Government regulators in Australia have been cracking down on firms whose lawyers are doing what corporate lawyers around the world consider normal – working long hours.

In recent months, two of the nation's top firms – King & Wood Mallesons (KWM) and Gilbert + Tobin – have been called out by state occupational health and safety regulators for allegedly overworking lawyers and staffers. At KWM, officials received reports saying that lawyers were working around the clock to meet punishing deadlines. At Gilbert + Tobin, complaints indicated lawyers were at risk because of intense fatigue from overwork and related drug use.

In much of the world, of course, lawyers at high-powered firms consider working long hours and pulling all-nighters part of the job. But at a time when the subject of lawyer stress, exhaustion and even suicide are making headlines, the crackdown in Australia, and the response both from domestic and global firms there, could be a lesson for law firms around the world.

"This is a wake-up call for the legal industry that we need to tackle this head-on," said Michael Tooma, an occupational health and safety expert and Australia managing partner of Clyde & Co. "It's a significant development. There will potentially be a precedent created for others."

Overwork and mental health have been recognised as problems in the legal profession for some time. In 2014, about two dozen global and large Australian law firms, including KWM, became signatories to a set of workplace practice guidelines designed to improve mental wellbeing for the legal profession. Other firms that signed on to the guidelines include Herbert Smith Freehills (HSF), Allens and Clayton Utz. Gilbert + Tobin was not a signatory.

The guidelines were created by the Tristan Jepson Memorial Foundation, now called Minds Count Foundation, a Sydney-based charity promoting psychologically healthy workplaces in the legal industry. "It is recognised that all legal workplaces are stressful and it has been shown that legal professionals are disproportionately at risk of suffering from psychological distress and illness," Minds Count explains in an introduction to its guidelines. "Workplace factors have been proven to contribute to this risk."

The guidelines include a category about workload management. "The amount of work employees are expected to do is reasonable for their positions," Minds Count advises in its guidelines, which also include other suggestions.

But what happened at KWM ignored the guidelines' principles.

The firm was advising clients in Australia involved in a critical public inquiry, called a Royal Commission, that focused on misconduct in the nation's financial sector. One of its clients, wealth manager AMP, was hit hardest by the inquiry, according to Reuters, with its chief executive stepping down and the company losing billions in market value. While working to meet the deadlines for the investigation, junior lawyers at the firm's Melbourne office were subject to gruelling work conditions, according to claims cited by the Australian Financial Review, with some employees sleeping in the office.

A state occupational health and safety regulator investigated KWM's Melbourne office – the first time a law firm in Australia, and probably in the entire Asia-Pacific region, had been investigated for overworking lawyers.

If a law firm in Melbourne – or anywhere else in the state of Victoria – is found to be in breach of the Occupational Health and Safety Act, Australian government officials can seek a fine of up to about $200,000 (£116,000) for individuals, including partners, or issue enforceable undertakings.

Gilbert + Tobin was also put on notice by a workplace health and safety regulator after it received complaints about the Sydney office, saying lawyers and staff were using drugs and the firm was overworking them. The complaint said Gilbert + Tobin failed to give employees sufficient rest breaks and had no policy for managing worker fatigue, according to The Australian.

Following the investigations, KWM's Australia chief executive, Berkeley 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," Cox said.

But the reality is that nothing can be done if firms choose not to comply with the guidelines, lawyers say. David Field, Australia chief legal counsel for Canon, who also serves as the foundation's spokesperson, said the organisation is staffed by volunteers like him and it is not realistic to expect the charity to police compliance.

"The foundation's key role here is to raise awareness of and advocate for greater focus on mental wellbeing in legal workplaces," Field said. "The guidelines provide a valuable framework to help legal workplaces understand the key factors impacting workplace mental wellbeing."

For example, there will always be large mandates with pressing deadlines, said Clydes' Tooma. But firms are able to manage the workload, especially if they are willing to share work with competitors, he said.

Tooma has experience doing just that. He shared work with three other firms while handling a big litigation case. "It worked exceptionally well," he said of the sharing arrangement. "But the fact that firms have to share legal fees will make this arrangement difficult to achieve."

Law firms, like most businesses, are largely driven by profit, and it's difficult for them to consider sharing fees that they could call their own. "We have to stop thinking in terms of 'we must resource this from within one firm'," Tooma said.

That change won't come easily. So far, most firms continue to tackle these issues alone.

And firms concede that if they want to do all the work, they have to be vigilant about monitoring workloads. HSF, which is also involved in the Royal Commission work, has ramped up recruitment in preparation for the surge in workload.

"We are constantly recruiting to meet our work demands and this was scaled up to meet the requirements of the Royal Commission and other matters," said Andrew Pike, the firm's regional managing partner for Australia, adding that the firm has recently expanded its search to include candidates from New Zealand and the UK.

KWM has also been hiring additional staff, putting lawyers on shifts and enlisting help from paralegals and clerks to help with Royal Commission workload, Cox said.

Global firms can also get help from alternative legal service providers, which incorporate technology to tackle high-volume, document-intensive legal work. HSF launched its own such business in 2011 and Pike said its global alternative legal services team has the capability to work in different timezones, which eases the pressure on staff in its Australian offices.

In recent years, the firm expanded the global alternative legal services team to nine cities around the world: London and Belfast in the UK; Brisbane, Melbourne, Perth and Sydney in Australia; Beijing and Shanghai in China; and Johannesburg in South Africa.

"We recognise that during workload peaks, our teams are under increased pressure, and we understand that it is important for us to do our best to respond and alleviate that pressure," he said.

But even with a legal tech business that can help manage workloads, it's hard for law firms to avoid having overworked, stressed lawyers.

"Managing for peaks, and even occasional troughs in workload volumes, is an ongoing challenge," Pike said.