Some Alternative Business Structures approved

Some personal injury lawyers are concerned that new Alternative Business Structure initiatives approved by the Law Society of Upper Canada are the beginning of a slippery slope toward non-lawyer ownership of law firms.

LSUC benchers approved a motion at their September meeting to allow non-profits and charities to provide legal services through practitioners.

The changes will allow non-profits and charities to employ lawyers to provide legal services directly to clients rather than referring them out.

Some lawyers, however, see the proposal as a politically astute move to bring ABS to Ontario.

“It’s just simply the first step and, two years down the road, we’re going to have full non-lawyer ownership of law firms. That’s where this is headed,” says Brian Cameron, a partner with Oatley Vigmond Personal Injury Lawyers LLP in Barrie, Ont.

The law society’s Alternative Business Structures Working Group has been looking at the issue since 2012. The group shelved a proposal to allow non-lawyer majority ownership of law firms in 2015, but some lawyers are still wary of introducing any form of ABS.

“I’m not a fan of the ABS model at all. I really think it’s a slippery slope,” says Renée Vinett, a partner with Howie Sacks & Henry.

“It just raises alarm bells.”

Bencher Malcolm Mercer, who is chairman of the working group, has said these changes will allow non-profits and charities, such as women’s shelters, to connect people to the services they need rather than requiring them to seek out lawyers, he says.

“What I would say to those who take the position that one shouldn’t do a good thing because it might lead to a bad thing is that they should analyze each proposal on its own merits,” he says.

“It would be a shame if the profession, if it was concerned about non-lawyer ownership, would not permit charities and not-for-profits to serve needs that we all know exist.”

The working group had originally planned to submit proposals to Convocation for a vote in June, but that motion was scuttled the night before the meeting after there were calls that not enough consultation had taken place. A number of organizations, such as the Ontario Trial Lawyers Association and the Federation of Ontario Law Associations, quickly submitted letters asking that the motion be deferred until they had a chance to provide further input over the proposals. As a result, trade unions and member-based organizations, which were originally included in the initiative, were taken out of the motion.

There were also a number of caveats included to alleviate some concerns raised by the OTLA. One such concern was that relationships between charities and law firms could create exclusive brokerage arrangements that could manipulate prospective clients into selecting the firm in the partnership to represent them. Under the new motion, non-profits and charities will not be allowed to charge clients for legal services, but they will not be able to refer clients to lawyers or paralegals in exchange for donations or payments.

Claire Wilkinson, the president of OTLA, says the organization was pleased to have the opportunity to work with the law society on the proposals.

“We certainly want to see greater access to justice for those in need, and this model could help with that laudable goal,” she says. The new motion also excluded organizations that are funded by Legal Aid Ontario, after some benchers raised concerns about legal aid clinics.