents, they have to be handed over and there is no choice because it is under penalty and they will be in trouble if you don’t respond,” Figot said.
“As a law firm, what do we typically answer when we receive subpoenas? We can politely tell them to ‘stick it up your jumper’.
“As lawyers who have drafted these documents typically, our ethical obligations require us to respond with something along the lines of: ‘Each of the documents in the file is immune from production on the ground that legal professional privilege attaches to it.’”
He said the response was typical for law firms and would remain that way unless a client asked a firm to waive privilege, but the same response was not available to other legal document providers.
“When other firms, non-law firms, are subpoenaed, they have to hand over any documents,” he noted.
He said he was openly pushing the benefits of using a legal firm because “you can never really say you don’t care about the confidentiality of your documents and there is always value in being able to say no to someone who wants your legal documents.
“We never know what the future holds and it is possible to find cheaper documents online, but they won’t be from a law firm even if master documents were created by a law firm,” he said.
“Amongst other things, such as the quality of the documents, remember they [non-law firms] can be subpoenaed and forced to hand the documents over, but a lawyer won’t and there is value there. What would your client prefer? Obviously to have the option to not hand over their legal documents.”