The Ethical Requirements to Be Cost-Effective and Efficient

Rule 3.01 (1) of the Law Society of Upper Canada’s Rules of Professional Conduct is always overshadowed by its sister rules. Yet, it is perhaps one of the most important rules of our profession:

3.01(1) A lawyer shall make legal services available to the public in an efficient and convenient way.

This rule suggests that if a lawyer is not providing legal services in an efficient manner, she is breaching the rule; and, if a lawyer is not providing legal services in a convenient manner, she is also breaching the rule. Interestingly enough, the commentary in rule 3.01 makes no mention of efficiency and convenience; it deals only with legal aid and declining representation. Rule 8.02(1) of the Paralegal Rules of Conduct is virtually identical to that of Rule 3.01(1) and the guidelines around this rule also ignore efficiency and convenience.

Somewhat similar is Rule 2.01(1)(e) which requires a lawyer to perform client service “in a cost-effective manner.” The commentary for this Rule also lacks interpretation of this phrase. There is no similar provision in the Paralegal Rules of Conduct – for no apparent reason.

If we were to fill the gaping hole in these commentaries we would have to determine from what point of view are legal services to seen as efficient, convenient and cost-effective?

From the lawyer’s/paralegal’s point of view?

From the public’s point of view?

Clearly, it’s the latter.

Both lawyers and paralegals have an obligation to make their services efficient and convenient – with lawyers having the extra obligation of being cost-effective – from the point of view of our clients. Few, if any, lawyers read the rules in this way.

If a professional’s knowledge management system is such that it is not easily accessed or used, this is inefficient and far from cost-effective – and a breach of the rules.

If professionals fail to take advantage of technology for easier communication, preparation and delivery of services, this is also inefficient and inconvenient – and a breach of the rules.

Perhaps a refusal to provide unbundled legal services is a breach of the rules as it is a failure to provide convenient and cost-effective legal services.

But let me be more provocative. Most lawyers bill by the hour. In times when work is scarce, senior lawyers have been known to undertake work that should have been delegated to more junior personnel billing at a lower hourly rate – a clear violation of Rule 2.01. However, compliance with Rule 2.01 means more than merely delegating work to lower-priced personnel. Compliance with Rule 2.01 means devising a system of charging clients that rewards a lawyer’s efficient and cost-effective behaviour. Billing by the hour and setting monthly billing targets rewards inefficiency and creates a conflict between the professional’s need “to make target” and the client’s desire to have work done cost-effectively – no matter who is working on the file. So, in my view the system of billing by the hour is a major breach of Rule 2.01.

It should come as no surprise that efficiency, convenience and cost-effectiveness are at the heart of all the innovations that we are beginning to see sprout up across the legal landscape, including the move to the Cloud and the creation of virtual law firms. These legal innovators are taking their obligations under the rules very seriously.

Finally, there are many excellent business reasons for lawyers and paralegals to embrace change and re-invent how they serve clients – reasons that professionals are free to ignore. But what cannot be ignored is the ongoing obligation to constantly assess the way we manage our practices to provide clients with “convenient, efficient and cost-effective service” that is enshrined in the Rules of Professional Conduct.

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Comments

  1. Excellent points.

    This brings back memories of a dialog from some 20 years ago. I worked for a mandatory bar (a.k.a. regulator) and the question came up about the ethics of the billable hour. A forward thinking lawyer suggested that billing by the hour should be unethical since it puts lawyers in direct financial conflict with their clients. This ‘conflict’ of course runs counter to one of the ethical pillars of the profession.

    The response from bar leadership was the classic “who passed gas” look, then transitioning quickly to another topic.

  2. And your friendly neighbourhood librarian just became more cost effective. T’is a noble service we perform.

  3. Steven B. Levy, author of Legal Project Management

    This is a conversation that has been going on quietly in occasional corners, in both Canada and the US. (Rule 1.1, Competence…. “use of methods and procedures meeting the standards of competent practitioners” – a bit of a circular definition, but the question is raised nonetheless.)

    It will be interesting to see if this conversation starts coming out into the open in some quarters. In the US, it took decades for “zealously” to be replaced by “reasonable diligence” (ca. 1988 in the Model), and even today many lawyers refer to “zealous representation.”