Law Firm Ownership: the Great Canadian Debate of 2015

Topics: Canada, Law Firms, Leadership, Thomson Reuters

In 2015, all the noise in Canada is about alternative business structures (ABS). Last year, the Canadian Bar Association (CBA) released its Futures report, which boldly proposed: “Lawyers should be allowed to practise in business structures that permit fee-sharing, multidisciplinary practice, and ownership, management, and investment by persons other than lawyers or other regulated legal professionals.” In other words, not a traditional law firm. The CBA report also suggests law societies start regulating entities that provide legal services to ensure ethical and professional standards are upheld.

The Law Society of Upper Canada (LSUC) released its discussion paper on ABS last September; meetings and townhalls are going on across the province as lawyers debate the issue. The Ontario Trial Lawyers Association (OTLA), which represents large numbers of personal injury lawyers, has come out strongly against opening up to non-lawyer owners. “There is, as yet, no identified need for law firms to offer non‐legal services that are abundantly and readily available within the litigation support industry,” states the OTLA in its submission to the LSUC. “OTLA believes that the profession’s core values, and the public interest, can only be protected by ensuring that lawyers maintain control over the delivery of legal services. We do support the regulation of law firms, rather than just individuals, in order to ensure that the actions of employees, for which the firm may be vicariously liable, can be regulated.”

The OTLA goes on to say there’s not been enough evidence of ABS really working or creating more access to justice, so now’s not the time for it in Ontario. But supporters of a new legal regime counter that too many of the arguments against ABS come from entrenched, older lawyers making emotional arguments with little evidence to back those up. An association of law student societies came out in favor of ABS: “[W]e conclude that ABS provides an opportunity for an old profession to renew its service coverage and efficiency, and bolster its statutory obligation to serve the public interest. …ABS provides a compelling opportunity for access to justice and a strong business case for legal enterprise.”

As the law students’ response to the LSUC notes, only 12% of Canadians sought assistance for legal problems, according to a 2007 Department of Justice study. That’s a lot of people who are not getting help and there are many reasons for that: cost, accessibility, lack of knowledge or information, and many more. Every aspect of society is changing, the way people get information is changing, the way people work is changing, so the law and delivery of legal services must change.

Regulators in every province are looking at the issue because they realize the status quo is no longer sustainable. In Ontario, for example, paralegals are licensed and can practice in some areas of law. In most provinces, they still need to be supervised by lawyers, but should that change? Technology is allowing the delivery of all kinds of services and users young and old are changing. Do lawyers have to own and run a company that creates a legal advice app? While access to justice is a buzzword that may be clouding the issue, giving people different ways to use and access legal services and providing funding and ownership options for innovators to create and provide needed services is paramount.

Much like in the retail world where there are Wal-Marts and Costcos, multinational as well as local chains, online stores, and independent boutiques; there’s space and need in the legal profession to provide a variety of services from a variety of service providers and in a variety of formats. Not all of them need to be 100% lawyer-run and lawyer-owned.

(A version of this blog post originally appeared as an editorial in the February issue of Canadian Lawyer magazine, a Thomson Reuters Canada publication.)