Innovating Regulation on the Prairies

Several years ago on this site, Mitch Kowalski posed a question that merits another look. In his post “What if the western provinces saved the profession?”, Mitch asked:

What would happen if a group of western provinces (Alberta, Saskatchewan and Manitoba for example) decided to strike out on their own and allow ABS-type structures in their jurisdictions?

His conclusion was that “…once the snowball starts rolling in any province it will be unstoppable.”

Well, it’s winter on the prairies and guess what? It’s snowing.

The law societies in Manitoba, Saskatchewan and Alberta have recently released a discussion paper on a number of potential innovations in the regulation of lawyers in these jurisdictions. The paper, Innovating Regulationtackles three main topics: entity regulation, compliance based regulation and regulation of alternate business structures.

The release of the discussion paper is interesting but hardly newsworthy of itself, given similar discussions are already ongoing across the country.

What is worth taking notice of here is the collaborative approach. Three law societies are working together because, in their view:

…these complex issues are best tackled collaboratively.

National lawyer mobility, combined with the proliferation of national and global law firms, drives the need to ensure consistency in approach to legal regulation across Canada. It is impractical to have different regimes across provinces and remain effective.

We are a large geographic country with a small population and, compared to other jurisdictions where regulatory reform is occurring, we have relatively few lawyers. This reality means that our resources are limited and it is strategically wise to share them. It is also our view that a diversity of perspectives from different jurisdictions will achieve better, more effective outcomes.

For these reasons, the law societies of Alberta, Manitoba and Saskatchewan are doing this work together. We are also keeping a close eye on developments across the country, particularly in Nova Scotia, Ontario and British Columbia where work is ongoing.

…This is not a revolution in regulation, but rather an evolution that will be guided by our duty to protect the public interest.

It’s not unheard of for these law societies to collaborate. The CPLED program is an excellent example of the good work that can be accomplished through such an approach.

This leaves me feeling rather optimistic about the possibilities in terms of the future of legal profession regulation in the prairie provinces. At the very least, it gives me a reason to hope the snow doesn’t melt too soon.

 

Comments

  1. Karen,
    If snow is ABS, then it is inevitable that it will turn to water and we will drown in it.

    It is a mystery why anyone would still be interested in selling any portion of the legal profession to non-lawyer profit seekers. Once sold, never, never, ever recovered. Ever. Once a wedge is allowed, the widening of it is a certainty. ABS results in a hollowing out of the middle for the benefit of giant corporations whose sole aim is to make money for themselves. Support for ABS is support for an orgy of anti-competitive consolidations by entities that do not share our ethos and never will, and, by law, cannot. By law, they are beholden to their shareholders, not our clients. And nothing would stop them from, over time, bowling over any protections that the foolish and the short-sighted would try to erect.

    Support for ABS is an admission of failure, of lack of vision, of shallow analysis, of short-sightedness, of little knowledge or understanding of history, economics and human nature. There is not a single benefit trotted out in support of ABS that cannot be achieved, and better achieved, without ABS. Not a single one.

    Would anyone like our most prestigious firms, or the bulk of our mid to small firms, or you yourself, to be owned by Arthur Andersen, AIG, Enron, WorldCom, Societe Generale, Royal Bank of Scotland, Lehman Brothers, Bear Stearns, Volkswagen, Barker Trust, Barlow Clowes, Phar-Mor, Bernie Madoff, Allan Stanford, Tyco International, Health South, Swissair, Baninter, HIH Insurance, Polly Peck, Barings Bank, Bank of Credit and Commerce, Nordbanken, Carrian Group, Bre-X, Equitable Life Assurance, Pacific Gas & Electric, One.Tel, Adelphia, Parmalat, Nortel, Dynergy, Banco Espirito, Union Carbide, and future versions of Medici Bank and the South Sea Company? And those names are just a drop in the bucket.

    How would you like to be a lawyer on the payroll of those entities and then try to get a job when they are exposed for what they are? How do you wash that taint off?

    What about being owned by divisions of arms manufacturers, drug cartels looking to launder money, immigration fraud companies? Russian carpetbaggers with close ties to global destabilization efforts? Companies ostensibly independent but really controlled by foreign communist or totalitarian regimes looking for an in? What about being owned by apparently reputable companies that, nonetheless, find themselves investigated for overstating revenues by hundreds of millions of dollars to attract investment to their house of cards?

    What about being owned by an industry described as “dysfunctional” by the Government of California and as “invidious” by the Supreme Court of Iowa (i.e., the US title insurance industry)? Do you think they could long be kept out of owning a tiny handful of figurehead law firms and wiping out the competition if ABS became the law?

    What about the displacement of lawyers, staff and clients when a large ABS collapses or heads for the hills as has happened several times already in the short history of ABS?

    What about being owned by one of the Big Four giant international accounting firms? Of the four, only Deloittes has not opportunistically set up an ABS in England. The other three have. Those firms are vastly bigger than even our largest law firms. Who do you think is really going to dictate things? Our big (by Canadian standards) law firm which fits into the mop closet of the truly giant accounting firms or the truly giant accounting firms? Every accountant I have spoken to thinks lawyers are completely nuts to even be considering letting the Big Four own any part of us.

    What about being owned by entities whose headquarters are outside Canada or on the other side of the planet? Whose directing minds barely know Canada exists and couldn’t find it on a map if you stuck a hockey stick in Hudson Bay?

    Sell any portion of the legal profession?? We would have to be out of our minds.

    Who are the supporters of ABS? Some of them are true believers and may be forgiven or pitied for that. Others are self-serving seekers of advantage for themselves – management consultants who hope to position themselves for profit, lousy or debt-ridden lawyers who would sell out the public’s and the profession’s interests for some ephemeral personal gain, lawyers who dream of being the next Jeff Winn when the odds of that are similar to winning a major lottery, bureaucrats who would love the excuse that ABS would give them to take over regulation of the profession and extend the reach and number of bureaucrats who would be involved.

    When are we going to stop wasting time and oxygen on ABS and knuckle down and deal with the access to justice problem that dwarfs all other real and trumped up A2J issues combined – the ruinous time and cost of litigation? When are we going to work toward innovations (that we are not already adopting or inventing) that we would either control, own, lease or copy as appropriate? When are we going to wise up and kill ABS deader than dead?

    Brad

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