A report Monday revealed that the LSO upped its CEO's pay by $300,000 without benchers' approval
As the Law Society of Ontario’s governing board continues to grapple with the news that the organization gave its chief executive officer a $300,000 raise through a “potentially ultra vires employment contract,” some former benchers from the FullStop slate say recent LSO policy changes were already trending towards the erosion of benchers’ voices.
“During my time as a bencher, I observed that too much was being done without the consultation of the Convocation of benchers as a whole,” says John Fagan, who served as an LSO bencher from 2019 to 2023.
Fagan says CEO Diana Miles’ pay raise, which was implemented by the LSO’s former treasurer without benchers’ input, is another example of this trend. He adds, “I was grimly not surprised” by the disclosure.
Jared Brown, a bencher during the same term as Fagan, notes that his tenure at the LSO was marked by tension between two political slates. One of them, the Good Governance Coalition, swept the law society’s 2023 bencher election.
The Good Governance group “felt their role was to fully support the CEO and the staff of the organization,” says Brown, who was a member of the competing FullStop slate. He adds that the benchers’ “oversight role has really taken a beating since” the election.
On Monday, the Toronto Star reported that the LSO had retained outside counsel to independently review an employment contract Miles signed in June. That contract raised Miles’ base salary from just under $600,000 to $936,000, removed a 20 percent performance bonus incentive, and included an additional lump sum payment of $226,000 for a pension adjustment.
The LSO’s governing board, known as Convocation, did not learn about the contract until the end of November. On Monday, the LSO stated that the independent review results will be delivered to the law society’s treasurer and Convocation by the end of February.
In two emails obtained by Law Times, benchers Murray Klippenstein and Ryan Alford registered shock and sadness over the revelation. Circulated to benchers in December, both emails alleged that former Treasurer Jacqueline Horvat’s decision to implement the contract without first consulting Convocation breached LSO rules.
Klippenstein alleged that Horvat and Miles were aware of this breach, noting that Horvat had participated in an annual bonus review for the CEO for six consecutive years. That process entailed the LSO’s compensation committee recommending Convocation, which discussed the matter in camera.
Klippenstein’s email further alleged that this review and approval process was written into the CEO’s contract.
Alford’s email accused Miles of misappropriating funds, reasoning that “significant changes to her compensation clearly require board authorization.” Alford cited two LSO bylaws, one of which reads, “Unless expressly authorized to perform a duty or exercise a power, the performance of a duty or the exercise of a power by a standing committee is subject to the approval of Convocation.”
He called Miles’ contract “potentially ultra vires.”
Brown says he was initially shocked by the news of Miles’ contract but also believes “it was only a matter of time before something like this happened, given some of the problems within the law society’s governance structure and some of the people that sit on that board.”
He cites several instances that he believes demonstrate an erosion of Convocation’s oversight role. One example is a policy that Convocation passed last year, which gives the CEO discretion on whether to fulfill information requests by benchers.
The policy followed a lawsuit that Klippenstein filed against the LSO after it denied his information request for internal equity, diversity, and inclusion (EDI) programs. An advocate of the policy, which requires the treasurer to provide written reasons for denials in certain circumstances, previously told Law Times that it aimed to discourage abusive or politically motivated information requests.
But Brown sees the policy differently. “This board so faithfully trusted the CEO that they surrendered their right to information and documents about the law society to the CEO,” he says.
Brown also highlights the LSO’s proposed reforms to its governance structure, which have garnered criticism for slashing the proportion of elected lawyer benchers at Convocation and upping the number of appointees on the board. Brown notes that the proposed reforms would give the CEO “a role in appointing members of the board that will then oversee the CEO.”
Fagan says the LSO has a recent history of “not consulting the benchers on things they absolutely should be consulted on.” One example arose in 2022 when Fagan introduced a motion at Convocation to protest the LSO’s hiring a professional name reader to call the names of new licensees.
Fagan says the LSO’s decision was “absolutely a decision of policy” and should have been presented to benchers before it went into effect.
The LSO did not immediately respond to specific questions about these recent policy changes or Miles’ employment contract but told Law Times that they “fully respect” the independent review process concerning Miles’ employment contract and will provide updates as appropriate.
