Alternative Business Structures - the future of legal services

ALTERNATIVE BUSINESS STRUCTURES

Overview

On October 25, 2018, the Law Society launched a call for comment on a draft regulatory framework that would permit lawyers and paralegals to provide legal services through registered, civil society organizations (CSOs), such as charities and not-for-profit organizations — to the clients of those organizations.


Presented by the Law Society’s Alternative Business Structures Working Group, the framework is designed as a way of facilitating access to justice for Ontarians – particularly individuals who may have legal issues, but who have traditionally faced barriers to receiving legal advice from a lawyer or paralegal.


The framework was developed following Convocation’s approval in principle of this policy in September 2017. 


Comments may be submitted via email or mail (see information below) until January 18, 2019.


Based on the input received, the working group will refine the framework and plans to present a final framework for Convocation’s consideration in early 2019.


If the draft regulatory framework is approved, then the Law Society will update the Lawyer and Paralegal Annual Reports as necessary for the 2019 annual reporting year, and develop practice supports for licensees working in CSOs.


The draft regulatory framework features the following:

  • guidelines for potential civil society registrants, as well as a registration process and annual filing requirement
  • rule changes that highlight the competency requirements for delivering services through CSOs, and prohibiting licensees from charging clients a fee or accepting a referral fee
  • by-law changes outlining the CSO registration and de-registration process, as well as the professional liability insurance requirements and the prohibition of fees being charged for the services as well as referral fees
  • insurance requirements for licensees providing services to third-party clients of CSOs.

See the Alternative Business Structures Working Group’s October report for more information.


Written input may be sent via email to:

Mr. Juda Strawczynski,  Strategic Policy Counsel, at JStrawcz@lso.ca


Written submissions may also be sent via mail to:

Alternative Business Structures Working Group
Law Society of Ontario
130 Queen Street West
Toronto, ON M5H 2N6


Background

The Law Society’s ABS Working Group was formed in September 2012 to explore various possible options available for the delivery of legal services.


 FOLA responded to that first discussion paper - the full response can be downloaded here - and we have expressed the following:   


1)   The vision for ABS in Ontario must be further clarified if true consultation is to occur.  Further, a clearer answer on the rationale for alternative business structures needs to be offered.  Will the vision lead to a successful outcome for both the profession and for legal consumers? 

The mandate of the Law Society is to regulate the legal profession in the public interest, but we do not yet fully understand, or frankly accept, the connection between the public interest and ABS.  Care must be taken in this examination that the protection of the public and the impact on the profession is realistic and not only theoretical.

2) In the Discussion Paper, technology and innovation emerge as themes and this is a welcome discussion. In our view, however, the Law Society should review and consider the use of technology in law to provide clearer guidance to the profession on the use of technology in practices, in particular to support solo and small firms as the predominant service providers to Ontarians.  If more technology and innovation in the practice of law is a goal of the Law Society, guidance on the use of same should be provided first and outside the scope of a broader discussion on ABS.  We believe that such a discussion could prove more fruitful, and carry much less risk, than a discussion about the current regulatory regime.

3) We recommend that the Law Society move the discussion away from "ABS" exclusively and into a more fruitful and less politically charged discussion about potential improvements and modernization of regulation.  In one respect, "ABS" is a broad and far-ranging theoretical discussion about regulatory modernization, but at the same time focusing on ABS is also, in our view, limiting discussion about positive changes that can – and should - be made to the overall regulatory regime.


In September 2014, it released a discussion paper and sought input from the professions and other stakeholders.


In September 2015, the ABS Working Group delivered an interim report to Convocation outlining its initial assessment and the directions it will consider further. At that time the Working Group decided not to continue to consider structures involving majority ownership, or control, of traditional law firms by non-licensees. The Working Group focused its study on change with the potential to foster innovation or enhance access to justice.


In September 2017, Convocation approved in principle, a policy recommended by the Working Group to permit lawyers and paralegals to provide legal services through civil society organizations (CSOs), such as charities and not-for-profit organizations.  


In April, 2018, the LSO's Working Group released a Report at Convocation, which you can view here.