SUMMER 2015 1

AdvocateSummer 2015

The quarterly magazine of the Young Lawyers’ Committee Wellington

INSIDE THIS ISSUE:

Your CV is Your Sales Document

Tips and tricks for writing an effective CV

Crowdfunding A world of new opportunities?

All the Queen’s Money An overview of New Zealand’s

public finance regime

PLUS:

Lawyering for Good How lawyers can use their unique skills to increase access to justice

There are numerous roles open to New Zealand lawyers wanting to work overseas so make the move now – gain international experience, increase your earnings and travel the world!

Through our global network of JLegal o�ces, we recruit lawyers with the leading law �rms and corporations in the Australia, UK, US, Asia, Middle East, North & South America and the O�shores (including Cayman Islands, BVI, Channel Islands, Bermuda, Luxembourg and Malta).

For a con�dential discussion about making the leap overseas, contact Damian Hanna today at damian.hanna@jlegal.com.

Your next career leap – made easy by JLegal.

New Zealand

Singapore

Middle East

ChinaLondon

Australia

Hong Kong

new zealandlevel 1, 124 willis street, wellington t | +64 4 499 5949

www.jlegal.com find jlegal onnew zealand melbourne sydney london singapore uae hong kong

JLegal were formally know as Simply Legal.

SUMMER 2015 03

YLC Advocate Summer 2015

Advocate Summer 2015Editors: Jess Davies & Emma BowmanDesign: Rebecca Walthall

Cover photograph by rytc | flickr. Reproduced under a Creative Commons licence.

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04 Editors’ Note

05 Deputy Convenor’s

Note

06 YLC Committee and

Executive 2014

08 Your CV is Your

Sales Document ASTER THACKERY

10 Crowdfunding: a world of new opportunities? EMMA BOWMAN

12 All the Queen’s

Money: an overview of New Zealand’s

public finance regime EMILY BOLTON

14 Lawyering for Good:

How lawyers can use their unique skills

to increase access to justice

ALTHEA CARBON

15 Spotlight on

Rachael Jones

16 Event Report – Wine and Cheese Night

18 Event Report – Young

Professionals Ball

19 Event Report – Art Gallery evening

There are numerous roles open to New Zealand lawyers wanting to work overseas so make the move now – gain international experience, increase your earnings and travel the world!

Through our global network of JLegal o�ces, we recruit lawyers with the leading law �rms and corporations in the Australia, UK, US, Asia, Middle East, North & South America and the O�shores (including Cayman Islands, BVI, Channel Islands, Bermuda, Luxembourg and Malta).

For a con�dential discussion about making the leap overseas, contact Damian Hanna today at damian.hanna@jlegal.com.

Your next career leap – made easy by JLegal.

New Zealand

Singapore

Middle East

ChinaLondon

Australia

Hong Kong

new zealandlevel 1, 124 willis street, wellington t | +64 4 499 5949

www.jlegal.com find jlegal onnew zealand melbourne sydney london singapore uae hong kong

JLegal were formally know as Simply Legal.

04 YLC ADVOCATE

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Editors’ Note

Jess Davies and Emma BowmanC O- E DI TOR S

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So summer has finally arrived, the silly season is in full swing and the rush to get everything

done before the end of the year has begun.

As we attempt to distract ourselves from how behind we are on our Christmas shopping, here at Advocate we’ve being doing some thinking about the year so far. The YLC has hosted some fantastically successful events this year, including the Young Professionals Ball – our biggest event ever! In Advocate we’ve continued to publish articles from young lawyers on topical issues, as well as some pieces with tips that might help young lawyers, like Aster Thackery’s excellent series about working as a lawyer in London.

But we’re always looking to improve, so we’ve decided to ask you – the readers – about the direction you would like Advocate to take in future. Do you think it’s important for Advocate to provide a place where young lawyers can publish on legal issues they care about? Would you prefer to see more practical advice, like tips on advocacy or career options? Keen to see more light material, like what’s happening in the legal community in Wellington and where Supreme Court judges like to go on holiday? We’d love to hear any comments or suggestions you have! If you’ve ever flipped through Advocate and you’ve got a spare five minutes or so – please click through to our survey and share your thoughts with us. www.surveymonkey.com/s/FGHDJW9. There could be a $200 prezzy card in it for you!

After you’ve done that though, don’t forget to come back and check out the fantastic material we have for you this issue. Aster Thackery is back, this time with some useful advice about crafting your CV. She looks at how best to present yourself, why it’s important to tailor your CV to every position you apply for and what sorts of questions you should ask yourself before getting started. Her mantra: your CV is your sales document. Make sure you check it out!

Next, Emma Bowman takes a look at the expansion of crowdfunding in New Zealand. With recent law changes legalising equity crowdfunding and peer-to-peer lending, what opportunities does this create? Head to page 10 to read Emma’s thoughts. Then Emily Bolton shares an enlightening overview of New Zealand’s public finance regime, an often overlooked but vitally important tool for government transparency. Althea Carbon returns with her regular column “Lawyering for Good”, this time looking at how lawyers can use their unique skills to increase access to justice.

Finally, as always, we’ve got reports (and photos!) from YLC gatherings over the past few months. We particularly recommend the photos of the Young Professionals Ball, everybody looks amazing!

For more information check out the YLC website, and make sure to join our Facebook page to keep up to date with the latest YLC activities. > www.facebook.com/younglawyerscommittee

We also thank the YLC’s general sponsors: the Medical Assurance Society and JLegal. Thanks also to Rebecca Walthall, our designer, for her amazing work on this issue! A

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Deputy Convenor’s Note

Amberley JamesS OL IC I TOR AT K E N S I NG TON

S WA N

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We are delighted, and somewhat relieved, to have hosted another hugely successful Young Professionals Ball on 30 August. Our 2014 Ball was our biggest and most popular event yet. Over 350 young professionals descended on

Wellington College for a glamorous night in Paris.

Credit for organising the wonderful night goes to Liz Babonnick, Emma Currie, Rebecca Garden, Nigel Salmons, and Penny Skinner. Long days and countless trips to Pete’s Emporium resulted in a truly spectacular event. If you haven’t already you should check out the photos on our Facebook page. In particular the Amazing Travelling Photo Booth provided some marvellous shots. You can read more about the ball and check out some of the photos on page 18.

The last few months have also seen an array of other successful events. In particular our mooting competition, born just last year, has grown well and truly into a formidable adolescent. The competition continues to receive high praise and the Auckland Young Lawyers’ Committee has just used our moot problem to host their own successful competition. Several Committee members are already beavering away on exciting plans for a 2015 national competition, which will hopefully grow to encompass young lawyers groups from all around the country as the competition continues to flourish.

The mooting competition is one of many examples of the YLC’s more recent focus on providing more advocacy and professional development services to young lawyers in Wellington. However, we remain fundamentally an organisation focused on promoting collegiality and getting young lawyers (and other young professionals) in Wellington together to have a great time. The reason? Because we deserve it. Young lawyers work incredibly hard and deserve opportunities to enjoy themselves and let their hair down. It is, as they say, all about balance.

At a recent admission ceremony Justice Collins referred to the law as a “challenging and rewarding profession”, a sentiment most young lawyers, whatever their work, can relate to. We have embarked on a career, whether for the short or long term, that is destined to result in long stressful days and countless hours of proofreading, document review, or fretting over whether that term was defined just right. However, it can also be incredibly rewarding knowing you are helping someone solve a problem or create something they couldn’t do without you. We can only hope that those rewarding moments are frequent enough to get us through the challenging ones.

And sadly it seems that in the future young lawyers will continue to face challenges. Indeed, it seems beyond a doubt that we will leave behind a profession much different from the one we entered. More than any who have come before us, it is our generation that will have to confront the real issues of the legal profession: Will the current model of providing legal services survive an increasingly demanding and complex world? Is the time of the billable hour up? Is the full service law firm a thing of the past? Should all organisations have their own in-house lawyers? Will the legal love affair with paper ever truly end? And perhaps most significantly, how do we create a more gender balanced and ethnically diverse profession, particularly at the top?

Fortunately, we have the next 50 years to worry about all of that. And in the interests of balance, and knowing that the rewarding will not always match the challenging, we should make sure we take some time to enjoy ourselves along the way. A

06 YLC ADVOCATE

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Committee Members 2014

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YLC Executive

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About the YLC

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CONVENOR Richard Evans

DEPUTY CONVENOR Amberley James

SECRETARY Nikki Farrell

TREASURER Nigel Salmons

SPONSORSHIP OFFICER Althea Carbon

PROFESSIONAL AFFAIRS OFFICER

Natalie Pierce

COMMUNICATIONS OFFICERS

Emma Currie Penelope Skinner

MARKETING OFFICER Jess Davies

PUBLICATIONS OFFICER Emma Bowman

The Wellington Young Lawyers’ Committee (YLC) is a committee of the Wellington branch of the

New Zealand Law Society.

The Wellington Young Lawyers’ Committee (YLC) is a committee of the Wellington branch of the New Zealand Law Society. It works to support young lawyers across the Wellington region by providing networking opportunities, relevant information and training, and by advocating for their interests. The committee currently comprises 26 volunteers from a range of firms and in-house teams in both the public and private sectors. An executive of 10 is responsible for running the YLC on a day-to-day basis. If you’d like to the join the YLC, contact the Secretary, Nikki Farrell > nikki.farrell002@msd.govt.nz

Althea Carbon; Amberley James; Andrew Row; Anna Vincent; Anna Whaley; Charlotte Christmas; Emma Bowman; Emma Currie; Hadleigh Pedler; Helen Arathimos; Jelena Gligorijevic; Jessica Davies; Kate Driver; Kristen Wong; Liz Babonnick;

Maeve Jones; Matt Dodd; Monica Hamlyn-Crawshaw; Natalie Pierce; Nicky Dalgleish; Nicole Evans; Nigel Salmons; Nikki Farrell; Penelope Skinner; Rachael Jones; Rebecca Garden; Richard Evans; Steven Li

AUTUMN 2014 07

NEW ZEALAND LAW SOCIETY NATIONAL SERVICES – PRACTISING WELL INITIATIVE

We live in a world with many competing demands from family, work and community. Practising Well is a Law Society initiative that aims to help us cope with those demands by providing support services and information pertinent to everyday life and practice. Here are a few parts of the Practising Well initiative that might be relevant to you.

For WellbeingThe life of a lawyer can be stressful, not only on the lawyer, but also on family members. To help with the stresses that lawyers and their families face, the Law Society has a Memorandum of Understanding with Lifeline Aotearoa that enables members to access services at a discounted rate. While many Lifeline services are freely accessible to all, Lifeline also has additional services:• Lifeline Counselling has a team of qualified professional

counsellors experienced in working with clients across a broad range of issues.

• Their high quality confidential service can help with day to day issues such as: stress, anxiety, burnout, depression, relationship issues, grief, trauma and addiction.

• All their Counsellors are qualified to Masters level and are members of the NZ Association of Counsellors.

• New Zealand Law Society members and their families are offered a discounted rate: $110 based on a normal 60 minute session.

• Lifeline Counselling can be accessed on face2face@lifeline.org.nz or phone 09 909 8750.

National Friends PanelSolving the problems of others is an integral part of being a lawyer. If you yourself are worried by something related to your work as a lawyer, if you’re finding it hard to balance work demands with your family or friends, or if you have concerns totally unrelated to your work, you could find it helpful to discuss things with someone who understands the pressures of life as a lawyer. More information is available at my.lawsociety.org.nz/practising-well/national-friends-panel.

Information on website Addiction – my.lawsociety.org.nz/practising-well/addiction Includes: • Alcohol self-assessment

test• Drug self-assessment test• Gambling addiction

self-test • Recognising Addiction

• Treatments for Addition • Getting Help • Personal Stories

and Solutions • Further Reading

Depression – my.lawsociety.org.nz/practising-well/depression Includes:• Recognising Depression• Treatments for Depression• Helping someone with

Depression

• Getting help• Personal Stories

and Solutions• Further Reading

Stress – my.lawsociety.org.nz/practising-well/stress Includes:• Recognising Stress• Helping someone

with Stress

• Managing Stress• Personal Stories

and Solutions

Health and Wellbeing – my.lawsociety.org.nz/practising-well/health-and-wellbeing Includes: • Eating Well• Staying Active

• Relaxation

CLANZ (Corporate Lawyers Association NZ)Ethics Handbook: available at www.clanzonline.org/resources. This handbook gives guidance to in-house counsel on ethical decision-making, including additional guidelines for public sector lawyers.

Wise Heads panel: a panel of experienced senior in-house lawyers who can be contacted on a confidential basis as a sounding board to talk through a practice or personal issue. Please contact the CLANZ Executive Officer for a referral or she can give you a list of Wise Heads for you to decide who to contact.

The CLANZ Executive Officer is available to talk to any in-house lawyer at any time. Queries are frequently received about the boundaries of practising in-house, the Rules of Conduct and Client Care as they apply to in-house counsel, benchmarked market remuneration and how the CPD regime impacts on in-house counsel. You can contact Helen Mackay at helen.mackay@lawsociety.org.nz or on 04 463 2907.

Wellington Branch

Solicitors Benevolent FundThe Wellington Branch of the NZLS keeps the Solicitors Benevolent Fund, which any practitioner holding a practising certificate can apply to for financial relief, as can the family of a practitioner who has held a practising certificate. Over the past three years the Fund has paid out funeral expenses, funding to assist practitioners with loss of income for their own serious illness and funding to assist when parents have had to reduce working hours to cope with the serious illness of a child.

Special Interest CommitteesThe Wellington Branch has 16 Special Interest Committees, which provide a forum for in-house lawyers to meet with “in practice” colleagues to share information, expert knowledge and collegiality. They are a particularly good forum for newly-admitted lawyers to learn from experienced practitioners.

Branch assistanceThe Branch manager and staff are there to assist you. Call your Branch and the manager will be happy to assist you. In Wellington, we provide a lot of assistance to members seeking specialist advice, help for wellbeing and moral support during difficult times. Call us – we are there to help!

08 YLC ADVOCATE

Writing your curriculum vitae (CV) can be hard. It’s hard for a number of reasons. Firstly, there’s your experience so far; maybe there are gaps in that experience. Secondly, there’s the job that you want; there are also the jobs that you might want. Thirdly, there’s the question of how you explain all this to a prospective employer in the space of just a few pages.

It is important to remember that your CV is your sales document. We often forget this, so I repeat: Your CV is your sales document. It is not an encyclopaedic chronology of fact.

We often think that our CV should be an unbiased record of everything we’ve done in our professional lives so far. When we submit our CV, we also think that it will be assessed against the other CVs in an unbiased way and that those with the best qualifications and experience will be invited for an interview.

The truth is that a CV is no different from any other sort of communication: it should convey your message in a way that is appealing to the reader. That is, it should make clear what you are offering the reader ( your potential employer) and why you are offering it.

Ideally, you should tailor your CV to every position that you are applying for. You may think that it’s not worth the effort. However, imagine that someone is trying to sell you a vacuum cleaner:

• You see an advertisement on a billboard – this is like having a LinkedIn profile; your credentials are out there, but they will only be noticed if someone (a recruiter) is specifically looking for them.

• You receive a flyer in your letterbox – this is the equivalent of sending your CV to a number of companies and hoping that one of them notices you above the rest.

• A salesperson contacts you directly and tells you why their vacuum cleaner is better than the rest and will solve all your problems.

The last approach is how you should think about your CV. A tailored CV that speaks directly to the reader will be more likely to catch their attention than something generic. So how do you tailor your CV? Corinne Mills of Personal Career Management provides some useful questions you should ask yourself:

What job do you want? Early in your career, you may not know what job you want because you may not know what’s out there. FIND OUT. Search job sites and vacancy listings, read the job descriptions. You should at least be able to identify a type of work or a sector that you want to work in.

Where do you want to get to? Do you want to be rich, do you want to help people, do you want to live overseas? What kind of job will get you there? Think about what skills you need for that job. Again, early on in your career, you might not know. However, if you think that you might like to litigate or that you’re interested in commercial transactions then start to take steps that will get you there. Having said that, you can always change your mind (I certainly have).

What makes you right for the job? This is where you forget about every school award you’ve won and focus on the skills that the person hiring you is looking for. To do this, you need to know what skills they are

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Your CV is your sales document

Aster ThackeryL E G A L A DV I S OR AT

S OU T H WA R K C OU NC I L, LON D ON – S E P T E M B E R 2014

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What does your CV say about you? In this article we discuss the purpose

of your CV and provide tips to help you get the job you want.

SUMMER 2015 09

looking for (hint: they are usually listed in the job description!). You then need to think of examples from your previous jobs/experience that show you have those skills.

When you write your CV, Corrine Mills also says it is important to ditch modesty. Remember that your CV will be in a pile of many others. Only a handful of CVs stand out: they are the ones that make the reader sit up and think – wow, this guy sounds amazing, let’s meet him! As I said above, your CV is not an historical record. It should focus on your good points and leave out the irrelevant points. Highlight the skills that you have, which you know your potential employer is looking for, and give examples.

When I moved to London at the start of the year, I quickly realised that the job market is bigger and much more aggressive than back home. When it came to job-hunting, I had to be assertive. I have since been on the other side of the recruiting process, reading the CVs of applicants for our job vacancies. Some legal vacancies in London attract more than 300 applications.

Here are some additional tips from my own experience:

• Update your LinkedIn profile – Outside New Zealand, if you’re not on LinkedIn it may be assumed that you are out of date (old) or you have something to hide (or you’re so famous you don’t need to be on LinkedIn). Make sure that your LinkedIn profile matches your CV.

• Ask your friends what they did – Often we get encouragement from our friends. Friends can make good recommendations that will save you a lot of time. Make sure that they have similar goals to you before you act on their advice.

• Find good recruitment agencies – Ask around to find the best agencies for the field that you want to work in. It’s no good speaking to a public sector recruiter if you want to work in private practice and vice-versa. Similarly, some agencies specialise in fixed-terms contracts whereas you may be looking for a permanent role. As above, ask around.

• Don’t give up! It’s a tough market, especially as there is an excess of non-qualified or newly-qualified lawyers out there. Stay positive and keep applying. A

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10 YLC ADVOCATE

> What is crowdfunding?

In essence, crowdfunding involves raising money from a large number of people who each contribute a small amount, typically facilitated through an intermediary platform such as Kickstarter or PledgeMe.

Crowdfunding originally started as a way of founding social or not-for-profit projects. However, businesses soon saw opportunities in reward-based crowdfunding. In 2013 crowdfunding worldwide raised over US$5 billion worldwide, and this is expected to rise markedly in the coming years.

The way crowdfunding typically works is that the project creator or business entrepreneur sets up a campaign on one of the intermediary platforms. They set a target funding goal and a fixed timeframe for achieving that goal. They then share the campaign with their “crowd” (their backers), seeking financial contributions towards that goal and offering in return anything from free product to token gifts, to feel-good buzz.

If a project reaches its target goal within the fixed timeframe, then the campaign is a success and the intermediary platforms process the pledges, taking a small percentage as their fee. If the target goal is not reached, then no money changes hands.

Crowdfunding has been used in a wide variety of ways: students wishing to go on exchange who promise to send a postcard to everyone who gives them money, struggling artists wanting to put on an exhibition where all the contributors get a free ticket, and even a Kiwi man who wanted to raise some money for a KFC feed – the reward being the sheer humour of the campaign.

And businesses have also utilised reward-based crowdfunding with some success. But there are some notable limitations to the reward-based model of crowdfunding in a business context.

> Problems with reward-based crowdfunding

Around 50 per cent of all crowdfunding campaigns never reach their target goals. Primarily this is because there is difficulty both in reaching people, and in inducing them to contribute money. In crowdfunding campaigns 80 per cent of those who contribute are friends or family, but it is hard to extend a campaign beyond that core group; only a very small portion of campaigns ever achieve the viral status of the Pebble smartwatch. Further, unless the people involved have a personal connection to the campaigner, it is understandably difficult to induce people to part with their money unless the reward is something worthwhile.

For those campaigns that are successful, the follow through on providing the rewards can be a lot more work than it is worth. Taika Waititi, who used Kickstarter to fund the US distribution of his film Boy, struggled with the work involved. The types of rewards he needed to promise in order to garner contributions included hand-drawn sketches and replica helmets from the movie – eating into the funds raised and proving a huge amount of work for an individual to take on.

There are also numerous situations where the contributors are dissatisfied with the product. Many Pebble backers were dissatisfied with the length of time it took to receive their free smartwatch, and there was some backlash against the company.

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Crowdfunding: a world of new opportunities?

Emma BowmanS OL IC I TOR AT

M I N T E R E L L I S ON R U DD WAT T S

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In 2012 a US company called Pebble Technology made headlines for

successfully raising capital through the internet crowdfunding website Kickstarter.

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Having struggled to obtain funding for its smartwatch product from traditional funding sources, Pebble turned to the “crowd” and a new model of capital raising – it asked people to make financial contributions to its business, and offered each donor who gave over US$150 a smartwatch in return.

Pebble’s target goal was to raise $100,000. The internet campaign went viral, and Pebble ended its campaign early having raised US$10.2 million from approximately 70,000 backers.

Numerous other companies have launched similar campaigns, with business ideas ranging from the innovative to the interesting, the weird to the wonderful. And a few of them have achieved comparable success (a couple of recent campaigns even surpassing the amount raised by Pebble).

However, the majority of crowdfunding campaigns are not so successful – often limited by the rewards and inducements that can be offered, and the difficulty in convincing the “crowd” to back the idea.

Until recently, only reward-based crowdfunding was allowed in New Zealand. The regulation of financial securities law meant that offering shares in a company in returns for contributions was prohibited, unless the company issued a full prospectus and investment statement in compliance with the Securities Act 1978.

However, reform of securities law under the Financial Markets Conduct Act 2013 (FMCA) means that companies can now use crowdfunding to offer equity and debt securities to contributors. This article will examine how the new law will work, and what this means both for companies seeking to raise money, and individuals looking to invest.

SUMMER 2015 11

One further issue is illustrated by Oculus’s crowdfunding experience. In 2012 Oculus raised around US$2.4 million to fund the development of its virtual gaming headset Oculus Rift, and contributors received rewards such as t-shirts and posters in return. Very successful as a result, Oculus was bought by Facebook for US$2 billion earlier this year. This created a backlash against the company on two fronts. First, those who directly and financially contributed to the success of Oculus felt understandably ripped-off that all received in return was a t-shirt – even though there should never have been any expectation that they would receive more. And secondly, many of the people who contributed were motivated by the idea of supporting an underdog technology company. When Oculus sold to Facebook, many condemned the sale as a sell-out that went against what they contributed money to.

What these problems highlight is the fact that where businesses use reward-based crowdfunding, there is often a fundamental disconnect between the motives of the company and those of contributors.

Equity crowdfunding therefore offers an opportunity to create better incentives to encourage people to make contributions, and it also aligns the interests of contributors to those of the company.

> What is changing?

The FMCA is a “once in a lifetime” overhaul of New Zealand’s securities legislation, part of which sets out a framework for equity crowdfunding and also peer to peer lending/debt crowdfunding.

It is important to note that reward-based crowdfunding will not be affected by the FMCA and can continue in the same manner as described above. However, the new law means that companies can now legally use crowdfunding to offer shares or to offer debt securities, and will be exempted from the disclosure requirements that are normally required when making offers of financial products. This means that companies using the crowdfunding exemption will not be required to issue a product disclosure statement (which replaces the prospectus and investment statement, and is otherwise a requirement under Part 3 of the FMCA).

There is one key limitation that companies must keep in mind when using crowdfunding. This is that there is a $2 million limit on the money that a company can raise in any 12 month period. This limit applies across the exemptions for equity crowdfunding, peer-to-peer lending, and also another exemption known as the small offer exemption – the aggregate limit that can be raised between these three is $2 million.

> Licensed intermediaries

The quid pro quo of lighter disclosure requirements for companies is more onerous compliance obligations for the intermediary websites, which must be licensed by the Financial Markets Authority (FMA) in order to provide the service. Ultimately, the licensed intermediaries are responsible for ensuring that investors are treated in a fair and transparent manner, and must provide certain prescribed disclosures and warnings to investors.

Licensed intermediaries also must comply with a host of other regulations – they must register under the Financial Service Providers (Registration and Disputes Resolutions) Act 2008, and must comply with legislation

such as the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 and the Financial Advisors Act 2008. Additionally, licensed intermediaries are FMC reporting entities under the FMCA, meaning that they will have to file audited financial statements.

So far three equity crowdfunding platforms have received licenses from the FMA – The Snowball Effect, PledgeMe, and Crowdcube New Zealand – and equity crowdfunding campaigns have begun in New Zealand. HarMoney, a licensed peer to peer lending is also up and running, with other platforms such as the Lending Crowd set to launch in the future.

> Equity crowdfunding campaign

The first cab off the rank, Renaissance Brewery raised $700,000 using The Snowball Effect to expand its craft beer business, offering shares in its company and annual cases of beer in return for investments. Following this, the makers of the film The Patriarch (which is based on a novel by Witi Ihimaera and will be directed by Lee Tamahori) raised the last portion of its funding using equity crowdfunding.

There are now several active campaigns over the three licensed intermediaries, where investors can browse the options available, read the information provided, and make decisions about investing in New Zealand companies. However, as the warning statements on these websites clearly state, there are a number of risks involved and investors need to bear in mind that they are not receiving the full level of disclosure that is ordinarily required.

> Peer to peer lending

Peer to peer lending (or debt crowdfunding) is a way of offering debt securities to the public and has also been made legal by the FMCA. It is structured in a very similar way to equity crowdfunding, however rather than purchasing shares, investors lend money to companies for a set interest rate. Again, this must be facilitated via a licensed intermediary such as HarMoney, an online platform licensed by the FMA to provide this service.

HarMoney works by assessing each borrower and placing them into a credit grade, with an associated interest rate. Investors then select loans to invest in, managing their risk by spreading their loan across numerous investments. With better interest rates for both borrowers and lenders and more flexibility, some commentators have suggested that peer to peer lending could prove to be a rival for traditional bank loans – however, as with equity crowdfunding, it is also a higher risk investment.

> Where to from here?

It remains to be seen how significant an impact equity crowdfunding and peer to peer lending will have in the New Zealand market, and whether this alternative form of capital raising will prove itself in the long-term against more traditional funding sources such as venture capital and angel investment. There are risks involved for both the businesses raising capital, and for the investors who receive more limited information than generally required under the FMCA. Early successes are crucial to developing the crowdfunding market, and so far it is off to a reasonable good start. It will be interesting to see what happens next! A

12 YLC ADVOCATE

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All the Queen’s Money: An Overview

of New Zealand’s Public Finance Regime

Emily BoltonS OL IC I TOR AT T H E T R E A S U RY

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Few New Zealanders are likely to profess an interest in the Public Finance Act 1989 but it is

one of our most important tools for government transparency.

> The origins of parliamentary oversight of public spending

New Zealand’s colonial government imported the Westminster model of public finance where Parliament had to approve the Crown’s expenditure. The history of the English Parliament therefore closely tracks the rise of our modern public finance regime.

Early forms of English government involved a king who could tax subjects and spend money as he wished with no oversight from taxpayers.1 However, if taxpayers became unhappy with the taxes they were paying and what the king was spending his revenue on, the king was likely to face difficulties in raising further taxes. One such outcome was revolts in 1215 in England, which resulted in the Magna Carta. The 1215 Magna Carta created a council of 25 elected barons who voted by majority and could veto some of the king’s decisions.2

As Parliament’s powers grew in the coming centuries, Parliament eventually took on the task of approving the government’s expenditure on a yearly basis. The Glorious Revolution of 1688 saw the end of absolute monarchy in England. The resulting Bill of Rights 1689 prohibited the Crown from levying and using money without parliamentary approval.3 However it wasn’t until 1782 that Parliament fully established its right to scrutinise Crown expenditure on a yearly basis as it continues to do today.4 During its very first session in 1854, the New Zealand Parliament took over the role of the British Parliament in approving expenditure by the New Zealand government.5 Today the prohibition on the Crown levying taxes, borrowing money or spending money without Parliament’s approval survives in the Constitution Act 1986.6

> The major principles of the Public Finance Act 1989

Leaping forward to the second half of the 20th century, the 1980s saw a raft of economic and state sector reforms in New Zealand, including the introduction of the Public Finance Act 1989 (PFA). Tax reforms in the mid-1980s had dramatically increased tax revenue but surpluses eluded the government.7 The government decided a new financial management focus would improve departments’ financial accountability and encourage forward thinking by departments and ministers.8

Appropriations (Part 1)

As I have foreshadowed above, the most fundamental principle of the PFA is the requirement for Parliament to approve expenditure before it is incurred.9 Parliament approves government expenditure by approving “appropriations”. The Crown can’t incur expenditure unless there is an appropriation. Appropriations must contain a wide range of information, including: the Minister; the administering department; what type of expenditure may be incurred (such as capital

1 Roger D Congleton Perfecting Parliament: Constitutional Reform, Liberalism and the Rise of Western Democracy (Cambridge University Press, Cambridge, 2011) at 115.

2 Magna Carta 1215, s 61.3 Bill of Rights 1689.4 Malcolm McKinnon Treasury: The New Zealand Treasury, 1840–2000 (Auckland University

Press, Auckland 2003) at 28.5 At 32.6 Constitution Act 1986, s 22.7 McKinnon, above n 4, at 381.8 At 381.9 Public Finance Act 1989, s 4.

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or operating); the amount authorised by the appropriation; the scope of the appropriation; and the period of the appropriation.10

What is commonly referred to as “the Budget”, released each year in mid-May, is really a collection of all of the appropriations for the next financial year. Any member of the public can look at the Budget and see what the government is planning to spend its money on.

Appropriations are output focussed. This means that the scope of the appropriation needs to describe what the government is going to get for the amount that is being appropriated. This arose out of a desire to make departments and ministers more forward looking. In addition the change reduced the minute oversight of departments by the Treasury and the State Services Commission, who now focus on the outcome that will be achieved by the expenditure.

Fiscal Responsibility (Part 2)

One of the most important changes to New Zealand’s financial reporting has been the use of Generally Accepted Accounting Practices (GAAP). Anyone familiar with GAAP can read and understand the government’s financial statements in the same way as the accounts of a company. All documents prepared in accordance with the PFA are now required to follow GAAP.11

Part of the use of GAAP is accrual accounting – a revolutionary way of preparing government accounts in the 1980s. For the non-accountants, accrual accounting requires the government to include in its financial statements and in appropriations expenditure that has been or is to be incurred but not yet paid. For example, if you sign up to a contract but haven’t paid for the services yet, if you were using accrual accounting you would include that promise to pay in your accounts because you already know you need to pay that amount. New Zealand was one of the first countries in the world to adopt full accrual accounting in 1991. Today, about 59 per cent of the 32 OECD countries use accrual accounting.12

Part 2 also contains a number of documents that the Minister of Finance and/or the Treasury must provide to the House of Representatives. These documents give the government and Parliament a much longer term overview of the economy and the government’s financial standing, compared to the Budget which is an annual document.

10 Section 14.11 Section 26H.12 PWC Global Survey on Accounting and Reporting by Central Governments (April 2013) at 12.

Reporting (Parts 3, 4 and 5)

Not surprisingly, a comprehensive public finance regime requires the government to prepare financial statements at the end of the financial year.13 Part 3 appoints the Auditor-General as the Auditor of the government’s financial statements.14 In Part 4, Chief Executives of departments are given responsibility for the financial management of their departments.15

Borrowing, securities, derivative transactions, investment, banking and guarantees (Part 6)

So far, I have covered only the ability of the government to spend money. But the PFA also covers government borrowing. As a large organisation with a shiny credit rating, the Crown is well placed to participate in the financial markets. But there is, of course, a strong imperative for government borrowing to be tightly controlled.

Part 6 also includes the prohibition on the Crown giving guarantees and indemnities except under a small group of exceptions.16 Guarantees and indemnities are problematic because they commit the government to expenditure that cannot be quantified in advance.

> That’s all well and nice but why should I care?

You should care about the PFA because ultimately the underlying principle of the PFA is accountability. New Zealand consistently ranks among the most transparent countries in the world. It might seem a bit odd but an important part of our world leading role is the Public Finance Act 1989. All of the principles I have described above mean that Parliament, ministers, departments and ultimately the public know how much money the government has and how much it is spending. Most countries simply don’t know how much money they have and how much they spend. With the PFA New Zealand was among the first in the world to mandate rigorous rules for government expenditure. Today many more countries have followed our lead and foreign government officials continue to visit the Treasury to learn more about our public finance regime. A

13 Section 27.14 Section 29B.15 Sections 34–36.16 Sections 65ZC-ZE.

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14 YLC ADVOCATE

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Lawyering for Good: How lawyers can use their unique skills to increase access to justice

Althea CarbonS OL IC I TOR

AT C H A P M A N T R I P P

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Lawyers have an important and unique role in ensuring access to justice. According to Cameron

Madgwick, Chairman of the Community Law Centres of Aotearoa (“CLLA”), lawyers have an

obligation to provide legal assistance, regardless of the client’s means to pay because lawyers are

the only ones who can.

Volunteering at Community Law Wellington and Hutt Valley (“CLW&HV”) is a great way for young Wellington lawyers to use their unique skills for good without giving up their day jobs. As Madgwick’s career demonstrates, it is possible to work both in the corporate and non-profit world, and indeed, it is valuable to do so.

> Community Law Centres

The CLW&HV is one of 24 community law centres in New Zealand which serve as the gateway to justice for many Kiwis. Community law centres are integral to enabling disempowered people to navigate the legal system. They are important in a country where there are only 12,000 people qualified to provide legal help for a population of more than 4 million.1 The popularity of the community law centres proves that there are still unmet legal needs in the community – each year, the 24 community law centres collectively help around 250,000 people and the communitylaw.org.nz website gets one million hits. A report by the New Zealand Institute of Economic Research shows that the direct pro-bono work undertaken through the community law centres amounts to almost $2 million a year.2 This is $2 million of legal work that people would not otherwise have been able to afford.

> Working in both worlds

For lawyers working full-time, Madgwick suggests three ways to give back on a part-time basis:

• Volunteer at a community law centre. There are two common concerns that most lawyers have: not having enough time and not practicing relevant areas of law. However, it’s not as time-consuming as people think. Volunteers are typically rostered on for one evening a month. It’s also not as daunting. New volunteers go through training and are supported by seniors until they are experienced enough to advise on their own. CLW&HV also has a supervisory structure which is required by the Lawyers and Conveyancers Act 2006.

• Provide support through governance work. Young lawyers can start gaining experience in governance by working in sub-committees for non-for profits. Madgwick notes that lawyers add a lot of value to governance boards in non-profit organisations by bringing a logical, methodological way of thinking to the governance challenges of those organisations.

• Participate in their firm’s pro-bono initiatives or encourage their firm to create/increase their pro-bono initiatives. The CLW&HV is strongly supported by the legal profession so lawyers should check whether their firm is involved. Law firms are also strong supporters of other Community Law centres throughout New Zealand. There are also many charities that would hugely benefit from a couple of hours of pro-bono work. Law firms are becoming increasingly aware of the importance of pro-bono work to potential recruits and young lawyers so they may be receptive to young lawyers’ ideas on how to improve their pro-bono practice.

1 New Zealand Law Society, LawTalk, 28 March 2013.2 NZ Institute of Economic Research Report to Community Law Centres Aotearoa,

Benefits of Community Law Report, July 2012.

SUMMER 2015 15

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Spotlight on Rachael Jones

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What’s your role on the Committee?General committee member, organising fun and challenging events.

How long have you been on the YLC and why did you join?I joined in August 2014, after finding some spare time on my hands after profs.

What do you do outside of the Committee?Judges’ clerk at the High Court in Wellington.

Do you have a favourite Wellington café? I have two: Milk Crate for the best coffee and Café Polo for the best food.

What would you do if you won $5,000 in lotto?This would only just cover my personal debt accrued in 2014 alone, so naturally I would ignore that and buy some shoes.

Are there any books you have been reading recently that you would recommend to others?A couple of oldies but goodies – Emergency Sex and Other Desperate Measures by Heidi Postlethwait et all and Shantaram by Gregory Roberts.

If you had to eat one meal for the rest of your life, what would it be?Vietnamese bun cha (Google it, and then buy some from Fisherman’s Plate on Bond St). A

Madgwick is a role model for those aspiring to work in both the corporate and non-profit world. His career path is high-powered and varied, including working at Russell McVeagh, the New Zealand Rugby Union, Contact Energy, Flick Electric Co and New Zealand Oil & Gas. Currently, he is the CEO of the Petroleum Exploration & Production Association. He has always found time for the community, and his non-profit career spans even longer than his corporate work. He started at university doing advocacy work for secondary school students who were about to get suspended. In addition to being Chairman of the CLCA, he is contributing his governance skills as a director of the Laura Ferguson Trust (www.lft.org.nz).

Doing pro-bono work is a win-win for the clients, the community, and the volunteers. Especially for young lawyers, volunteering is a great opportunity to gain practical experience in providing legal assistance. They get the chance to handle their own cases, have more responsibility and interact directly with clients. By contributing their professional expertise to non-profits, young lawyers gain skills that benefit them in their day jobs such as empathy, problem-solving and listening skills.

> Be involved

Members of the legal profession have an obligation to help people access justice, regardless of their means to pay. In New Zealand, there are only a few thousand lawyers who are equipped to help. However, lawyers do not have to give up their day jobs in order to make an impact. The corporate and the non-profit worlds are not mutually exclusive, and working in both can give lawyers cross-transferable skills. Organisations such as the CLW&HV, participating in other pro-bono initiatives and serving on non-profits are only some of the numerous ways that lawyers can use their unique skills for good. A

For more information on volunteering at the CLW&HV, visit www.wclc.org.nz, complete this form and contact Zoe on zoe@wclc.org.nz. Thank you to Cameron Madgwick, for giving an interview on behalf of CLCA and CLW&HV.

16 YLC ADVOCATE

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Event Report: Wine & Cheese Night

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On Tuesday 22nd July, the Young Lawyers Committee (YLC) held the Russell McVeagh

Wine and Cheese Night. Over 100 young lawyers attended this annual event and sampled

Wine Loft’s finest wine and cheese platters. The night was accompanied by great music from jazz trio, Jetset. The YLC would like to thank Russell McVeagh for their generous

sponsorship of this event.

AUTUMN 2014 17

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18 YLC ADVOCATE

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Event Report: Young Professionals Ball

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On Saturday 30 August, the Young Lawyers Committee hosted the annual Young Professionals Ball in the Brierley Theatre at Wellington College. Against a romantic backdrop of the Paris skyline, over 350 bright and energetic young professionals enjoyed a magnifique evening of dancing and conversing over champagne and baguette...

The grand pianist set the scene for this sold out event, welcoming the guests to a elegantly French venue, complete with a red, white and blue Candy bar, Kir Royale feature drink and wine barrels, direct from Provence. Jonny and the Dreamboats got the party started and before long the dance floor was humming.

The YLC would like to send thanks to Wellington College, Jonny and the Dreamboats, and Elaine and the team at Fine Cuisine, Jess Kelly and The Amazing Travelling Photobooth, and Tuatara and Te Kairanga Estate, for each of their roles in our wonderful night in Paris! A

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Event Report: Art Gallery Evening

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On Thursday 18 September young lawyers in Wellington had the opportunity to enjoy an evening at the Paige Blackie Art Gallery. Treated to a viewing of the latest Dick Frizzell collection, the crowd mixed and mingled and enjoyed the Gallery’s relaxed atmosphere. James Blackie, owner and art dealer, gave an engaging presentation about beginning an art collection, with particular focus on how a collection can come together even on a limited salary. He spoke about various ways of making original pieces affordable and accessible.

The Young Lawyers’ Committee would like to thank Bell Gully for sponsoring the event, James Blackie and the Page Blackie Gallery for being such excellent hosts and Elaine and team at Fine Cuisine for the catering. A

www.younglawyers.co.nz