New Ways to Practice Law are Coming

by Les Morley|October 31, 2014| Lawyers, Practice of Law,

HERE IN ONTARIO the practice of law is restricted within relatively narrow and traditional parametres.  To provide legal services one must be a lawyer or paralegal licensed by the Law Society of Upper Canada, our regulatory body.  Those who are licensed may only provide legal services, or services that support or supplement legal services, in their practice.

The business structures currently available to licensed legal professionals here include sole proprietorship, partnership, limited liability partnership, professional corporations or multidisciplinary practices.  The last of these must be controlled by licensed legal professional and may only offer services that support or supplement legal services.  Fee sharing between licensed legal practitioners and those who are not licensed is only allowed in multi-disciplinary practices and inter-jurisdictional firms.

A change may be coming, however.  It is driven in large part by the changing needs and expectations of the persons who hire us, who are increasingly demanding better, smarter, faster and cheaper service, and clearly expressing their interest in being more involved with and connected to their lawyer than previously.  Perversely, at the same time, as is evident in courtrooms throughout the province, more and more Ontarians are finding it impossible to access legal services, generally because they cannot afford them.  Our clients want more from us, but they cannot afford the services which we are giving them now, at least in the manner in which we are currently delivering those services.

With increasing complaints about what is perceived to be the high cost of litigation and about the number of self-represented litigants, institutional stakeholders in the courts and in the legal services sector are considering a range of options to provide better access to justice, including the development of alternative business structures.  Our Law Society is no exception.  It set up a working group to explore ABS in the fall of 2012.  British Columbia published its report on the subject three years ago, and Nova Scotia, Manitoba, Alberta and Saskatchewan are also exploring these new service-delivery concepts.

On the table in the consideration of ABS options are new services, new service delivery mechanisms, alternative fee arrangements, the participation of non-lawyers in the ownership and management of law firms, and new legal disciplines, amongst other ideas.  Given the potential for a radical transformation in the delivery of legal services if these concepts and implemented, their implications for legal regulation and education will need to be addressed.  In addition, all of us who practice law will need to come to grips with practicing law in a very different way.

Alternative business structures are not merely theoretical constructs or flights of fancy ; increasingly, they are a reality.

Since 2000 New South Wales, Australia has permitted regular incorporation of law practices without restricting who may own shares of the legal corporation or what type of business may be carried on.  The state’s Legal Profession Act provides that legal service professionals may register as a company with the Australian Securities and Investments Commission, the body that ensures compliance with the country’s corporation statute. There are now law firms in Australia listed on the country’s stock exchange.

In the United Kingdom the Legal Services Act 2007 has expanded the objectives of legal services regulation, which were formerly restricted to serving the public interest and improving access to justice.  Now they include the protection and promotion of consumer interests and competition.  As a consequence, new forms of legal business are taking shape.  For instance, in Britain there is now a law firm with a background in fertility law that offers not only legal services, but related services such as donor conception and adoption.

In the United States the District of Columbia permits limited non-lawyer ownership and management of law firms.  In some places, the provision of services by non-lawyers has expanded.  Washington State, for instance, has authorized some paralegals to assist civil litigants with tasks formerly done by lawyers and their staff members.  Also, new ways of delivering legal services have been developed by companies live LegalZoomRocket Lawyer and Axiom.

In a presentation I hosted recently, former and current Law Society officials spoke about the future for ABS in Ontario.  We were advised that the Law Society has not decided whether or not alternative business structures such as those described above will be permitted in Ontario, but that it is still seeking input respecting their implications.  We were told that these new business structures may be seen as an opportunity for us to provide new services and broaden our client base, and it was posited that if we are proactive we will not only be able to survive but to thrive in an ABS environment.  For that to happen, we were advised, we will have to be more flexible and embrace the opportunities that come with ABS.  One message came through clearly: ignoring these trends will be done at our peril.

You can learn more about alternative business structures from the Law Society of Upper Canada’s discussion paper Alternative Business Structures and the Legal Profession in Ontario and the Canadian Bar Association’s report on the subject: Futures: Transforming the Delivery of Legal Services in Canada.


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