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Mired in Conflict? Me Deciding Whether You Can Compete With Me

Does it make sense that lawyers elected by lawyers should effectively decide the permitted scope of practice of paralegals with whom they do or would compete for work? Does it make sense that lawyers and paralegals elected by their peers should decide what legal services can only be provided by lawyers and paralegals and thereby maintain their monopoly?[1]

On the other hand, does it make sense that elected lawyers and paralegals should decide what education and training is appropriate for licensing and what professional conduct should be required for appropriate advocacy in courts and tribunals and generally? Does it make sense that elected lawyers and paralegals have responsibility for continuing professional development, professional liability insurance and compensation for losses caused by dishonesty?

These are important questions in the context of self-regulation of the legal and paralegal professions. They do not necessary lead to the same answers.

This column concludes that regulation of the scope of practice of one profession by a competing profession is inappropriate, as is regulation of permitted competition by practitioners potentially or actually subject to competition from other providers. On the other hand, professional self-regulation of competence (at licensing and in practice), professional conduct, liability insurance and client compensation does not raise the same issues..

Independent regulation of legal services generally would remove the conflict of interest involved in scope of practice and permitted competition regulation, but would mean the end of professional self-regulation. There are other ways of addressing this significant conflict of interest. The risk of not effectively addressing this conflict of interest is that change will be imposed which may go further than is needed and appropriate. As discussed below, I think that there will likely be pressure for such change as lawyers continue to oppose provision of legal services by non-lawyers.

The evolution from self-regulation of one profession to joint self-regulation of two professions

It is only relatively recently that the law societies did more than govern lawyers and lawyers in training. The long-standing role of the law societies principally involved licensing lawyers and setting rules of professional conduct for and disciplining lawyers. Other regulatory activities included efforts to ensure required lawyer competence in practice, requiring and providing professional liability insurance for lawyers and providing compensation for victims of lawyer dishonesty.

The law societies determined what was required to become a lawyer and only lawyers were licensed by the law societies. As for “non-lawyers”, the governing legislation simply provided that no person other than a duly licensed lawyer could “act as a barrister or solicitor” [2]. Unauthorized practice of law was a statutory offence. While the law societies could seek a court order in respect of unauthorized practice, the court decided what was and what was not unauthorized practice[3].

For Ontario, the role of the Law Society changed radically when the Law Society Act was amended in 2006 to provide, in effect[4], for the regulation of two professions; namely lawyers and paralegals. Since regulation, paralegals have been advocates before tribunals and certain courts[5]. As a result of the 2006 amendments, the Law Society of Ontario licenses paralegals, sets paralegal conduct rules, disciplines paralegals – and addresses paralegal competence and paralegal insurance and operates a paralegal compensation fund.

As the regulator of two professions, the Law Society of Ontario continues the self-regulatory paradigm. Lawyer benchers, paralegal and lay benchers together regulate the two professions.

Regulation of scope of practice in Ontario

When the Law Society only regulated lawyers, there was little if any issue as to scope of practice. Beyond the legal profession, the issue was unauthorized practice of law. Within the legal profession, all lawyers are entitled to practice in any area of law subject to the obligation to be competent in the work that they do. This is quite unlike physician licensing, for example, where specialist licenses are issued[6].

The authority given to the Law Society under the 2006 amendments was very significant with respect to scope of practice of non-lawyer licensees. First, a new concept was introduced namely “providing legal services”. Section 26(1) of the Act provides that “Subject to subsection (5), no person, other than a licensee whose licence is not suspended, shall practise law in Ontario or provide legal services in Ontario”. Subsection (5) provides that “A person who is not a licensee may practise law or provide legal services in Ontario if and to the extent permitted by the by-laws”.

Section 27(1) of the Act provides that “The classes of licence that may be issued under this Act, the scope of activities authorized under each class of licence and any terms, conditions, limitations or restrictions imposed on each class of licence shall be as set out in the by-laws.”

In other words, only those licensed by the Law Society – and those permitted by the Law Society to do so without a license – are permitted by the Act to provide legal services. And the Law Society may issue different classes of license with different scopes of practice.

To date, the Law Society has only established lawyer licenses and paralegal licenses[7]. The scope of practice of lawyer licenses is general. The scope of practice of paralegal licenses is limited to appearing before tribunals and some courts[8] which, notably, does not include family law.

Three points can be taken from this review.

The first point is that the Law Society could decide to expand the scope of the paralegal license to include appearing in certain family law matters. Similarly, the Law Society could decide to expand (or reduce) the scope of the paralegal license to appear in summary conviction court in respect of additional offences.

The second point is that the Law Society could decide to create entirely new classes of license – for example, the Law Society could establish a “navigator” class of license[9] or a “form filler” class of license or the Law Society could establish a separate family law class of license separate and apart from the existing paralegal license.

The third point is that the Law Society could decide to permit certain groups or persons to provide legal services without needing a license[10]. For example, a license is not required in some jurisdictions to practice law where no fee is charged. The Law Society could decide that certain charities and not-for-profits could provide some or all legal services without being licensed[11].

Until the 2006 amendments, the Law Society had no authority to decide who other than lawyers could provide legal services, whether licensed or unlicensed. Now the Law Society has broad jurisdiction to permit new types of legal service providers, licensed or unlicensed, and to decide whether to expand or reduce the paralegal scope of practice.

As for other provinces, an act was passed in 2018 in British Columbia which provided for regulation of paralegals by the Law Society of British Columbia[12]. These provisions are not yet in force. The act permitted for paralegal benchers and that the benchers could establish the scope of practice of law of licensed paralegals or of classes of licensed paralegals. In December of 2018, a motion was passed at the Annual General Meeting of the Law Society of British Columbia seeking further consultation and opposing licensing of paralegals in the family law area. (861 lawyers voted in favour, 297 voted against and 62 abstained.) It remains to be seen if and when paralegal licensing and regulation will proceed in British Columbia in the face of significant opposition from practicing lawyers.

In Saskatchewan, an act was passed in 2019 to provide for “limited licenses” for non-lawyers to practice law subject to conditions and restrictions[13]. This act is not yet in force. The act followed the Final Report of the Legal Services Task Team of August 2018 which recommended, amongst other things, the creation of limited licenses for the practice of law to be granted by the Law Society with appropriate requirements and practice conditions based on the circumstances of the licensee.

While Ontario got there first, it seems that the law societies are becoming the regulators of legal services and not just the governors of the legal profession.

Self-regulation and the regulation of legal services

There are conflicts of interest where a profession regulates itself. There is the risk that incumbents will limit entry into the profession to reduce or avoid competition. There is the risk that ethical standards will not be maintained in discipline because members of the profession may have undue sympathy with their colleagues. There is the risk that choices will be made to limit the regulation to minimize costs for the profession at the expense of the public interest. There is the risk that elected governors will seek to protect the interests of the profession rather than the public interest. These are real risks which have to be weighed against the benefits of self-regulation including independence from the state and the application of valuable expertise and experience to the realities of practice.

What is not well understood and needs to be understood is that the evolution from regulating lawyers to regulating legal services results in new and more significant conflicts of interest.

With Convocation in Ontario being made up of 40 elected lawyers, 5 elected paralegals and 8 appointed lay benchers, decisions regarding the appropriate scope of practice of paralegals are practically being made by a Convocation dominated by lawyers who are elected by lawyers. To state the obvious, the risk of conflict of interest actually affecting decisions is greater where the issue is whether competition should be suffered by those who elect the decision-makers than in other areas. This risk is far greater than, for example, establishing the appropriate conduct required for advocacy where both professions act as advocates.

In considering conflicts of interest, it is necessary to be concerned about actual adverse effect on decision-making. But the reality is that one can never be sure whether a conflict has been acted upon or not. Indeed, a decision-maker may not realize that their judgment has been affected. One of the reasons to be concerned about conflicts of interest (or reasonable apprehension of bias which amounts to much the same thing) is to ensure reasonable confidence in the decision.

Again to state the obvious, proposals to allow new licensed or unlicensed legal service providers have proven highly controversial for lawyers. This has been true in family law and in other areas. Similarly and leaving aside the merits of the matter, lawyers have vigorously opposed the introduction of business structures intended to encourage innovative and competitive provision of legal services[14].

While the tension between lawyers and paralegals is obvious with respect to paralegal scope of practice, professional self-interest is also real but less obvious in respect of the provision of legal services by unlicensed persons and new forms of licensees. As mentioned above, one of the potential areas on innovation in family law is licensing “navigators” or “form-fillers”. Another is allowing persons other than licensed paralegals to become family law service providers after appropriate training and testing; for example, law clerk, social workers, accountants and psychologists. Paralegals are commonly enthusiastic about allowing licensed paralegals to expand their scope of practice and resistant to allowing other new entrants. A further example is the decision to allow “civil society” organizations to provide free legal services to their clients. Both lawyers and paralegals were initially resistant. Both sought to ensure that only licensees provided services.

When the Law Society was given regulatory authority over paralegals, the Law Society Act was amended to provide that the Law Society has a duty to facilitate access to justice for the people of Ontario. This duty makes eminent sense given the Law Society’s new responsibility to decide who can provide legal services in Ontario and whether the provider need be licensed and on what basis. This responsibility is properly undertaken in the public interest to facilitate access to justice – not in the interest of the professions.

But lawyers and paralegals routinely think that access to justice means access to themselves[15]. This is understandable and can often be true. But it isn’t always true and arguments framed as facilitating access to justice are often compromised by self-interest.

Where does this go?

Whether in respect of family law or criminal law or any other area, it would be very surprising if paralegals would perceive as fair and merit-based any adverse decision as to their scope of practice made by a self-regulating profession that would suffer competition from paralegal practice in the subject area. By way of analogy, having doctors decide what nurses could properly do will not be perceived as fair and merits-based by nurses despite the expertise of doctors as decision-makers.

What then are the likely responses on the part of paralegals in the face of a decision perceived to be unfair and inappropriate. Paralegals may simply be resigned to the status quo but with confidence in regulation being diminished. Paralegals would reasonably not perceive that they were a self-regulating profession but rather that they were unfairly regulated by a competing “senior” profession.

Another likely response is rejection of the current system and an attempt to take paralegals out of the Law Society to a new college or “para-law society”. This would be consistent with the recommendation made in the Cory Review in June 2000[16]. Such a “para-law society” could be a self-regulating regulator dominated by regulated paralegals or could be an independent regulator made up of “representatives of the Attorney General, the general public, independent paralegals and the Law Society of [Ontario]” as recommended in the Cory Review.

It is clear, in my view, that a self-regulating “para-law society” would be no improvement in matters of scope of practice. Just as lawyers have an interest in avoiding competition from paralegals, paralegals have an interest in expanding their permitted scope of practice. Having had the advantage of nearly a decade at the Law Society, it is appears obvious that paralegals are just as affected by the fact that they are paralegals in these matters of professional self-interest as lawyers are affected by the fact that they are lawyers. Respectfully and accepting that elected benchers mostly try to do the right thing, a decision by elected paralegals as to paralegal scope of practice is no less compromised than a decision by elected lawyers.

There are two further reasons that the “para-law society” approach is not desirable in my view. The first is that the issue of paralegal scope is just part of the problem. Whether in one regulator or in two regulators, decisions made by regulated practitioners about potentially competitive service providers are compromised by self-interest. The examples given above with respect to navigators and form-fillers and who might become a family law service provider apply here. The same is true with respect to the important question of direct-to-consumer legal services through technology.

The second reason is pragmatic. There is much about legal and paralegal practice that is the same. This makes perfect sense as paralegals are advocates in tribunals and in certain courts while lawyers are advocates there and elsewhere. There would be significant waste in having two different legal services regulators and real loss of expertise currently applied for the common benefit of lawyers and paralegals.

There is of course another approach that could be taken which is to end self-regulation and to provide for independent regulation of legal services that does not include or is not dominated by elected practitioners. There are some who argue that self-regulation is entirely problematic and not just, as I suggest here, with respect to scope of permitted practice and permitted competition.

My view is that those who think that self-regulation is valuable should be concerned about the new responsibilities assumed over scope of practice and permitted competition. The inherent conflict in a self-regulating profession dealing with scope of practice of another profession and permitted competition has the prospect of delegitimizing self-regulation generally. The risk is that an answer to problematic conflicting interest would go further than necessary.

Approaches to consider

If one prefers to modify self-regulation rather than abandon it, there are several approaches that might be considered:

  • A new regulatory body (similar to the Legal Services Board in England or the Office des Professions in Quebec) could be established to take over issues of scope of practice of and permitted competition, leaving the traditional regulatory work such as licensing, professional competence and professional conduct regulation to continue be done through self-regulation.
  • An independent standing committee comprised of non-benchers, which might or might not include a limited number of lawyer and paralegal licensees, could be established to advise benchers on scope of practice and permitted competition. Such a committee would have moral but not actual authority. This is very similar to the current Paralegal Standing Committee (“PSC”) which has 5 paralegal, 5 lawyer and three appointed non-licensee bencher members[17] but only advises a lawyer-dominated Convocation. In England and Wales, the Legal Services Board established a Legal Services Consumer Panel which provides “independent advice to the Legal Services Board about the interests of legal services consumers”.
  • An independent standing committee comprised of non-benchers, which again might or might not include a limited number of licensees, could be established with decision-making authority with respect to scope of practice and permitted competition. This might well require legislative change as it is the benchers in Convocation who have authority to make by-laws that determine who may provide legal services without being licensed and the classes of licenses and related scopes of practice.
  • A separate authority within the Law Society could be established under the Law Society Act (analogous to the Paralegal Standing Committee, Law Society Tribunal, the Proceedings Authorization Committee) to take on this role. This would not be truly different than the independent committee previously mentioned but the optics and operation of the authority might usefully be different.
  • A more general approach would be to increase the proportion of non-licensee benchers and decrease proportion of elected licensee benchers – and perhaps include some appointed licensee benchers on the basis of skills and expertise. This was the approach recommended by the CBA Futures Initiative in 2014 which has been followed in Manitoba where the governing body is comprised of 12 elected lawyers, four lawyers appointed based upon a skills matrix, six public representatives appointed by a statutory committee, one elected articling student, the immediate past president of the Law Society and the Dean of the Faculty of Law at the University of Manitoba. This could be seen as being a mixed model approach to legal services regulation.

The optimal approach is not obvious. Reasonable people will have differing views. Taking the underlying thesis of this column to heart, it seems to me that effectively addressing these questions ought not to be left just to existing benchers who are mostly elected by practitioners and who naturally see value in the status quo in which they are the decision-makers.

 

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[1] This simplified presentation of the problem omits to say that 8 of the 53 benchers in Convocation in Ontario are neither elected lawyers nor paralegals but rather are appointed benchers.

[2] Sections 50, 50.1 and 50.2 of the Law Society Act (Ontario) immediately prior to October 18, 2006

Section 15 of the Legal Profession Act (B.C.) – only a practising lawyer is “permitted to engage in the practice of law”. The term “practice of law” is defined in the Act

Section 106 of the Legal Profession Act (Alberta) – Subject to certain exceptions, “(1) No person shall, unless the person is an active member of the Society, (a) practise as a barrister or as a solicitor, (b) act as a barrister or as a solicitor in any court of civil or criminal jurisdiction, (c) commence, carry on or defend any action or proceeding before a court or judge on behalf of any other person, (d) settle or negotiate in any way for the settlement of any claim for loss or damage founded in tort.”

Section 16(2) of the Legal Profession Act (Nova Scotia) provides that, subject to certain exceptions, “No person shall carry on the practice of law in the Province for fee, gain, reward or other direct or indirect compensation”. The term “practice of law” is defined in the Act.

[3] For example, Law Society of Upper Canada v. Boldt, 2006 CanLII 9142 at paras. 48 to 51

[4] The Law Society Act actually makes no mention of paralegals but speaks of the practice of law and the provision of legal services. It was clearly intended that paralegals be providers of legal services. But the Act does not say this and clearly does not limit the provision of legal services to paralegals (as the paralegal profession was and is).

[5] LSO By-Law 4, section 6 – paralegals represent clients in “proceedings” as defined in section 6(1)

[6] Called Certificates of Registration under the Medicine Act (Ontario)

[7] I will refer for ease of reference to the L1 and P1 licenses which are the ordinary lawyer and paralegal licenses.

[8] Small Claims Court, the Ontario Court of Justice under the Provincial Offences Act and in summary conviction court under the Criminal Code (Canada) in respect of certain offences

[9] Roles Beyond Lawyers: Evaluation of the New York City Court Navigators Program In New York City, a program provides “navigators” — trained and supervised individuals without full, formal legal training — to unrepresented litigants in New York City’s civil courts.

[10] This is not novel. The LSO Bylaws, for example, permit unlicensed people to provide some legal services to family members.

[11] Sub-section 26.1(5) of the Law Society Act provides that “A person who is not a licensee may practise law or provide legal services in Ontario if and to the extent permitted by the by-laws”.

Interestingly, section 16(2) of the Legal Profession Act (NS) provides that “No person shall carry on the practice of law in the Province for fee, gain, reward or other direct or indirect compensation, unless the person is [licensed to practice law]”

[12] Bill 57 – 2018, Attorney General Statutes Amendment Act, 2018

[13] The Legal Profession Amendment Act, 2018

[14] OTLA urges all members to vote for candidates that oppose implementation of ABS as proposed by the Law Society.

[15] One of the current common rhetorical devices is to argue for measures favourable to lawyers and paralegals on the theory that doing so facilitates access to justice. This may sometimes be true.

[16] A Review of the Regulation of Paralegal Practice in Ontario, 1999-2000

[17] While section 25.1(2) of the Law Society Act could allow Convocation to delegate decision-making power to the Paralegal Standing Committee with respect to the “regulation of persons who provide legal services in Ontario”, this has not happened and PSC remains the policy advisor to Convocation with respect to paralegal regulation. In my view, a practitioner-dominated committee ought not to decide paralegal scope of practice questions and the PSC is not the right vehicle for the broader issue raised in this column.

Comments

  1. Well written and on point as always.

  2. An informed and considered perspective. Mr. Mercer’s analysis is an excellent summary of the current state of affairs and potential paths forward to legal regulation that works in the public interest.

  3. This post identifies the essential problem admirably. A month ago I would have also agreed that we need to follow one of the options this blog post lays out. Today however I am more optimistic about the LSO’s potential to make decisions in the public interest notwithstanding the conflict of interest Malcolm identifies. My faith has been somewhat renewed by the LSO’s Family Legal Services Provider Licence Consultation Paper (https://lawsocietyontario.azureedge.net/media/lso/media/about/convocation/2020/flsp-consultation.pdf).

    It proposes a very broad scope for paralegal practice in family law. If the proposal is adopted by Convocation notwithstanding the new competition involved lawyers, that would offer some evidence that the current system is able to function in the public interest.

    The role of the Ministry of the Attorney General in Ontario’s legal services regulatory regime should not be overlooked. The Legislature can unilaterally amend the scope of practice for any class of legal practitioner, by amending the Law Society Act. If the government makes it known that it is monitoring LSO decisions regarding scope of practice, and is prepared to deploy this power if necessary, that gives LSO an incentive to do what’s right.

    LSO’s new openness to paralegal family law practice would not likely have come to pass absent the MAG’s Bonkalo Commission report (https://lso.ca/about-lso/initiatives/closed-initiatives/family-law-review). If the LSO were to ignore Madam Justice Bonkalo’s recommendation of paralegal family law practice, new legislation would be an option on the table.

    To Malcolm’s list of Approaches to Consider, I think we should add “MAG-Monitored Self-Regulation.” If the LSO’s proposed Family Legal Services Provider Licence is accepted by Convocation, then more dramatic reforms may be unnecessary.

    LSO Consultation re Paralegal Family Law Practice: https://lso.ca/about-lso/initiatives/family-law-action-plan/flsp-call-for-comment

  4. ANGELA L BROWNE

    A very interesting article. As an ‘elder’ among the Paralegals, I find this continued discussion of the nature and type of regulation and authority by the LSO (or by another body) to be interesting. Malcolm Mercer always had good ideas. At the same time, there are many among the Paralegals that continue to want their “own” regulatory body, but at this stage, I don’t think that would work especially given the costs of operating such an organization. Self-regulation is preferable to government regulation, particularly as many of our advocacy efforts involve the government as a responding party.

    We are still the new kids in town chomping at the bit to progress forward and indeed, we should. The recent discussions in family law practice for Paralegals are indicative of how both Paralegals and Lawyers are moving forward on the overall mandate of ‘public interest’. I would certainly like to see the number of Paralegals grow within the LSO. Ours is a growing profession that many are directly choosing, as opposed to “can’t become a lawyer, so I will stick to being a paralegal”. Many of my Paralegal peers are highly skilled and qualified in what they do, as is the case with many lawyers. Mutual respect should be the goal.

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