Column

The Bencher From Amazon?

For generations, Canadian lawyers have been regulated themselves. Law Societies, with elected lawyer benchers and, more recently, with appointed lay benchers, have governed the legal profession. We refer to this as professional self-regulation.

It is increasingly recognized that legal needs are not fully satisfied by lawyers. Some legal needs are satisfied by others. Some legal needs are not satisfied at all. It is now understood that access to justice is an important and difficult policy challenge. In Ontario, section 4.2(2) of the Law Society Act now expressly states that the Law Society has “a duty to act so as to facilitate access to justice for the people of Ontario”.

As legal needs can be satisfied by new types of professionals or in new ways (technology for example), the question of the role of the Law Society arises. If a Law Society becomes the self-regulator of more than one professions, the nature of the Law Society changes. If a Law Society becomes the regulator of legal services generally, the nature of the Law Society further changes.

The point of this column is to suggest that thinking about new ways of providing legal services should include thinking about the implications on the existing regulation. This is not to suggest that nothing should change but rather that there may be more than one way to change and that the implications should be considered.

The Law Society of Ontario regulates two professions

Ten years ago, the Law Society of Ontario[1] became the regulator of Ontario paralegals. This was accomplished by significant amendments to the Ontario Law Society Act.

Previously, the Law Society only regulated lawyers. It was the self-regulator of one profession. Lawyers elected 40 benchers to Convocation[2]. The provincial government appointed eight non-lawyer benchers to Convocation. Only lawyers were permitted to “practice law”. The Court of Appeal for Ontario had concluded many years earlier that paralegal agents were not engaged in the unauthorized practice of law[3].

How paralegal regulation was introduced in Ontario

The 2006 amendments to the Law Society Act don’t actually mention paralegals. Rather a new concept was introduced into the Act: “providing legal services”. The “providing legal services” concept is very broadly defined in section 1(5) of the Act such that a person provides “legal services” if “the person engages in conduct that involves the application of legal principles and legal judgment with regard to the circumstances or objectives of a person”.

Having very broadly defined the provision of “legal services”, the Act prohibits the provision of legal services without a license, subject to certain exclusions. Two types of licenses are contemplated namely licenses to practice law and licenses to provide legal services.

The result (at least so far) is two types of licensees, lawyer licensees and paralegal licensees. Lawyer licensees can practice law. Paralegal licensees can provide legal services within the scope of their licenses – and their licenses only permit them to act as advocates in tribunals and in some courts in certain circumstances.

The 2006 amendments also provided for the election of benchers who provide legal services. Currently, five paralegal benchers are elected to Convocation.

The changing nature of the Law Society

There are two main points to be drawn from this legislative history. The first is that the consequence of having the Law Society become the regulator of paralegals was that the Law Society became the self-regulator of two professions. Lawyers and paralegals are now elected to regulate lawyers and paralegals. Lawyers and paralegals sit on hearing panels to assess the professional conduct of lawyers and paralegals.

This approach was not inevitable. A separate self-regulator could have been established to regulate paralegals. Some contended for this. England and Wales provides an example of separate regulators. There are separate regulators for solicitors, barristers, legal executives, licensed conveyancers, patent and trademark attorneys, costs lawyers and notaries. These “front-line” regulators are supervised by the Legal Services Board[4]. In Canada, the regulation of doctors, nurses and other health care professionals provides another example. There are separate regulators for different health care professions rather than a regulator of different types of health care professionals.

That the nature of the Law Society of Ontario was changed by the addition of a new profession to its regulatory ambit is significant and may not be obvious to many. If new legal professions become regulated by the Law Society, the nature of the Law Society will further evolve.

The changing scope of the monopoly

In order to regulate paralegals, it was necessary to determine what activities required regulation. While the permitted scope of practice of Ontario paralegals is advocacy, the definition of legal services (and hence the regulated space) was much broader as described above.

In other words, amendments to the Law Society Act carved out a very broad regulatory space while the Law Society authorized licensed paralegal activity only in a portion of that space.

The legislative decision to carve out a broad regulatory space was presumably designed to sweep all unregulated paralegals into regulation without quibbles about what was and what was not regulated. However, the result appears to be to have prohibited unregulated service provision in areas where neither lawyers nor regulated paralegals provide services.

Again, this was not the only possible choice. Again, we see a different approach in England (and Wales). The English approach is to define certain legal activities as being “reserved” (subject to exemptions) with the remaining legal activities being “unreserved”. The reserved legal activities are the exercise of a right of audience, the conduct of litigation, reserved instrument activities, probate activities, notarial activities and the administration of oaths[5].

The English approach allows licensed and unlicensed persons and entities to provide unreserved legal activities but, subject to exemptions, only licensed persons and entities to provide reserved legal activities.

The policy choice underlying the amendments to the Law Society Act in 2006 substantially extended the Ontario “reserved” space in order to ensure that paralegal agents were brought into regulation. The effect was to extend the regulatory space beyond where lawyers and paralegal agents provide legal services.

So what?

There has been increasing discussion about the ability of technology to provide legal services where legal services are not now being provided. The economic models of professional services and of technological services are quite different. Professionals have limited time to service clients and the cost of their time does not decrease. On the other hand, technology can service many people once built and the cost of serving one further person commonly drops as more people are served.

There are lots of issues to work through around technological provision of legal services. This column is not intended to do that work. The point of this column is a narrower one, namely that the decision to allow technology to deliver legal services has important implications for legal services regulation.

Potential effects of and approaches to allowing technological provision of legal services

Let’s assume that it is the correct policy choice to allow technology to deliver legal services directly where lawyers and paralegals do not now provide cost-effective services.

One way to do this would be to license technology providers by creating a new class of licensees. The Law Society Act allows this. But would it make sense to have a Society with elected lawyers and elected paralegals be the regulator of these new providers? Paralegals would rightly have objected to regulation only by elected lawyers and nurses would not accept regulation only by elected doctors. Neither would make sense in the public interest.

If self-regulation is to be maintained, wouldn’t the logical consequence of regulating technological providers be to have their elected representatives on the board. Said more plainly, if Amazon provided technologically based legal services, should there be a bencher from, or elected by, Amazon? This would of course change the nature of the Law Society by adding new types providers to the Convocation table, benchers who are not professionals in the traditional sense of the word.

But this is not the only possible approach. Another is to take the English approach (or the Canadian approach for health professions such as doctors and nurses) and to have different regulators for different types of providers. There could be a separate regulator of technological providers.

An a third approach would be to adopt the English approach to reserved and unreserved activities and to reduce the scope of the regulatory sphere so as to allow technology to deliver legal services outside of the reserved space subject only to general consumer regulation.

To be clear, I do not contend for any conclusion in this column but rather seek to highlight that the decision to move beyond legal service delivery by one established profession has its complexities. Those complexities can be managed in different ways and that complexity exists is not a sufficient reason to avoid change in the public interest. But there are things to think about.

The options

In February 2018 LawPro Magazine addressed the Top Legal Disruptions asking “How the profession should respond to major disruptions”. As the article said:

At the most basic level, there are just three options for dealing with alternative legal service providers. They are:

  1. prosecute them for the unauthorized practice of law;
  2. ignore them; or
  3. bring them into the legal services tent.

The point of this column is that the “bring them into the legal services tent” option requires some serious thought about the nature and the design of the tent.

_________________________________

[1] Then called the Law Society of Upper Canada

[2] Elected lawyer benchers could become life benchers and thereby continue to participate as benchers. Treasurers could continue to participate as benchers.

[3] Regina v. Lawrie and Pointts Ltd.(1987), 59 OR (2d) 161 (OCA)

[4] These regulators are not self-regulators. Their boards are not elected by the professions that they regulate but rather are appointed by government..

[5] Section 12 and Schedule 2 of the Legal Services Act 2007.

Comments

  1. The approaches to the access to justice problem (the A2J problem) implied by the above article will not involve changes to the following two factors, which makes solving the problem by a law society impossible: (1) law societies will never change their management structure; and, (2) they will never sponsor innovations to the method by which legal services are produced that will enable lawyers to produce affordable legal services for middle and lower income people.
    And so, instead of asking, why is it that the present method by which the work is done to produce legal services cannot produce affordable legal services for middle and lower income people, the above article considers creating new types of legal service workers and maybe dividing up the regulation of all types of providers of legal services. As long as that remains the approach to the problem, the legal profession will in effect, repeatedly retreat to a smaller and smaller sphere of activity because it refuses to change as society and technology change.
    Instead, other professions and all of manufacturing have altered their methods of doing the work to produce goods and services so as to be able to provide affordable goods and services. And so, the solution to the A2J problem exists in hundreds of examples all around us. But if the above two factors remain fixed, law societies will never be able to solve the A2J problem. Then, the only way to solve it will be state-funded programs of socialized law. But that does not yet have the very competent activist leader necessary to make it a pressing political issue. The kindling is there in abundance, but the match has not yet been provided.
    The ever-changing needs of society and the march of technology will be creating more variations of the A2J problem, and its victims will continue to grow. But the benchers of law societies will not face what is the cause of the problem—the method by which legal services are produced is very obsolete. Adding technology to an obsolete method of production cannot produce affordable services or goods, just as embellishing a bicycle with a motor, racing tires, and gears, etc., will not produce the equivalent of a motor vehicle that the solution requires. CanLII is a very successful application of technology but it cannot have any impact upon the A2J problem because the raw materials that it provides go into the very obsolete factory that is a law firm. For over 100 years, no manufacturer has been content to make itself more efficient by merely adding technology. That improves cost-efficiency but it doesn’t produce affordability because it doesn’t create the large economies-of-scale that affordability makes necessary. “There are no economies-of-scale in the practice of law.” And so it is that all manufacturers have moved from cottage industry methods of production (which is what the legal profession still uses) to support-services methods. The only external, highly specialized, high volume support services that the legal profession has are law book companies. In comparison, no doctor’s office provides all treatments and all remedies for all patients the way a lawyer’s office does for all clients. In the medical profession innovation in the method of doing the work to produce medical services never stops. In the legal profession it never started.
    The solutions considered in the above article keep the production of legal services by lawyers fixed and without change. Therefore considering other types of legal services workers becomes necessary. That approach to the problem will cause the legal profession to repeatedly retreat to be smaller and smaller profession. The American experience clearly shows that, that process is being speeded up by the many commercial producers of legal services, such as, LegalZoom, LegalX, and Rocket Lawyer. They will do the same here in Canada, because their method of production involves large economies-of-scale. Their target is the market of the general practitioner. Law societies lack the ability to defend that market. But if law societies had focused on sponsoring a support services method of producing legal services so as to achieve affordability, the commercial producers of legal services would not exist. Instead, the legal profession is just another industry being bypassed by technology. Creating new types of legal services workers merely creates new roads by which it can be bypassed.
    In 1979, a bencher of the Law Society of Ontario’s (LSO’s) Legal Aid Committee (which at that time was the manager of what is now called Legal Aid Ontario) told me: (1) the Law Society’s greatest fear was socialized law; and, (2) Legal Aid would be used as the essential foundation for any program of socialized law. And so, because of that conflict of interest, for 30 years (1967-1997) the Law Society of Ontario managed Legal Aid badly. As a result, two 1997 reports (see below) recommended that LSO not be the manager of Legal Aid because of: (1) conflict of interest; and, (2) refusal to innovate. Those are the same two causes of the present A2J problem. They are the product of the obsolescence of law society management structure.
    The present conflict of interest is that, because of the nature of the major problems of law societies, it is no longer possible to be both a good lawyer and a good bencher, i.e., our law societies are managed by part-time amateurs because they lack the expertise necessary to deal with those major problems. And the refusal to innovate is due to the fact that law societies are like an elected government without a civil service. Such a government cannot govern, which is why the A2J problem exists.
    And so it is that public statements by law society benchers, Treasurers, and Presidents in Canada about the A2J problem do not involve any change to law society management structure, or to the method by which legal services are produced. As a consequence, lawyers won’t disappear, but the general practitioner and the small unspecialized law firm will disappear. With the loss of those practitioners, law societies will have lost somewhere between 60 and 70% of their membership. Such a decrease will make the legal profession and its law societies not only much smaller, but also much less important to society and its governments. We will have lost our connection to middle and lower income people. They are the majority of taxpayers and the majority of voters. They pay for the justice system whereat all lawyers, directly or indirectly, earn their living. To remain without attempting to give those voters affordable legal services provided by lawyers, leaves us very vulnerable to the power of those voters and their governments being used against us because we have no answer to the accusation that our law societies have made no attempt to solve the A2J problem.
    And so, in your jurisdiction’s next bencher election, vote only for candidates that provide an outline of a strategy or program to solve the A2J problem by enabling lawyers to provide affordable legal services to middle and lower income people. I mean services that are more than just routine legal services. They are still affordable.
    To remain fixed in management and production methods is a recipe for very serious self-inflicted injury, if not abolition. Nineteenth century management and production methods cannot be competent in the 21st century. For the solution to the A2J problem, see this article:
    Access to Justice—Unaffordable Legal Services’ Concepts and Solutions (SSRN, pdf., June 7, 2018); online: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2811627 .
    —–
    The two reports that recommended that LSO not be the manager of Legal Aid Ontario were:
    (1) the report by Professor McCamus of Osgoode Hall Law School in 1997, “Report of the Ontario Legal Aid Review-A Blueprint for Publicly Funded Legal Services”; and, (2) the report by Professors Zemans and Monahan, also of Osgoode Hall Law School at York University, in their 1997 study for the York University Centre for Public Law and Public Policy, “From Crisis to Reform: A New Legal Aid Plan for Ontario” (Toronto, 1997). And, the “Report of the Legal Aid Review 2008,” being the report of University of Toronto, Faculty of Law, law and economics professor, Michael Trebilcock, to the Attorney General of Ontario, adopted all of the recommendations of the McCamus Report. The Ontario, Legal Aid Services Act, 1998, ended LSO’s management of Legal Aid Ontario.

  2. Malcolm, an excellent column, as always. Your reference to the College of Physicians & Surgeons reminded me of a post I wrote way back in 2007, “Divided profession, collective governance,” that touched on similar issues: https://www.law21.ca/2008/01/divided-profession-collective-governance/.

    The spectre of Amazon or LegalZoom placing a representative on the profession’s board of governors is both logically consistent and practically absurd, which is one of my favourite combinations. There’s no way that the law society would ever allow that to happen; equally, there’s no good reason, under our current regulatory model, why it should not.

    What I think we’re really running into here is the problem of conflating “self-regulation” with “legal services regulation.” Self-regulation means, or ought to mean, that lawyers (and in Ontario, paralegals) police themselves and order all their professional comings and goings, e.g., bar admission, competence standards, specialist designation, complaint investigation, discipline and disbarment. Self-regulation is a safeguard of professional independence and a barrier against state interference in lawyers’ affairs. I’m a proponent and defender of lawyer self-regulation. But it is focused on the lawyer in particular and the profession in general.

    To my mind, “legal services regulation” is, or ought to be considered, a different beast: It’s the regulation of the legal services *provided*, rather than the legal services *provider*. It’s output-based, not input-based. Legal services regulation asks, “Do the legal services that were purchased by the buyer meet a minimum acceptable standard of quality and competence? Did the legal consumer purchase an unfit product or terrible advice?” These are questions that could be asked equally of a lawyer, a paralegal, a notary, and a software program. In the very near future, they will be.

    The assessment of whether a software program competently generated a last will and testament clearly does not fall within any reasonable definition of “lawyer self-regulation.” But I would even argue that the assessment of whether a *lawyer* competently generated a last will and testament is not, primarily, an act of self-regulation either. Subjecting that lawyer to consequences for his incompetent service? Yes, that’s lawyer self-regulation. But *determining* whether there was incompetence? That’s a prior activity, one focused not on the lawyer, but on the client. It should be assessed not by a lawyer regulator, but by a legal services regulator.

    We need to separate the assessment of the acceptability of a legal product or service from the regulation of the entity that provided it. They are closely related, to be sure. But they’re not the same thing.

    There is a manifest need for robust regulation of legal products and services, because law is a sector of society in which most consumers cannot adequately judge for themselves the effectiveness of their purchase, and the impact of that service on their lives may be enormous. But this requires the assessment of the *outcome* of a legal service — whether delivered by a lawyer, another human, or a machine. That’s not “self-regulation.”

    So I guess this is a roundabout way of saying that I favour the “reserved/unreserved activities” approach in England & Wales (with the proviso that the placement of activities into each category is a fraught business, e.g., https://www.law21.ca/2010/08/will-writing-and-the-redefinition-of-legal-services/). It’s the legal activity, and the purchaser of that activity, that matters first and foremost. Let lawyers regulate lawyers. But let another group — including, but not entirely composed of, lawyers — regulate legal services.

    One last thought. Most lawyers, confronted with the bizarre vision of Amazon’s Jeff Bezos or LegalZoom’s John Suh sitting on a law society or state bar regulatory panel, would instantly assume that these individuals would rule according to their own corporate interests and would object to their inclusion on that basis. “You really think Jeff Bezos would rule that an Amazon legal service was incompetent?” they would scoff. And I would then ask them how or why society should view lawyers assessing lawyer activity any differently.

  3. Hi Jordan

    You write “We need to separate the assessment of the acceptability of a legal product or service from the regulation of the entity that provided it”.

    If I understand, I don’t think this proposition works.

    Of course, clients are and should be able to go to the courts where they seek recourse for services supplied below required standards. This would be true whether the supplier is a professional or something else. In this uncontroversial sense, I agree with the proposition.

    Otherwise, quality of service is addressed in existing regulation in several ways. Licensing requires demonstration of entry level competence. Ongoing professional development is required. Practice reviews, spot audits and other quality assurance measures seek to ensure acceptability of legal service.

    To divorce self-regulation from quality of service in any of these ways would be inappropriate in my view.

    Further, the Rules/Codes of Professional Conduct include a competence rule and a quality of service rule. It is not enough to be generally competent, the rules require competence and quality of service for specific matters.

    These rules are inextricably bound with the other conduct rules such as avoidance of conflicts, candour, confidentiality, honesty and integrity.

    For example, in many mortgage fraud matters it is often a live issue whether the lawyer knowingly assisted in fraud or was a “tool or dupe”. While there are different ways that one can be a “tool or dupe”, incompetence and/or abdication of practice is common.

    Conduct rules and conduct applications that address conduct generally but excluding quality of service aren’t workable in my view.

    In my view, regulation of professionals requires regulation of competence and quality of service whether self-regulation or otherwise.

  4. The English idea of reserved and unreserved is no panacea. In reality, it just replaces one set of problems with another set, but with the added disadvantages of more government interference in the legal profession, more taxpayer funded bodies, and diffused responsibilities and accountabilities.

    And we should never, never, never, ever use the phrase “whether self-regulation or otherwise” where the legal profession is concerned. There should never, never, never, ever be any consideration given to “otherwise”. When compared to the role played by all other professions, the legal profession plays the greatest role by far in securing and defending our society against the immense power and covetousness of Government.

    Our profession must remain self-regulated. The interests of the public are well-served by having within Convocation a small group of lay benchers and by having a statutory requirement that all benchers regulate in the public interest. In my 23 years there, the lay benchers have been visible and effective reminders of the public interest, and virtually all benchers have taken their public mandate seriously. Indeed, the few benchers who persist in believing that they are there “only for my constituency (lawyers and paralegals)”, have zero influence in our ultimate policy-making.

  5. Note that the mandate of the benchers is to regulate in the “public” interest, not the “government” interest. To ensure that laudable and critical distinction requires self-regulation by the legal profession, not regulation that is over-run with government appointees.

  6. Note there is mass confusion among Benchers, between the interests of lawyers and the interests of the public. The interests of lawyers are not the same as the public interest, therefore having legal services regulated by a body overrun by lawyers is a critical error.

  7. Mitch, you have never been a bencher and have no idea whether benchers are confused or not on this issue. I have seen over 100 benchers in action up close and in person for over 23 years, in Convocation, in Committee, on Task Forces, on Working Groups, and in conversation. Understand that there is no confusion among virtually all the benchers during that time as to our public interest mandate. We know it is the law, and the presence of the lay benchers reminds us of that every meeting. Re-read what a wrote two paragraphs above. The benchers who persist in ignoring our public interest mandate get nowhere in Convocation. Further, nothing would be worse for society than to have the independence of the legal profession compromised by regulation by Government. Nothing. Please do not advocate for something so deleterious to the long-term health of Canadian society as Government neutering of the legal profession by government-serving regulation.

  8. Licensing technology providers of legal services by creating another regulator would make lawyers’ and paralegals’ markets very vulnerable to losses by unjustifiable invasions, because: (1) the rapidly increasing sophistication of software of all kinds; and (2) such sophistication increases greatly the difficulty of establishing the dividing line between providing legal advice, and providing mere legal information–it is becoming more and more an opaque and fuzzy dividing line, and a more flexible, moving target to divide.
    Therefore it must be expected that applying the “providing legal services” definition in s. 1(5) of Ontario’s Law Society Act will become increasingly difficult to apply, i.e., increasingly difficult to determine whether it is, “the person [who] engages in conduct that involves the application of legal principles and legal judgment with regard to the circumstances or objectives of a person,” or if it is the person’s software that automates the service that is making the decisions. A regulator, separate from the law society, must be presumed to be biased in favor of an expanded field for such software advances to operate. And just because it’s automated doesn’t mean it isn’t making judgement calls as to legal advice and legal services. Software in other fields is already making decisions and exercising discretions that are more complex than that, e.g., the software used to sort out for e-discovery purposes, the records that are relevant and potentially subject to claims of “privilege” is moving in that direction.
    A separate regulator will in effect, place the onus of proof on the law society to prove that such “technology-providers of legal services” are not staying within their authorized field, rather than those providers having to prove that they are. Policing that situation adequately will be very difficult if not impossible.
    And for the same reasons, a separate profession of “technology-based providers of legal services” should not be created. Consider all of the many “apps” that are being developed from a great many sources–sources that the law society might never be able to police. Letting them develop outside of law society regulation would bring on a great volume of dangerously poor services, and lawyer and paralegal market “invasions.”
    As to the large, and very unregulated volume of sources of “apps” for direct-to-consumer retail delivery of legal services, as well as for lawyers, see this article by, Suzanne Bouclin, Jena McGill, and Amy Salyzyn, “Mobile and Web-Based Legal Apps: Opportunities, Risks and Information Gaps” (SSRN, June 16, 2017, pdf.) at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2960207.

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