ADVERTISING, MARKETING & FEE ARRANGEMENTS

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The Law Society’s Advertising and Fee Arrangements Issues Working Group is considering changes relating to advertising, referral fees, and contingency and other fee practices.

The LOS issued a call for comment and that deadline was Oct 31, 2018.  

At issue are practices involving the payment of fees and offering of benefits by title insurers to real estate lawyers or their staff and whether additional regulatory measures involving these practices are required.

LSO Working Group Consultation Document.  

See also the working group’s report to June 2018 Convocation.

BACKGROUND

In 2015, the Professional Regulation Committee of the Law Society, conducted a Call for Input regarding the Rules of Professional Conduct, including marketing and advertising rules.

Based on its review of the thoughtful submissions received from individuals and legal organization on these issues (including the Federation of Ontario Law Associations) the Committee has determined that it would be beneficial to obtain more detailed information about advertising and fee arrangements issues in Ontario from a variety of stakeholders, primarily in the personal injury sector. This information would provide additional context to facilitate the Committee’s consideration of referral fee arrangements, contingency fees, and marketing and advertising issues.

To provide guidance on next steps, the Treasurer requested that the Committee’s Chair, Malcolm Mercer, establish a Working Group to address these issues. The members of the Working Group are Malcom Mercer (Chair), Robert Burd, Paul Cooper, Carol Hartman, Jacqueline Horvat, Jan Richardson and Andrew Spurgeon. 

The genesis of this work was a result of the impression among many that there was an explosion of lawyer marketing and advertising in Ontario.  It has been pointed out that lawyer advertising is increasingly common and much of it is in poor taste, pushing the bounds of decorum and professionalism. 

As a matter of principle, the Working Group is working on the belief that:

• Advertising should inform consumer choice
• Advertising shouldn’t be deceptive
• Advertising should reflect pricing accurately

As such, the Working Group is interested in which services are being advertised and whether the advertising is a means to get clients that are then referred.  Is the advertising soliciting work that the lawyer or paralegal has no intent to perform, but for which the advertiser just hopes to collect the referral fee?  Is this fair? Right? Justifiable?  How do you regulate it? 

Another big topic is the issue of advertising around the issue of expertise. This is particularly true around the advertising of awards that a lawyer or law firm might receive. In many cases, the award is effectively purchased and then used as a sign of credibility in a, more or less, deliberate attempt to deceive the consumer.  

And finally, on the question of advertising, the Working Group is looking at questions of taste and professionalism all the while recognizing that it is extremely difficult to measure or codify taste and that attempts to do so will inevitably lead to disagreements. 

On the question of referral fees, the Working Group is concerned with the size of referral fees and whether they should be regulated, with the lack of transparency and consumer awareness that often exists with referral fees and, finally, whether the referral fees are increasing the problem of access of justice and taking more money away from litigants than would otherwise be found. 

The Working Group is also interested in the contingent fee system, with a particular view to finding ways to create greater transparency.

These are some of the “big questions” being examined by the Working Group and gives a sense of the scope of what they are looking at, but should not be construed as giving an indication of direction or conclusions.

The first report (for information only) to Convocation of this Working Group was made at the June 2016 Convocation and can be found below. 

This report concluded that the Working Group will continue consultation until September 30, 2016 with a view to producing final recommendations by early 2017.  The Federation was pleased to note that in this report the Working Group recognized that the issue of lawyer advertising and fee arrangement transparency was not just an issue impacting the personal injury bar, but was a concern found throughout the profession and was a particular concern of the real estate bar.

The second round of consultation sought to dig deeper on many of the relevant issues and FOLA was pleased to respond in detail.  Our response can be found below.