Anti-ABS Arguments Continue to Be Based on Emotion – Not Fact
I’m tired.
Tired of ABS fear-mongering.
Tired of disingenuous and protectionist arguments made by those who know very little about ABS – yet are fiercely opposed to it.
And tired of the misinformation being floated by ABS opponents.
Now I know what it was like in the McCarthy-era.
Lawyers (particularly trial lawyers) are trained to argue a position based on logic and evidence – not hyperbole and emotion.
OTLA’s recent pronouncements in the Law Times on December 29, 2014, are particularly troubling:
“We have studied ABS from the time it was first raised by the law society in the summer of 2013, through the release of the CBA Futures report, to the LSUC paper released just this past fall,” said Charles Gluckstein, immediate past-president of the OTLA. “As an association, we do not accept that there are any compelling reasons to move ahead on ABS.”
This however, is merely opinion, not logic – and it’s devoid of any evidence in support. Amusingly, OTLA has provided no compelling reason not to move forward with ABS.
“The proof is just not there,” added Gluckstein. “No matter where it’s been implemented —– whether it’s Australia or the United Kingdom — ABS has not resulted in greater access to justice, lower costs for consumers, nor has it facilitated technological advancements and innovation in the profession. “Despite what the main proponents suggest, ABS is no panacea for any real or perceived ills within the legal profession,” he said.
Sadly OTLA’s “research” is flawed.
OTLA’s “research” seems to have completely missed Salvos Law in Australia.
Salvos Law is owned by the Salvation Army, something that is not permitted in Ontario.
Since its creation in 2010, Slavos Law has conducted over 11,000 pro bono cases in Australia – all at no cost to taxpayers, Legal Aid or even to the Salvation Army.
Perhaps OTLA’s members have conducted a similar number of pro bono cases in the last 4 years. Perhaps OTLA could share its data on this point.
Perhaps helping 11,000 people who could not otherwise afford legal services, at no cost to anyone, is not a compelling reason for OTLA to support ABS. If so, perhaps OTLA could share its metrics for determining what would be a compelling reason. 12,000? 20,000?
Salvos Law is really two firms: Salvos Legal (which is a commercial law firm) and Salvos Humanitarian (a pro bono law firm) – both are wholly owned by the Salvation Army (again not allowed in Ontario). All profits from Salvos Legal fund the work of Salvos Humanitarian.
In 2014, Salvos Law won the very prestigious Australian Law Firm of the Year Award, beating every other law firm in the country. Perhaps OTLA does not consider winning such an honour to be a compelling reason in favour of ABS; again perhaps OTLA could share its metrics for making such a determination.
OTLA’s “research” should have come across Vancouver’s Pivot Legal. In the early part of this century, Pivot Legal tried to create a structure similar to Salvos Law.
An admirable attempt, but unfortunately it failed.
Failure was due to a number of reasons, but most importantly, it was due to a lack of affordable capital, and lack of business management skills. Two things that ABS would bring to law firms.
Again, if OTLA does not see Pivot Legal’s failure versus Salvos Law’s success as compelling, perhaps it should provide an explanation.
As for innovation and technological advancement, OTLA’s “research” has also missed out on Riverview Law in the UK, and Slater & Gordon in Australia. Both firms are miles ahead of every other law firm around the globe in terms of technology – I know, because I’ve actually been to their offices. Both firms have stream-lined the “process” of legal services delivery to make the client experience better and more affordable; both firms were built through access to outside capital.
In fact, Slater and Gordon’s mission statement is: To give everyday people easier access to world class legal services. How many law firms in Ontario have a similiar mission statement?
Legislation in Australia has permitted outside investment in law firms since 2000. So, it’s hardly at the experimental stage. Anyone who suggests otherwise, is being disingenuous.
Finally, what OTLA has forgotten, and by doing so, done a grave disservice to its members, is that ABS provides an exit strategy for lawyers seeking to retire from law.
We hear so much about the so-called “greying of the bar” and that older lawyers have no one to sell their practices to; so they simply close them. Lawyers spend a lifetime building something only to watch it quietly slip away into nothing.
Even mediocre “research” would have found that many UK ABS applications are from small firms – I imagine similar in size to that of many OTLA members – who use conversion to an ABS as an exit strategy, and a way to allow their staff to share in profits. In Australia, Kain C+C Lawyers is a small firm of 17 lawyers which converted to ABS in order to source management expertise that lawyers simply don’t have.
Even the simplest “research” would have found that in Australia, Slater and Gordon has grown through acquiring practices, not destroying them – providing many “greying” Australian lawyers with an exit strategy.
Given these huge “misses” by OTLA, one has to wonder if it did any “research” at all, and whether its fierce opposition is grounded more in emotion, than evidence and logic.
In response to Mr. Gluckstein’s “demand,” I am running for Bencher in 2015, and I am in favour of ABS.
So, OTLA, I have now provided you with the evidence that your “research” missed.
Now, please show me some evidence to support your position that ABS should not be permitted in Ontario.
“Now I know what it was like in the McCarthy era” is a particularly good argument to trot out when accusing your opponents of basing their arguments on emotion and not fact. Nicely done.
@ Mr. Burley,
That OTLA/Gluckstein offered no supporting evidence in its Law Times column is a fact. Thus, in the absence of any evidence to support OTLA’s position – one can fairly argue that Gluckstein’s argument might be based merely on (self-serving) emotion. No? I’m not a lawyer so I could be wrong on this point.
In any event – we can only hope that OTLA will cite its supporting research/evidence (if any) here – in order that we can with it against that cited by Kowalski.
RE: “basing arguments on emotion and not fact”.
Here’s a fact: OTLA provided/cited no supporting evidence for the position it took in Law Times. So perhaps, in response to Mr. Kowalski’s critique – Mr. Gluckstein will provide OTLA’s supporting studies/evidence here (in the form of a Slaw post) – so we can weigh it against that which Mr. Kowalski has offered.
Bam!
Nice one Craig.
But it wasn’t my argument at all.
I stated my case and provided evidence.
I’m still waiting for an evidence-based argument as to why ABS should not be permitted in Ontario.
All I hear is emotional rejectionism. Kindof like the McCarthyites.
Cheers, mate.
It seems some lawyers have an awfully hard time with the concept of evidence when outside the context of a courtroom.
I agree with Mitch that advocating a position without providing any supporting evidence is not a particularly effective strategy to win the case either for or against ABS. The proponents of ABS have provided numerous examples (i.e. evidence) of how it is working in other jurisdictions, but ultimately cannot yet do more than speculate on how it would work here because the regulatory barriers remain in place.
Oftentimes, opponents of ABS seem to be assuming the onus is all on those wishing to see change happen in the legal profession, and that the standard of proof is no less than beyond a reasonable doubt. No evidence is put forward other than in defence of the the status quo (“we’ve always done it this way and what worked in the past is good enough for the present and the future.”) We as a profession are asked to swallow a position based entirely on fear-mongering and nostalgia.
I’m more convinced by the evidence in favour of ABS and don’t need to be absolutely certain of the outcome to conclude on a balance of probabilities (the reasonable civil standard),that the way forward does not look anything like the way behind us.
An interesting article on jotwell.com by John Flood, “The Relevance of Professionalism in a Post-Legal Services Act World”. I notice that he differentiates between the UK’s ABS and Australia’s model of publicly owned law firm as he describes Slater & Gordon; however, ABS is being used consistently in Canada as an alternative to the existing “traditional” structure. I’m just not sure which model is being advocated in Canada. Is it a hybrid of the two? Or, is Canada contemplating it’s own unique model, if so, what would that be?
Verna,
Ontario has requested comments on 4 models:
(i) unlimited non-lawyer ownership of an entity that provides only legal services;
(ii) unlimited non-lawyer ownership of an entity that provides legal services and other services;
(iii) minority non-lawyer ownership of an entity that provides only legal services; and
(iv) minority non-lawyer ownership of an entity that provides legal services and other services.
The last two models however, are useless.
Thanks, Mitch. I know the topic of conflict of interest has been raised in other posts but I don’t suppose these proposals will be open to a public referendum — after all this does affect the client/consumer/public? Since there has been so much mention of the need to educate the public about justice reform it would be interesting to see the results.
Mitch, why would you suggest the last two models are useless? It seems that minority ownership by non-lawyers could at least have some benefit (ability for larger or botique firms to bring in non-lawyers with complimentary practices as partners (accountants, patent and trademark agents, etc.)
In terms of access to capital it may have limited impact (I doubt there’s much public interest in acquiring non-controlling shares of a law firm), but could still have some benefit, either by increasing the number of potential partners as per the examples above, or by providing additional security or repayment options to a lender. Another alternative might be for a company to provide services/assistance in exchange for a minority ownership interest in the businesses they are assisting. There could be some scalable benefits to such a model (common reception services, technical support, bulk subscription and supply purchases, etc.) while at the same time no majority ownership would be required.
Mitch,
Salvos Law merely lets the government off the hook for its chronic underfunding of legal aid. Let us assume that Salvos Law is doing what you say it is doing, and that some people are benefiting, not least the government. Nevertheless, it is not a strong enough argument to allow ABS because ABS causes many more problems than it solves. The Salvos model might help some people (and so would a non-ABS Salvos model*), but ABS would hurt vastly more people. Further, it would take so much money out of the public that the public would have that much less to devote to charitable endeavours. Such harms are hard to measure, but they are real.
*What stops the Salvation Army from donating to a law firm willing to accept donations in return for flat fees on work that the Sally Ann would mandate be done? There is no need for the Sally Ann to own the law firm. Further, even if the Australian Salvos model does some good, the cost of ABS to the broader society is far, far, far, far too high.
There is nothing that is claimed for ABS that cannot be achieved without ABS. We would be far better off if we put our talents and resources into achieving those benefits without resorting to the bottomless hell-hole of profit-motivated, bean-counter remote ownership of the legal profession.
ABS is absolutely certain to lead to corporate concentration and loss of competition. The people in England make no bones about it. Slater and Gordon is targeting over 400 law firms in England to expand their bulk.
Once the cartel were to be fully and firmly in place, the public, after a dubious early beneficial period, would soon (in historical terms) become permanently and badly victimized. Further, again over time, non-lawyer ownership would erode our professional ethics. There cannot be any other result. The current generation of lawyers would continue on as we have mostly out of habit, but the next generation, the generation that will have known no other world other than one featuring remote, non-lawyer paymasters, would be the one that would bring about the erosion. There are no protections that you can devise that would prevent this from happening – money is too powerful. To the extent you give up ownership, you give up independence. To ignore that fact of life is to bury your head in the sand.
Every real benefit foolishly attributed to the ersatz panacea of ABS can be achieved, including the benefits of the Salvos model, without resorting to the myopic and irreversible blunder of selling the ownership of the legal profession to mostly remote bean-counters. Why would the giant accounting firms and venture capitalists want to buy law firms in the first place? To make money of course. And how will they do that? Not by the efficiencies proffered up, but by extracting more cash from the public.
Look at the differences between giant law firms and small law firms. Giant law firms charge horrendous fees partly because they have such high overheads to pay and “rainmakers” to feed and water. Clients who go to a small firm are paying only for the lawyer actually doing the work and the modest overhead of the small firm. Clients who go to giant law firms are paying for the lawyer actually doing the work, the far higher overhead of the firm, and the cut taken by the senior partners. That cut is usually in the 33% range of the total fee and is almost entirely non-productive as far as the client is concerned. Clients who would go to a giant ABS would be paying for the lawyer actually doing the work, the overhead of the local office, the overhead of the head office of the ABS, and the dividends and other returns to the capital venturers.
Look at the title insurers in the US. They killed off a hundred thousand independent real estate lawyers with predatory prices and, once they had the market essentially to themselves, jacked up the prices to the fleeced American public to about four times what the lawyers ever charged and let “standards” plummet.
Look at the real estate agency world. A cartel of agencies keeps the commissions at the very high level of 5% (not the fault of the local realtors) in order to commandeer half of it to feed and water the head offices who contribute next to nothing to the transaction. In Scotland, where there is no cartel of large real estate agencies, the commissions are 1.5%. These are the sorts of permanent damages that ABS would be certain to bring about.
Further, many small ABS applicants applied only to add family or staff to the firm revenue split. That is a terrible and insufficient reason to throw away the independence of the legal profession, an independence that took centuries to win. If you want to benefit staff, give them bonuses based on either their performance or the performance of the firm or both. Do not sell them ownership. For Heaven’s sake, how daft do we have to be to permanently and irreversibly harm our independence because some nitwit could not think of bonuses as a means to reward staff? Trust me, the staff receiving the bonus will be delighted.
Several people heavily involved in ABS in England have been quoted in publications as happily predicting astonishing levels of corporate concentration and the loss of small, highly competitive firms. Jeff Wynn, for example, predicts about six firms in all of England, population 60,000,000 – one firm per 10,000,000 people, in his area of practice*. What do you think will happen to prices if that happens? They are content to be candid because ABS has been adopted there and is therefore permanent. The government there will never admit the colossal blunder it made, and so the situation will ever deteriorate.
*Ontario’s population is 15,000,000. Ontario could accommodate only about 2 or 3 firms in Wynn’s model in his practice area. What would happen to prices then?
We listened to five English experts. Their consensus was that, (a) even after two years, there was no evidence to date that the public will ever benefit from ABS in the ways naively claimed, and (b) the main (in the sense of virtually only) “benefit” has been that ABS allows access to outside capital to fund consolidations in the legal market place. What does history teach you about such consolidations? Higher prices, that’s what. Look at your cable bill. I’ll bet it is over $100 a month, and you have to pay for literally hundreds of channels you never watch. Further, Rogers, despite its mammoth profits and desire to pay grown men tens of millions of dollars to play baseball – a child’s game, recently announced a 6.25% increase in your cable bill for 2015, and that in an ongoing era of 1% inflation. Are they able to do this because they are in a highly competitive environment featuring hundreds of competitors or is it because they are in “competition” with essentially one other player (Bell)?
We are also aware that several of the large ABS entities in England have suffered badly and have lost millions and millions of pounds. Of course, the ABS supporters will simply dismiss that as growing pains. The better view is to acknowledge that ABS is not the panacea it is made out to be and to be courageously and far-sightedly firm in our opposition to it.
As far as I am concerned, much of what is driving ABS is the desire by some to be seen to be “doing something” about access to justice while simultaneously doing nothing or virtually nothing about the real barrier to access to justice, the barrier that dwarfs all other real and alleged barriers combined by a factor of 100, namely, the time and cost of litigation. Attack the modest costs of wills, but do nothing about the time and cost of litigation seems to be their mantra.
The real beneficiaries of the ABS are not the public. The real beneficiaries are the giant companies that would buy us up and sew us up, and the big law firms who have those companies as clients. I, too, am tired. I am tired of constantly having to address the downright loony notion that selling out the profession (an exact synonym for ABS) is the way to go. While I wish you well in everything else you do, I am very sorry that you are running for bencher given your support for ABS, and for that reason I very much hope you lose.
We do not need benchers who are, probably unwittingly, panderers for giant business. What we need are benchers who understand that having 10,000 small law firms competing ferociously with one another is far better for the public than having a cartel of 5 to 10 gargantuan, non-lawyer owned firms. We need benchers who want to do something effective about the real barrier to access to justice – the time and cost of litigation. We need benchers who are not dazzled by the shiny new toy with the poisonous inner parts. We need benchers who, perhaps having been initially seduced by what seemed, initially and superficially, to be a good idea, have the courage to change their minds and reject ABS and work toward far, far better solutions.
Benchers are required to govern the profession in the public interest. Engendering anti-competitive cartels and compromising the independence of the legal profession are not in the public interest. Taking a flyer on an irreversible course that is already proving to be mostly harmful, expensive and problem-infused in other jurisdictions is not in the public interest.
Cheers,
Brad
@ Bradley Wright
RE: ” We need benchers who want to do something effective about the real barrier to access to justice – the time and cost of litigation.”
Where are they? Despite endless hand-wringing discourse on access to justice issues – I’ve seen virtually nothing tangible put forward by way of solutions aimed toward reducing the problem of excessive “costs of litigation” largely rooted in the billable hour (articulated in this Slaw posting: Death Knell for the Billable Hour? Bank of Nova Scotia v. Diemer ONCA by John O’Sullivan.
So to the extent that the notion that “selling time” via the billable hour is driving the high cost of litigation – what alternative model do you suggest? Given laypersons don’t set out to buy a lawyers time – what would “value billing” look like? I ask only because your post begs the question.
@ Bradley Wright
To the extent that Kiowlaski’s ABS arguments and your argument regarding the “cost of litigation” are both access to justice issues – does this recent Toronto Sun column offer anything to the discussion? Do any of the current crop of Benchers agree with Shanoff that greedy, nonsensical billing practices are denying public access to legal representation”? Do you?
Lawyers billing badly
Greedy, nonsensical practices denying public access to legal representation, justice
By Alan Shanoff, Toronto Sun
First posted: Saturday, December 27, 2014
@Bradley Wright
I wonder what the average hourly rate is for the benchers for whom you’re advocating? Talk to the managing partner of any firm about AR, look at the cars in the lawyer-only spots, visit the average partner’s home, then tell me that the profession isn’t motivated by money just like any other industry.
Brad,
When you have some evidence to back up your theories, please present them.
The ABS discussion suffers when emotion and conjecture take the place of evidence.
Best,
Mitch
I think the better question about ABS is “why not”? The main argument against ABS I’ve seen so far is that non-lawyer ownership will lead to erosion of our professional ethics and responsibilities.
I’m still waiting for someone to provide evidence showing that non-lawyer ownership in Australia or England has lead to more incidents of lawyer misconduct or malpractice. I’m not sure why a lawyer with a company-driven mandate to be profitable can do that only at the expense of his/her professionalism. Partners and associates on Bay Street seem to have no problems balancing these tensions today.
So far all I’ve seen on this subject is conjecture.
1. The first duty of a Canadian law society is to solve the unaffordable legal services problem–ABS’s can’t do that because legal advice services cannot be automated, they being the bulk of the problem, not the lack of automation of routine legal services.
2. The cause of the problem is that the method of delivering legal services, i.e., the use of the very outmoded handcraftsman’s method instead of a support services method. For example, no doctor’s office provides all treatments for all patients. Instead, the medical infrastructure is a sophisticated collection of mutually interdependent support services, such as family doctors, specialized doctors, specialized technicians & technical tests, specialized drugs, and hospital services. That is an example of the support services method’s key features: (1) a high degree of specialization within a flexible system of creating new types of specialization as circumstances require; and, (2) greatly scaled-up volumes of production by each specialty so as to take advantage of the economies of scale, i.e., the more produced, the smaller the share of overall costs is born by each unit produced, plus the fixed costs factor whereby many of the costs of making anything do not vary in proportion with the volume produced, again mean “bigger is better.” For example, whether a law firm has 10 lawyers or 100 lawyers, it still needs an adequate law library. The greater the volume of legal services produced, the smaller the share of library costs each service must pay for.
As engineers say, “nothing is as effective at cutting costs as scaling-up.”
But a lawyer’s office provides all legal services to all of its clients with no reliance upon external specialized support services. Therefore it can’t have the cost-efficiency provided by high degrees of specialization and scaled-up volumes of production.
All of large scale competitive manufacturing relies upon the support services. For example, no car manufacturer makes all parts of every car, but instead relies upon the support services that are the special parts companies. They combine a degree of specialization of staff, materials, equipment, and methods of manufacturing, with greatly scaled-up volumes of production, so as to gain the economies of scale that such large volumes provide. And they make millions of each of the parts that they make for the car manufacturers.
The handcraftsman’s method has been abandoned everywhere in the competitive manufacturing of goods and services, except in the legal profession. Therefore the profession’s problem of unaffordable legal services is inevitable. No law firm has the necessary degree of specialization of staff, legal materials used, re-use of previously created work-product, or scaled volumes of production, to be able to cope with rapidly expanding volumes of laws, complexity of laws based upon technology, and the masses of records created by the automating of records by electronic technology–every interaction, communication, and transmission that we have now, produces a record, which could be related to some legal service, and records are now the most frequently used kind of evidence in legal proceedings. Therefore, every legal service takes more time if its required quality is to be maintained. Time has to be paid for. If there isn’t a mechanism whereby cost-efficiency is constantly being improved, the price of legal services must increase. That is what has caused the A2J problem of unaffordable legal services. The handcraftsman’s method is can’t provide a sufficient degree of cost efficiency applied to large volumes of production.
I learned this form of analysis by creating LAO LAW, beginning in July 1979. It is the best legal research unit in Canada now, with a 35-year history of successful innovation and saving Legal Aid Ontario (LAO) millions of dollars by reducing the payout for legal research hours claimed on lawyers’ accounts. By specializing my staff, materials used, and principles of database management, by 1988 we were producing more than 5,000 complete legal opinions for lawyers in private practice who do legal aid cases. That is the way to drive down the cost of litigation. I had created the high degree of specialization and scaled-up volume of production that maximizes cost-efficiency to a degree that no law firm can match. LAO LAW is a highly specialized support service.
And the same strategy can be applied to any type of legal work that lawyers find hard to make render a profit, which is why the special parts companies exist. That difficult work or part is studied, made a specialized type of work, and then produced at high volume.
I wrote an in-depth paper that I sent to CanLII’s Board of Directors recommending that CanLII provide the legal opinion services that LAO LAW provides, at cost, to all lawyers and judges in Canada. It was ignored. I sent it to all LSUC benchers for whom I could find an email address. Again it was ignored.
When I worked at LAO, LSUC’s Legal Aid Committee was the manager. When the LAO LAW system was well developed, I asked to be allowed to sell LAO LAW’s legal opinion serves to lawyers for their non-legal aid cases. It would have made LAO a lot of money as indicated by its great popularity with legal aid lawyers, and it would have improved the service to legal aid lawyers because of the greater volume of production. And it had no competitors, and still doesn’t. That request was quickly refused, without analysis, and without any reason given.
3. A new management structure has to be imposed on LSUC by law, or some of its regulatory powers given to a new agency. A law society that cannot provide legal services that are affordable, has no purpose.
The same refusal to innovate by LSUC has caused the present unaffordable legal services problem. And that same refusal to innovate is what got LSUC removed as the manager of LAO in 1998 by reason of the McCamus Report of 1997, which led to the Legal Aid Services Act, 1988. And a report published in 1997, by Professors of Zemans adn Monahan, also of Osgoode Hall Law School, said the same thing about LSUC–remove it because it won’t innovate for the best future for LAO.
LSUC has an outmoded system of management that is not under sufficient public or political pressure to make perform its duties under s. 4.2 of the Law Society Act, specifically as to: (1) advancing the cause of justice and the rule of law; (2) facilitating access to justice; (3) protecting the public interest; and, (4) acting in a timely, open and efficient manner.
As a result: (1) thousands of people have had their lives severely damaged by lack of legal services provided by lawyers; (2) the courts are clogged by self-represented litigants (SRL’s)–dates have to set way off in the future now; (3) the legal profession is facing a very poor economic future; and, (4) funding LAO better is politically unwise because it means taking more money from taxpayers, the majority of whom can’t afford legal services for themselves.
Taxpayers pay for the justice system which provides employment for judges and lawyers, but those same taxpayers cannot afford lawyer services and must use the courts without lawyers. SRL’s are now appearing in the Courts of Appeal. And meanwhile, Canada’s law societies do nothing about the A2J problem.There is no program in effect, the purpose of which is to solve the problem so as to bring back to lawyers’ offices, all those people who cannot now afford legal services.
4. I fear therefore, that now that LSUC is finally beginning to show some concern about the A2J problem, that it will take the easy way out by approving ABS’s, implying that the ABS proposals are the best available solution to the A2J problem, which will never be true.
5. I agree with those who say the legal profession can do for itself all that ABS proponents say that they can do, and more. ABS’s are based upon retaining the handcraftsman’s method of delivering legal services, therefore they never will be able to solve the unaffordable legal services problem. But that’s not their proponents’ purpose. Concentration of ownership of law firms is, so as to control the market for legal services and then the price of legal serices.
6. See my papers on Slaw: (1) “Legal Advice Services Cannot be Automated by Alternative Business Structures,” October 10, 2014; (2) “CanLII as the solution to the unaffordable legal services problem,” October 24, 2013; (3) “LSUC’s Worrisome ABS Proposals,” November 25, 2014. And on the Access to Justice in Canada blog, “The Failure of Law Societies to Accept Their Duty in Law to Solve the Unaffordable Legal Services Problem,” Part 1 on August 12, 2014, & Part 2 on August 14, 2014. The first 3 pages were a “Thursday Thinkpiece” on Slaw, on Sept 13, 2014.
7. What hasn’t been emphasized sufficiently in the ABS debate is, the independence of the legal profession is essential to the independence of the judiciary–judges make decisions only on what evidence and argument that is provided by lawyers. If that process is improperly interfered with, so is the judicial branch of government. So the independence from ABS control of professionalism and duty to the courts, is a very important factor. Judges will never know how the conglomerate ownership of law firms has affected the independence of the lawyers who appear before them.
8. As to automating routine legal services as ABS proponents allege will greatly cut the costs of legal services, which they won’t: if all lawyers in Canada paid a one-time $200 addition on annual fees, that would produce about $20 million, with which the Federation of Law Societies of Canada could bargain on behalf of all lawyers and their law societies, for the software programs necessary. What with the annual maintenance fees, that would be a very attractive contract for any supplier. It would provide a far more powerful negotiating strength for all of us, than individual law firms negotiating with ABS investors who what to buy up strings of law firms to be franchised. (Whatever the size of the necessary size of the one-time increase in annual fees, that’s the way to get the necessary automating of routine legal services without worry as to loss of independence and ownership whose purpose is to control the market for monopoly power that dictates price.
The practice of law is not a business, and business is not the only agency that can make the practice of law as automated and cost-efficient as necessary.
Critical of OTLA’s position on ABS? That’s absolutely fine.
But before you draw conclusions based on a Law Times article, why not take a look at their official submission to the Law Society:
http://origin.library.constantcontact.com/download/get/file/1114697326977-165/OTLA+Submission+to+LSUC+on+Alternative+Business+Structures.pdf
I believe that a lot of the “ABS” principles can be implemented without the regulatory “ABS” changes. But I am interested in change and curious about what ABS can offer lawyers and the public.
I follow Mitch and other ABS proponents with interest. I have to say, I am disappointed at his dismissal of some of the points raised in this discussion. For example, the point about the impact the title insurers had on real estate practices is an important one to at least consider in looking at the possible consequences of ABS. And not just from a pricing but also from an ethical perspective. Many new/young lawyers who have worked for title insures are very concerned with the ethical issues of certifying title in a commoditized manner. Or they are so inexperienced, they aren’t aware of the ethical issues until it’s too late. So if there aren’t outright issues (by way of on-record disciplinary matters in UK and Australia), rest assured, there are internal struggles and dilemmas inherent to being expected to push documents through a process and close files quickly. I guess that’s the same in large firms and in house roles, but the ABS model surely won’t be spared.
More importantly though, is that I see a real disconnect in the discourse being used. Law societies often use the “access to justice” label as code for “making legal representation cheaper”. Often that falls on the shoulders of solos and small firms, who are already doing their fair share of pro bono and low bono work. And yet no one seriously thinks that making law more corporate (via deregulation) is motivated by anything other than profit margins. I think law societies have a lot to answer for and they should not be let off the hook for their anachronistic rules and support of outdated business models. A huge impact can be made by simply changing the approach to governance.
I am commenting as someone who owns a small, specialized law firm using (what is considered, I guess) a newer business model. We have been operating since 2007. I employ 3 full-time lawyers – all on salary – we charge only flat rates and there are no billable hours or targets. We use a very secure cloud server and a simple practice management system. All 4 of us work together in an open space and have separate rooms for meeting clients. We serve clients all over the world from a smaller centre in eastern Canada, so our overhead and cost of living is lower. We spend almost nothing on marketing but watch our Analytics closely. We don’t use support staff other than a general receptionist. We do top-notch work for predictable prices. We run circles around our competition, but they don’t even notice us.
Todd, I have read it. And it is filled with conjecture and fear-mongering.
The report provides no evidence on increased risk to the public by ABS. It provides no evidence that any so-called “core values” will be eroded with ABS; all of this despite 15 years of ABS experience in Australia.
OTLA raises the already debunked theories of loss of quality of service, professional standards or independence, which are wholly without evidence anywhere in the world.
Because of this lack of evidence, OTLA gets into the silly season.
It relies on the fact that not every ABS is a technological super giant as the basis of disproving that ABS provides innovation or tech to law firms . If OTLA had spent time in Melbourne with Slaters, or in the Wirral with Riverview, as I did, it would see how ABS brings capital, management expertise, good governance and better technology to a firm. This is a big miss by OTLA.
BTW I also spent time speaking with Andrew Grech of Slaters, one-on-one. He is strongly in favour of ABS and the benefits it brings to Slaters clients.
OTLA raises Canadian examples of innovation then suggests that nothing more needs to be done, because a few people have raised capital on their own to fund some new projects. I organize the Legal Innovators Round Table in Toronto; nearly all the legal innovators in this group support ABS, and the advantages that clients, the profession and themselves can gain from it. Several are filing comments to LSUC in support of ABS.
OTLA has also resorted to the silly argument about market consolidation – which can already occur under the current model. There is no ban on personal injury or other law firms buying each other up and consolidating now, so this point makes no sense.
Again emotion and conjecture replace logic and evidence in the OTLA paper.
Oh, and about the access to justice issue?
OTLA and the famed “Harvard Study” (which is a dishonest name for a study that happened to be done by a professor who happened to be at Harvard at the time.) both missed Australian Law Firm of the Year, Salvos Law and the 11,000 pro bono cases it did. That is a pretty big miss if one is suggesting that it spent any time researching the issue of access to justice. This miss calls into question the integrity of the “Harvard Study” and the OTLA paper.
OTLA has also failed to show in its report how Salvos Law could exist under the current model – because it can’t.
All of these make the OTLA paper sadly underwhelming and disappointing.
Such papers add little to the discussion if they rely almost entirely on fear, ignorance and hyperbole.
“When the LAO LAW system was well developed, I asked to be allowed to sell LAO LAW’s legal opinion serves to lawyers for their non-legal aid cases. It would have made LAO a lot of money as indicated by its great popularity with legal aid lawyers, and it would have improved the service to legal aid lawyers because of the greater volume of production. And it had no competitors, and still doesn’t. That request was quickly refused, without analysis, and without any reason given.”
If only could find the capital to fund such an innovative idea… Oh well, I guess well just let LAO decide what ideas have legs and what don’t.
Kudos to Salvos Law; however, there appears to still remain a gap in the provision of legal services primarily to the disadvantaged, this according to the Productivity Commission:
RECOMMENDATION 21.4
To address the more pressing gaps in services, the Australian, State and Territory Governments should provide additional funding for civil legal assistance services in order to:
• better align the means test used by legal aid commissions with that of other measures of disadvantage
• maintain existing frontline services that have a demonstrated benefit to the community
• allow legal assistance providers to offer a greater number of services in areas of law that have not previously attracted government funding.
The Commission estimates the total annual cost of these measures to the Australian, State and Territory Governments will be around $200 million. Where funding is directed to civil legal assistance it should not be diverted to criminal legal assistance.
Access to Justice Arrangements –Productivity Commission — Submitted December 3, 2014
January 2, 2015
So much to respond to, so little space. Of course a lawyer at Slater and Gordon would praise ABS. He is part of a firm that is making a killing, and killing hundreds of smaller firms.
Market consolidation can happen in the current world, except it doesn’t, at least not to a degree that harms the long-term public interest. But such harms are guaranteed to happen in an ABS world. As I mentioned, but Mitch ignored, the English experts were unanimous in saying that, despite two years experience there and the 10+ years of Australia’s experience to draw on, it is still too early to tell whether there will ever be any benefits to the public of the types claimed by the ABS supporters. They were also unanimous in pointing out that the one main “benefit” seen so far is that ABS provides access to outside capital to fund consolidations – the very evil that leads to cartelization and higher prices. Mitch criticizes me for conjecture. He needs to re-read what I wrote, and realize that he is the one swimming in conjecture.
Mitch thinks that 10 – 15 years of experience in Australia is enough to go on. I say it is not. That is just the first burp down there. The next burp will take through to a full generation, 25 – 30 years. It is at that point, if not earlier, that the real cartelization will take place and the real loss of independence will occur. History and human nature tell us that. The US title insurance cartel took a generation to reach the critical mass needed to then kill off the independent real estate bar. The real estate agencies took a generation to consolidate down to the current seven. The Big Accounting firms, more on them below, took decades to evolve to where there are just four of them. And so on, and so on.
I ask again, why would the four giant international accounting firms (just four firms – Deloittes, PwC, E&Y and KPMG – do 98% (by capitalization) of all corporate audits in the World according to the Economist) want to buy law firms in the first place? To do pro bono legal work???? All they will care about is the return on profit to themselves, and they will engender an environment designed to do just that. Someone said that the profit-motive drives big firms. Yes it does, but that will worsen under ABS. It cannot help but worsen when there will then be yet another level of cost to cover, namely, the return to the outside owner. The big firm model is in place to service large and or wealthy corporations and their 1%-member owners and senior staff. Those corporate clients get to deduct their legal costs from their taxes. On that basis, a very significant part of the revenues earned by the partners in the big firms comes from taxpayers, making them, to that extent, not very different from welfare bums. Do we want to expand that model by having thousands of small firms consolidated into giant franchise operations, the only difference being that individual clients for the most part cannot deduct their legal expenses?
Do we want lawyers in the ferociously competitive environment of small firms, who currently only have to charge their clients enough to cover (a) their modest local overheads and(b) their retire-at-75 take-home pay, to suddenly have to charge their clients enough to cover (a) their modest local overheads and (b) their retire-at-75 take-home pay, (c) the return to the lawyers in the head office running the franchise/megafirm, and (d) the return to the non-lawyer outside capital venturers on their investments?
The big firm model suffers from additional, anti-best-interests-of-the-public problems. The lawyer in that model has divided loyalties. One is pleasing the client. The other is pleasing the compensation committee. While this happens in small firms, it happens to a far lesser degree. In my sole practice, I have no one other than the client to whom I owe any loyalty. The client is the only entity I have to please. I have no compensation committee looking over my shoulder at what I am billing.
When I do business transactions, I give my client a fair quote. But if I later learn that a huge firm is on the other side, I call my client and tell them that my quote just doubled. This is due to the phenomenal amount of additional time I am going to have to spend on the file as a result of the demands from the lawyer in the big firm. As every small-firm business lawyer will know, I am not kidding. Of course, the lawyer in the big firm will swear up and down that everything he is insisting on is essential, but we all know that a lot of it really is not essential. But he is used to billing deep-pocketed clients and he has to hit his very high billing targets.
I say let the wealthy corporate world continue to over-pay if that is what they want to do, but do not bring that model down on the heads of the rest of the public.
Btw, as mentioned, only four accounting firms do 98% of all corporate audits by capitalization. Until Arthur Andersen bit the dust, there were five. When AA when under, fully 20% of the accounting cartel went with it, to be absorbed by the remaining four. When Heenan Blaikie went under, 3.3% of the large firms in Ontario were affected. What would you rather have? 20% of the legal profession going under or 3.3%?
Do we want giant swaths of the legal profession to be owned by future versions of Lehmann Brothers, AIG, Bear Stearns, Enron, WorldCom, Arthur Andersen, Principal Trust, GM (kept alive only by the influx of 12 billion dollars of taxpayers’ aid), Royal Scotland Bank, and Tesco (the largest grocery chain in England)? Again according to the Economist, Warren Buffet described Tesco as one of the very worst mistakes of his career. What happened was that Tesco is alleged to have deliberately misstated its fiscal picture for years and the Big Four Accounting Firm Auditor allegedly abetted them. Tesco was an early diver into the English ABS pool. Is that who and what we want the legal profession aligned with and taking orders from? Btw, all four of the Big Four accounting firms are headquartered in the US and have American CEOs. Presumably, the ABS pushers are confident that such owners will have the Canadian public’s best interests uppermost in their hearts.
The Economist goes on to state that the Big Four Accounting firms are often in sometimes criminal trouble with US regulators but are merely fined because closing one of them down would only exacerbate an already non-competitive market. The Big Four also have capitalizations that absolutely dwarf into near insignificance the capitalization of even Canada’s largest law firms. Who do you think is going to call the shots once Deloittes and PwC and E&Y and KPMG own BLG, Blakes, Osler’s, Tory’s, McCarthy’s, McMillan, Gowlings, and a chain or two of formerly independent small firms, etc? If you think it is the lawyers, then you are about as naïve as can be.
I have an idea for the Salvos model. Perhaps Mitch and others can approach the Canadian Salvation Army and other reputable charities to donate to the LPP to fund paid placements of those students in poverty law clinics. About half of the students are in unpaid placements. Think of the good such funding would do, and it would not need ABS.
Turning to the time and cost of litigation, first, the rise in unrepresented litigants has risen in lock-step with the prodigious rise in the number of lawyers per capita (in the last 20 years the number of lawyers has risen 40%, far higher than population growth, due to the failure of the law schools, starting in the early 90s, to ever fail anyone and to their bloating up in size – Ottawa U LS alone has more than doubled in size). This lock-step paradox is counter-intuitive but true nonetheless. The main reason for the paradox is that each lawyer now has too few clients to make a living from and must charge too much per file. This is done by dragging things out when in the old days the lawyers would have told their respective clients not to sweat the small stuff (and that allowed the lawyers to settle earlier and more often and move on to their other files). Now the most minute stuff is sweated. That puts the cost of the average file out of reach for the average potential client. Another reason is that many of the SRLs could afford a lawyer but choose to do it themselves in the mostly mistaken belief that a little internet research and mimicking what they see on TV has prepared them to convince a judge to see it their way.
Another reason is that the litigation process invites the wasting of horrendous amounts of time in having to deal with the many stages between drafting the pleadings and getting to trial. I say eliminate the mandatory mediation stage, eliminate the pre-trial stage, greatly shorten discoveries, make better forced use of offers to settle, and make the lawyers analyse their way to early and reasonable settlements or face the consequences of adverse cost awards imposed by a judge annoyed that the file even got to trial.
While I have not done litigation for a while, I used to do it, ahem, very successfully. Since then, I have been the expert witness in seven cases, twice retained by giant firms, and we have won all seven (touch wood)(they should make keyboards out of wood, don’t you think?). I have also been exposed to or been told about a variety of other cases. In every single case, it was possible to do an analysis early on and very, very reliably predict the outcome before a sensible judge. Not one of those cases needed anywhere near the time they took.
What we need to do is work toward truncating the time wasted in litigation files which, as we well know, constitute by far the biggest barrier to access to justice. That would bring the cost of litigation per file down and make it affordable to far more people, thereby replacing the revenue that barristers fear they would lose by the truncation. Twice as many files done in half the time of current files at half the cost of current files yields the same revenue. Considering that 70% of cases feature SRLs and that it is claimed that a lot of legal needs remain unmet, making litigation files affordable for the general public could even generate more revenue for the profession.
Instead, we stumble around like drunks attacking the modest cost of wills and work assiduously at being bootlicks to big business by offering to sell them our profession when (a) there is literally nothing offered by ABS that cannot be achieved without it, (b) we have the golden opportunity to cherry pick any unexpected benefits that might arise in England or Australia without adopting their blunders, and (c) there is plenty of evidence that ABS does and will cause anti-competitive cartelization and loss of independence over time.
Are we completely daft? Are we that blindly and brainlessly cavalier about the true public interest and even the profession’s long-term interest? I sure hope not. Do those who initially thought ABS was the way to go have the courage to renounce that view? I sure hope so.
Btw, I laughed when I read the criticism of Nick Robinson’s excellent paper on the perils of ABS to the effect that it should not be called a Harvard study because Professor Robinson was merely teaching at Harvard when he wrote it. Not a single point in Professor Robinson’s thoughtful essay, published with no objection from Harvard U, was addressed by the critic.
In sorrowful personal amity with those with contrary views,
Brad
Brad,
Professors need to publish or perish – the paper is his alone. Harvard cannot object to his publication as that would be against the principle of academic freedom.
If I published a paper while at University of Calgary Law School (which I teach at) it would not be referred to as the U of C Study. It would be the Kowalski study.
ABS opponents seem to find some magic in the name “Harvard” as if it gives greater legitimacy to their claims. It’s the Robinson paper – plain and simple. And he missed Salvos Law – which is a pretty big miss when his paper seeks to review access to justice in Australia.
Consolidation is either permitted or not permitted.
Currently it is permitted for law firms in Ontario to be bought up and consolidated without restriction. End of discussion.
You cannot say it is permitted for some firms but not for others.
The profession needs to keep in mind that law is not created to give lawyers jobs. Law is there to protect the social fabric, and clients alone decide which lawyers – or other service providers – are worthy of their business and those that are not.
If you have evidence to suggest that clients are worse off now than they were in 1999 in Australia, please present it.
If you have evidence to suggest that clients are worse off now than they were in 2011 in the UK, please present it.
Regulatory authorities in both country have never stated that clients are now worse off. Nor have they raised the alarm over any consolidation, service levels, loss of professionalism, etc.
Chris Kenney is CEO of the Legal Services Board in the UK. He spoke at a Harvard conference on disruption in legal services 9 months ago. So according to your logic and that of the OTLA, the fact that Harvard is hosting a disruption in legal services conference must mean that Harvard deems ABS to be acceptable.
Kenney said: “The case for some kind of supply-side reform to ensure that social and economic need is met is actually pretty overwhelming,” he said. In addition, there’s no evidence that ethical standards have been lowered or that customer service has suffered, he added. Deregulation needs to happen because unmet need for legal services is still great, he concluded.”
Here is the link to the video: https://www.youtube.com/watch?v=a38QYjDifEQ
Please alert me as to where in the video he stated that ABS was destroying the UK legal system, law firms and lawyers. I can’t seem to find it.
So here you have it, “straight from the horse’s mouth” – not a second-hand extrapolation in some protectionist propaganda put out by the OTLA.
Finally, to state that we need to wait several generations in order to determine if ABS is good or bad is just plain silly.
1) While litigation costs are often prohibitive and an obvious issue in access to justice, litigation often arises only as a result of failure to obtain (sufficient) legal advise in the first case. (contracts that are drafted by the business owner based on a free 15 year old US precedent dealing with different subject matter, etc.)
Those who can’t or choose to risk not affording the solicitor’s costs upfront are likely those who can’t afford the litigator’s costs when things go sour.
2)”Do we want lawyers in the ferociously competitive environment of small firms, who currently only have to charge their clients enough to cover (a) their modest local overheads and(b) their retire-at-75 take-home pay, to suddenly have to charge their clients enough to cover (a) their modest local overheads and (b) their retire-at-75 take-home pay, (c) the return to the lawyers in the head office running the franchise/megafirm, and (d) the return to the non-lawyer outside capital venturers on their investments?”
If the small firm market is so competitive, and clients would have to pay more for a franchise or megafirm, then they would presumably only do so if they feel they are getting a benefit, or if they aren’t aware that they are being charged more. If they are getting a benefit, good for them, and opening the choice up to lawyers and clients seems to be a good thing.
With regard to the accounting example, there are still many independent accountants and accounting firms, offering a wide range of services. No one forces you to go to one of the big 4, its a choice that businesses make, feeling that the reputation benefit of the big 4 is worth the higher costs. If you prohibited non-accountant ownership you could eliminate the big 4 from operating in Canada potentially, but would that benefit consumers of accounting services, or simply reduce their options?
Mitch,
I merely found it funny to criticize Professor Robinson’s essay on the basis of its label, not its contents. The contents remain unaddressed except to say he missed Salvos. We do not know that. He may have considered Salvos as unimportant in the scheme of things, which it is. Certainly, Salvos type benefits can easily be created without selling out the rest of the profession. I repeat, we can meet that public need in ways that do not require selling the legal profession to accounting and insurance companies.
The fact that consolidation among law firms is permitted is certainly not the end of the discussion. What the English experts said is that the main “benefit” of ABS is accessing funds to consolidate, i.e., at rates far greater than would happen without the access to the outside funding. Given the capitalizations of the venturers, the consolidations would occur on an entirely different scale than in the past, and that is the nub of the problem. If two of the biggest 30 firms in Canada merge, we still have 29 of them. With Deloittes and other such behemoths funding the process, you could end up with a mere handful of big firms, similar to what has happened in other industries to the detriment of the public. There are only four Big Accounting companies worldwide. They would see nothing wrong with engendering a legal profession of four giant world-wide firms that they would control. None of the several examples of cartelization that I have given is ever addressed by the ABS pushers. They just plough on repeating their mantra that selling ownership is all good – when it clearly isn’t.
I did not say that consolidation is permitted for some but not for others. I say that cartelization is almost invariably bad for the public.
The five English experts we heard from said that two years’ experience had not produced any evidence that the public will benefit. If the public will not benefit, why would we sell our profession? In fact, Mitch, there have been difficulties in the UK with firms closing, with large companies suffering colossal losses on the stock exchange, losing several high-profile managers who were seduced in, only to leave later, and so on.
I do not know anything about Chris Kenney, except, as CEO of the LSB, he is charged with making the blunder work, and his views are coloured as a result.
I did not say that we have to wait “several” generations to see the ill-effects of ABS. I say that a little over a decade in Aus and two years in the UK are not enough. I said that it would take a generation (which demographers define as 25 years give or take). I say that the current crop of lawyers would carry on as we have to date out of habit and that it would be the next generation, a generation that would know no model other than a cartel controlled by outsiders, that would see the erosion of legal ethics. I say that real estate standards have plummeted where title insurers have taken over. I quoted you previously the words of a former lawyer who, having been put out of business by the title insurance industry and took a job with one of them, said, “We’re now charging four times what lawyers ever did and our service is shit”. The cartelization of real estate delivery, the destruction of the real estate bar, the rise in cost to the victimized public, and the reduction of service to the level of “shit” took a generation.
In future, kindly address my criticisms directly instead of re-writing what I’m saying.
By the way, I will have been a bencher for 20 years this Spring. In just that amount of time, I have seen a marked difference in the big-firm benchers. In 1995, the big-firm benchers had virtually all started in smaller firm because the big firm phenomenon started after they had started their careers. They had all had experience in small environments. Now, virtually all if not all the big-firm benchers join the big firm right out of law school, and never experience small-firm life. It has, and I say this very respectfully and with admiration for them, made a difference in some of the decisions they support and the perspectives they have. So, I feel I know what I am talking about when I say that the practice environment one is raised in does indeed have an impact on how you see the legal world.
Furthermore, with the rise of giant law firms, we have also seen the rise in legal costs to the public. No firms gain more by dragging out litigation than the big firms because they have the clients with the tens and hundreds of millions of dollars of capitalization who can afford, with the help of the taxpayer, to pay the astronomical fees they charge for as long as it takes to take on similar corporations similarly represented, or to squash the little guy (which is why FCT has McCarthy’s on retainer and Stewart has Borden’s on retainer – the given real estate file/title insurance claim is small potatoes but the title insurers make it dead obvious that if you sue them, you will up against a Big Firm. If FCT were forced to hire a local firm of the same size as the firm acting for the plaintiff, the playing field would be level and the litigation would cost less).
Come to think of it, maybe there should be a law that says the plaintiff gets to choose the size of law firm both the plaintiff and the defendant must retain, and that both firms must be the same size within a range. Even large companies would be inclined to hire a small local firm just to keep the costs down. Yes, yes, I know. A plaintiff could hire a giant firm knowing that the defendant would not be able to afford similar.
Anyway, you still have not addressed the points, among others, that (a) we do not need ABS to achieve the claimed benefits of ABS and (b) we can cherry pick any benefits that do arise without having to suffer the disadvantages of cartelization, loss of independence over time, and the erosion of our ethics over time.
Thanks.
Anyone interested might want to read the Consumer Impact Report 2014, online:
Here’s the link for the Consumer Impact Report, 2014: http://www.legalservicesconsumerpanel.org.uk/publications/research_and_reports/
January 2, 2015
James, I agree with your first point. The failure of the public to access prevention lawyers (solicitors) badly hurts them downstream when they have to access cure lawyers (barristers). Part of the problem is that the media, from newspapers to TV Land, only ever babble on about the high cost of court room lawyers. Solicitors get unfairly tarred with that brush to our undying annoyance and to the very real detriment of the public. But the problem is easily addressable. For a mere $90 per member a year, the Law Society could advertise on an on-going basis to the public of the benefits of seeing solicitors early on in the process. That would be far cheaper and carry far more weight with the public than a bunch of self-serving ads placed, at high cost to the individual firm (and passed on to the clients) by ABS behemoths.
It is not, however, the case that the vast, vast majority of the public cannot afford to seek the advice of the solicitor. Instead, it is the case that they choose not to, because they are unaware of the cost-effective benefits of doing so. I have dealt with numerous clients over the years who have chosen not to pay the modest cost of a solicitor’s advice; yet, they think nothing of spending far more on any number of other things. Their annual cable bill is more than the solicitor’s advice. The cost of their cigarettes. The cost of their booze. The cost of the tickets to the professional sports teams. Their cost of the car they really should not have bought (what was wrong with the next cheapest car? Nothing.) This comes down to not knowing just how valuable the modest cost advice of solicitors is. That comes down to the failure of the Law Society over the years to do something about it. Doing so would clearly be in the public interest – the Law Society’s own mandate. What’s more, we could probably get funding from the Law Foundation of Ontario to help pay for it because public education is squarely within the LFO’s mandate. Why there is reluctance at the Law Society to do this is a mystery.
As for your second point about the public only going to franchise lawyers if they perceive a benefit, you miss the point that a heavily-backed franchise gets going, they can and will (as history has repeatedly shown – see the US title insurance predation of the real estate bar) temporarily offer low prices until the independent lawyers are wiped out, at which point they will have the public at their mercy. Do you think the American CEO of an American- headquartered 500 billion dollar conglomerate is going to give two hoots about the best interests of the Canadian individual legal service consumer? Or is he going to worry about his compensation package?
As for your comments about the Big Four accounting firms, yes, there are lots of small accounting firms, but they do less than 2% by capitalization of audits worldwide. They mostly do non-audit work, and any audit work they do is different from the audit work the Big Four do. The point is that, in the field of publicly traded audit work, there are really only four of them that businesses needing large audits can go to. The US and UK governments have identified this as a very serious problem. But comparisons only take us so far. I am not equating the accounting profession with the legal profession for all purposes. So far anyway, the Big Four have not attempted to put the small accounting firms out of business the way the US title insurers did to the real estate bar, but if it happened, what do you think would happen to the fees the public would have to pay for non-audit work?
You say opening up choice to the public is a good thing. Yes it is in an environment where there is no real competition, but solicitors operate in an environment that is ferociously competitive. ABS would be certain to reduce that very competitiveness. Not all competition occurs on a level playing field. When small firms have to go up against a cartel that is willing to take losses for as long as it takes to put the small firms out of business, that is not a level playing field. Such untrammelled “competition” ends up destroying competition and leaving the public far worse off that it was before. That is the promise of ABS, to wit, if not in the early days, then certainly in the longer-term.
By the way, perhaps some supporters of ABS are dreaming that they will be among the lucky beneficiaries of an ABS world. Dream on. The real beneficiaries are already in place. They are the big law firms and the big companies in their client bases. They, not you, are the ones placed to pounce and take advantage of any foolishness on the part of the Law Society to cave into them.
Further, I would never prohibit ownership of accounting firms by non-accountants. Indeed, the Big Four are traded on the stock market. But accounting is not law. Accountants, while important, do not occupy the same position in the health of a free and democratic society that lawyers do. While their ethical demands are high, they are not as high as those of lawyers. They do not enjoy something similar to solicitor-client privilege. They are not officers of the court. And their customers do not bring to them the breath-takingly wide range of issues that our clients bring to us. Accountants do not deal with a seamless web of law – a web that touches virtually every aspect of everybody’s life. They just deal with money, numbers and financial statements.
I come back to these points, points that have not really been credibly challenged.
Under ABS, cartelization is a dead certainty (ABS proponents in other jurisdictions make no bones about it. They gleefully predict it and are self-servingly working toward it and achieving it. Slater and Gordon has already brought about an incredible concentration of firms in their main practice area, and they want to do the same thing to England. It is the last thing we should want here.).
Harm to small firms is a dead certainty (see, for one example, US title insurers predation of the real estate bar).
Harm to the public over time is a dead certainty (ditto).
That loss of independence over time goes hand in hand with loss of ownership is dead obvious (following the money is what humans do; indeed, it is one of the chief reasons that quite a number of ABS supporters support it).
That the claimed benefits can easily be achieved without ABS is dead obvious (so obvious that no elaboration is needed).
That ABS is mostly a smoke-screen to avoid doing anything about the time and cost of litigation is dead obvious to me (even though it is being done without deliberate malice); otherwise, we would be spending these resources on dealing with the real barrier instead of spending them on fake barriers.
When are we going to turn our resources away from the unnecessary ABS hell-hole and toward addressing the barrier that dwarfs all other barriers? Spending our resources on ABS is like sending the entire fire department to dowse a candle in an empty metal pail while ignoring the 100 city blocks ablaze down the road.
Cheers,
Brad
Brad,
You continue to jump to the conclusion that ABS causes damage – you provide no evidence of this.
I’m happy to see that term limits will not permit you to seek re-election. Fear-mongering is the last thing Benchers should be engaging in.
You seem to have secret information about the Robinson report that Salvos Law was intentionally deleted because it was not relevant.
Good gosh is there no limit to your fabrications and propaganda?
ABS was introduced to Oz in 2000 – making it 15 years of experience. Slightly less than your time as Bencher. Yet you seem to float “20 years as Bencher” as some kind of badge of special experience which you do not afford the Australian ABS experience.
You are clearly arguing for the sake of arguing, rather that adding something constructive.
Then you insult the CEO of the LSB in order to further your argument?
This kind of shameful behaviour is unbecoming a Bencher. This is exactly why new blood is needed at the Law Society.
You have lost touch with the profession as it is in 2015.
I wish you well in your retirement.
Mitch
January 2, 2015
Mitch, you say that “The profession needs to keep in mind that law is not created to give lawyers jobs. Law is there to protect the social fabric, and clients alone decide which lawyers – or other service providers – are worthy of their business and those that are not.”
I agree. But for hundreds of years, society and governments have wisely decided that lawyers are the best people to get legal advice from. And when it is shown that lawyers are not the best people, changes have been made. For example, paralegals should be and are empowered to deliver legal services that are not economical to the public for lawyers to deliver. The public can go to other service providers (non-lawyers) if they really believe they will get better legal advice from non-lawyers. Funnily enough, they rarely do get better legal advice from non-lawyers. The law has always allowed the public to do their own wills and buy kits. Turns out, those are the most lucrative estates files I ever get. They would have been vastly better off to have paid me the pittance for a well-drafted will than the higher cost of my having to deal with a bad will.
No case whatsoever has been made that small-firm solicitor services can be delivered to the public better and cheaper than solicitors in Ontario do now. In jurisdictions that have replaced solicitors in areas of the law (US real estate), the costs and harms to the public have soared and services have plummeted. Furthermore, despite the outrageous cost of most litigation, no case has ever been made that non-barristers provide better services except at the bottom end of issues like traffic tickets and some narrow-specialty tribunals. The real issue, the issue that ABS supporters and others do not seem to want to deal with, is how do we make the cost of accessing barristers affordable? ABS will not do it or at least is not needed to do it. As I have dealt with some of the ways to reduce the cost of accessing barristers elsewhere, I will not repeat them here.
You have to be careful about how far you open the door to non-lawyers delivering legal services. If you open it too far, greater harm occurs than if the door were ajar only enough to maintain balance. If you allow anti-competitive behemoths who are willing to predate competitive lawyers into extinction through temporary loss-leadering, then you have created an unkillable monster.
Some ABS supporters say goofy things like ‘the delivery of legal services should be open to all competition’. They don’t really mean it; they just want to open it up to the big company clients of the big law firms. If they did mean it, it would mean letting anyone at all hang out a shingle claiming to be a legal services provider. We know how that has worked whenever it has been tried. Why not let anyone claim to be a doctor or an engineer. Would you allow your child to be operated on by such an “anyone”? Would you drive over a bridge built by that “anyone”? So, yes, education and other standards are required. And those standards are best protected by the total, hard-won and uncompromised independence of the legal profession. ABS would compromise that, make no mistake.
As you say, law is there to protect the social fabric, and I say that lawyers are the best tailors. If all you need is a button sewn on, sure, go to the tailor equivalent of a non-lawyer. But if you do not want the entire suit to spring off you in all directions in the middle of the subway, go to the tailor equivalent of a lawyer. If you have your fabric tailored properly in the first place, it will clothe you without incident forever. If you do not go to a trained tailor or sew it yourself, you will need a tailor to come down to the subway and try to apply the suit back on you to the schadenfreude of the other commuters. That will be far more costly and painful than having a proper suit made in the first place. Good heavens. You might have to take that suit* to court where it will cost you, on average, the average Canadian’s annual income to deal with!!
*A pun as vile as that deserves to bring this post to a clothes.
Cheers,
Brad
Mitch,
Sigh. I did not say that I have secret information. Sheesh. All I said was that we do not know why Prof Robinson made no mention of Salvos. The point you will not address is that we do not need ABS to achieve the benefits of Salvos.
ABS may have been introduced in 2000 but it took a while to get going. The real experience is a more recent development. But it has produced the very kind of consolidation in Slater and Gordon’s main practice area that I have been warning about. That is not a fabrication. That is reality. And the quotes from ABS types in the UK candidly predicting more consolidation (that they have helped bring about!) are not fabrications; they are attributed quotes in respected legal trade journals.
It is not an insult merely to observe that the CEO of the LSB has an interest in having a perspective favouring ABS. The government has passed it. It is irreversible. He is a government appointee. There is nothing in it for him to oppose ABS in any way. Would he keep his job if he relentlessly criticized the UK government for adopting ABS and did everything in his power to undo it?
I can assure you I am not out of touch with practice in 2015. I am heavily computerized and so efficient that, at the request of others, I have led adoptions of efficiencies in Ottawa some of which have been copied by other counties in Ontario. No, I do not have a website*, but that is because I am swamped with work from a 32-year build-up of happy returning clients and their referrals.
*I will get one as a courtesy to clients who want to see a map of my new office location. I will also put various essays on Whither the Legal Profession on it so that readers can see that thousands of independent lawyer-owned firms in fact, in fact Mitch, deliver far better and far more cost-effective legal services than other models, that we are wide open to any beneficial innovations as we always have been, that the real barrier is litigation, and that they, my precious clients to whom I devote my undivided loyalty, should take preventative steps to avoid barristers like the plague, at least until they become affordable. Btw, the system and costs are not all the barristers’ fault. Good barristers, and they are legion, do a tremendously good job for their clients and they do try to contain costs. They are the barristers I refer my clients to when they need them.
But at the same time, I have not been duped by the shiny new, time-bomb toy of ABS.
My reference to 20 years as a bencher was simply to illustrate that I have seen a generational shift in attitudes caused by nothing other than a narrowing of the career-long practice environment of a certain type of bencher (I do not fault them for their human nature) – similar to the generational shift that I confidently predict will happen to lawyers whose practice environment would feature behemoth, non-lawyer owners. You make the conjecture that it won’t happen. I say it will and give a concrete example of it having happened in another but still applicable context, and I say the role of the legal profession in society is too precious to jeopardize based on a conjecture that you happen to prefer.
There has always been plenty of new blood in Convocation. Even in the worst turnovers, we still had over 30% new benchers (usually closer to 40 or 50%), meaning that, even in the slowest turnover times, we would have a 60% renewal in the span of two elections, i.e., four years and one day. Any management consultant would tell you that that is an excellent rate of renewal for any organization. But continuity and institutional memory are also valuable. During our wretched governance reform process, the pushers of governance reform constantly trumpeted the need for renewal, but none of them had done the analysis. When I did the analysis proving that we had, even at the worst of times, objectively excellent renewal, the pushers never wavered, but continued to spout the nonsense that we needed reform to address a non-existent renewal problem. Also without analysis, they claimed that there were too many life benchers. I did the analysis. Only 10% of newly elected benchers ever made it to life bencher status, and most of them did not attend Convocation. Yet, over the years, the life benchers proved to be an utter God-send. They often saved Convocation from silly blunders, and they filled out discipline panels by bringing over 16 years’ experience on hearing panels to the proceedings. The reformers, in their zeal to pass reforms, any reforms, to be seen to have done something, threw out the baby with the bath water. We have had to replace the work formerly done by life benchers mostly for free with outsiders who cost the Law Society (our members) quite a bit of money.
The real reason for our governance reforms was to make it easier for downtown Toronto lawyers to manage their bencher ambitions. That’s it. The other reasons advanced were just smoke. Convocation is not what it was, and I say that with great respect to the benchers elected since the reforms were implemented. At one point, except for one minor recommendation, Convocation, post-reforms, did not turn down a committee recommendation in four years. That may still be the case. The old Convocation often sent work back. I can assure you the routine rubber-stamping of virtually all committee recommendations since reform is not because benchers are smarter now than then. They are not dumber either, but the culture has changed, and not for the better.
I am signing off for today.
Brad
January 7, 2015
“Helped to lead” that is to say regarding the Ottawa efficiencies. There were several of us on the Ottawa committee. Btw, a provincial committee (which I was also on) later tried to roll out the Ottawa efficiencies across Ontario. The stumbling block was Toronto. That’s too bad because if every county and district adopted the Ottawa protocols (proven splendidly effective over 15 years), then, based on Ministry statistics, we would save 3,000,000 pieces of paper per year and all the toner that goes with them. If would be much better off if we could spend our time improving the practice instead of fighting the nonsense of ABS.
Mitch, you keep asking for proof of harm. Cartelization is harm, and it is happening right now, as gleefully and candidly admitted by early, palm-rubbing beneficiaries of Aussie and UK societal blunders. And it can only worsen (in fact, said early beneficiaries candidly admit that they both expect and are working toward worsening the cartelization) in an ABS world where multi-billion dollar companies increasingly take over the delivery of legal services. The harm is right there, looming over you. You ignore it to the detriment of both the legal profession and the public. I do not fault anyone who was initially seduced by ABS. It sounded okay. It sounded sexy. It looked like something one could later brag about for being in the vanguard. But it is poison. It is immeasurably harmful. It is like communism once was – a superficially appealing philosophy that garnered a number of adherents even in the West, but which, as history has proven, engenders and spreads harm like an ebola virus sneezed into a classroom. You may not appreciate it but I am trying to prevent you and the other misguided sponsors of this evil from later garnering for yourselves the scorn of history.
2015 is the 800th anniversary of Magna Carta. If we adopt ABS, the document evidencing the adoption will do down in history as Puny Carta, Cowardly Carta, Myopic Carta, Lazy Carta, Bootlicks to Big Business Carta, take your pick.
The reasons offered in support of ABS give real meaning to the last two letters of ABS.
Brad
Mr. Wright
“Do we want giant swaths of the legal profession to be owned by future versions of Lehmann Brothers, AIG, Bear Stearns, Enron, WorldCom, Arthur Andersen, Principal Trust, GM (kept alive only by the influx of 12 billion dollars of taxpayers’ aid), Royal Scotland Bank, and Tesco (the largest grocery chain in England)?”
Really, is that supposed to be a serious argument? Let’s damn ABS because out of the few millions sucessful businesses in the world, you can name 10 that failed (setting aside for a second that at least one of those examples, GM, was a world leading car company for the better part of a century before it failed). Gee, have no law firms under the existing regime every failed, or disappeared with the client’s money – it seems to me that there have been a number of instances of just that on the LSUC’s plate right now. By that logic (such as it is), the lengthy list of disciplinary complaints against lawyers under the existing structure (often, as in the case of trust fund infractions, a function of the current ownership model,), is a compelling case for ABS.
“2015 is the 800th anniversary of Magna Carta. If we adopt ABS, the document evidencing the adoption will do down in history as Puny Carta, Cowardly Carta, Myopic Carta, Lazy Carta, Bootlicks to Big Business Carta, take your pick”
Now, you’re just embarassing yourself. Good lord , are you really a bencher of the LSUC? I’d be embarassed to hear these sort of silly rhetorical argument from some know-nothing undergrad. I AM embarassed to hear a representative of my profession making them.
Many risks of abuse have been identified in the comments above by those against ABS however it is naïve to think that there aren’t equally harmful abuses, issues and concerns existing within the current system. Look no further than the many lawyers who readily admit that their friends and family couldn’t possibly afford their fees, the person I know who, to their lawyer’s knowledge, spent more per month on legal fees than they made, the ongoing firm consolidations, or the dairy farmer that was found to have been grossly overcharged for a routine receivership (Nova Scotia v Deimer, 2014 ONCA 851).
More importantly, this ABS debate deflects from the main issue – clients aren’t happy.
Deimer is an excellent example of one of the reasons why: fee churning. While I am not aware of any firm that has a policy of churning, there are clients at pretty much every firm who have experienced it. Usually not intentional and generally due to the lawyer and client not working together to scope, plan and budget at the outset of the matter.
Despite the best of intentions, many lawyers focus on the effort they have put in as opposed to the cost and value of what the client received. This is flawed. Lawyers should be focused on figuring out what the client wants and then addressing the client’s needs in a manner that generates a fee that the client is comfortable paying. This doesn’t mean the services have to be cheap. It means they have to be proportionate to the benefit received. More fundamentally than a profession, law is a service that clients pay for (lawyers need to eat too). No clients, no profession.
What I know from my business is that clients aren’t happy with the lack of fee transparency and certainty associated with legal services and they want things to change. Lawyers want change too. After all, who wants to work all weekend and then get in a bun fight over the bill?
There are a number of trends currently facing the legal profession (increased client sophistication, fee pressures, stagnant growth, the number of lawyers growing at a faster rate than the general population, succession planning needs and an increased emphasis on non-traditional skills – see the CBA Futures Report for a more fulsome list) that make the traditional practice model difficult (impossible?) to sustain.
While I don’t think ABS is the magic bullet, it is one of many options that the profession should be actively pursuing to get ahead of these trends. With the ABS risks so thoroughly identified by those against ABS, the proponents for ABS should be well armed to plan and introduce an ABS framework that anticipates and mitigates those risks. An essential step in project and change management.
Whether it be ABS, AFA’s or some other approach, change is desperately needed in order for the legal profession to better align itself to serving the needs of clients (from commercial to constitutional) while providing lawyers with a reasonable living. There are no easy answers. Change is difficult. Change is also inevitable, even if lawyers do nothing, because everything around the profession is rapidly, constantly changing.
Kudos to anyone suggesting and actively pursuing (on a micro or macro scale) tangible solutions or alternatives that address any of the issues facing the profession. Let’s focus our problem solving skills and efforts on how to make the suggestions work versus why to dismiss them entirely.
January 7, 2015
Dear Mr. Smith,
I guess I hit quite a nerve. I am actually a gentle soul in my personal life. I am glad you wrote.
GM may have been successful, but it still failed, catastrophically so. It took 12 billion tax dollars to bail them out. What if it had owned the largest law firm (a much larger law firm than our current crop), and the government had not been in a position to bail GM out with our own money? And the list was a partial list.
Yes, there are some lawyers who misappropriate funds. Most of those lawyers are in small firms, but then most lawyers are in small firms. Part of my point is that when it happens in a large entity, and it does happen in large entities, the damage is far greater. ABS will not eliminate defalcations; it will only make the defalcations that do occur vastly more serious. One trader brought down Barings Bank. One man brought down the financial institution in France (the name escapes me at the moment). In each case, one man out of thousands of employees.
By way of understatement, ABS is a very serious matter. If adopted, it is permanent and irreversible. It is not just a sea-change; it is an all seven oceans change. Never in our history has the LSUC ever contemplated selling any molecule of ownership of the legal profession to non-lawyers, let alone huge swathes of it. Why would we? There is no need. We can achieve all of the supposed benefits of ABS without adopting ABS. It took the British hundreds of years to establish the independence of the legal profession. Why would we toss that aside in the span of one or two generations for any reason?
Those opposed to ABS are told that our objections are based on suppositions and conjecture, that we are behind the times, that all will be well. Trouble is, if ABS turns out to have been a mistake, we will be stuck with it for all time. It is really the supporters who are engaged in conjecture. They say we have ten years’ experience, mostly in Australia, with it. I say we have several centuries’ experience without it. The only reason we are even contemplating it is because we have “to do something” about access to justice. There is plenty we could do to enhance access to justice, but ABS is not even in the conversation if we are truly serious about addressing the real barriers to access to justice.
And why can’t we sit back and cherry-pick any (surprising, long term) benefits that somehow arise out of ABS in those jurisdictions? We are in the cat-bird seat. Why not take advantage of it? We can have it all – the guaranteed independence of the legal profession, the non-cartelization of our ownership, and whatever tweaking benefit that we cautiously and judiciously import. Why not do that?
ABS partly came about in Australia because they had a bad discipline system and the government stepped in to make changes. As so often happens, the changes went too far. In England, it was because the law society was seen as having forgotten its role as advocate for the public and having preferred its role as advocate for the profession. In Ontario, the first role is performed by the LSUC, and the second by the CBA. We already have a salutary dichotomy. In England, to address a problem they had but we do not have, the government stepped in to make changes, and again went too far. We have neither the Australian nor the English problem in Ontario, so we do not need their fix. Note that, even in Canada, the CBA can misapprehend what is good for the profession. A faction in the CBA supports ABS, but others do not.
I say that ABS will lead to anti-competitive corporate concentration – cartelization. That is already happening. It is candidly admitted by people in the, shall we say, vanguard of ABS in the UK. Quality Solicitors swallowed up 400 small firms but did not appreciably increase the amount of solicitors’ work that is done. They just moved the work from independent lawyers into the maw of a corporate Godzilla. In Australia, the cartelization is apparent to see when a firm like Slater and Gordon can balloon up to a huge, one firm, market share. Perhaps cartelization will not result in immediate harm to the public, but it is sure to in the longer term. I provide examples. One is the title insurance industry in the US that essentially took over conveyancing from lawyers, driving up the cost to the American public. Another is the real estate agency world that still drives a commission market of 5% compared to 1.5% in non-cartelized Scotland. Another is our cablevision market. It has so few competitors that Rogers has no problem increasing their rate this year by 6+% in an era of 1% inflation. No-one addresses those examples. Instead, we are told that cartelization or its ill effects will not happen in the legal services market. Why would it not, I ask? No reply. I ask why do we not listen to the English ABS types who happily admit it is happening and who are happily working to bring about more of it? No reply.
I listed an incomplete list of giant corporations that have gone under. When a lawyer in a small firm goes bad, it is a manageable problem. Even when, once a generation or more, a firm like Heenan Blaikie implodes, it is still manageable (and in their case there was no defalcation – they imploded for other reasons). But even Canada’s largest law firms are pipsqueaks compared to the companies that would buy them, and if one of those companies goes under, the fallout will be far more serious and damaging.
Part of the stability and success of the legal profession is our non-reliance on a handful of giant entities. Yes, we have 30 large firms (not a bad number considering the entire Ontario legal market is the size of Los Angeles’s), but the overwhelming majority of firms consist of 1 to 5 lawyers, and if some of them close for bad reasons (as opposed to a sole practitioner simply retiring), then the fallout is nothing by comparison. I point out that until Arthur Andersen died, there were five major accounting firms. Five were too few, now there are only four. The Economist points out that four is so few that even when one of them engages in highly questionable, even criminal, behaviour, the government cannot afford the fall-out of shutting them down or to take them to court beyond fining them amounts that, for them, are relative pittances.
My own accountant says that we would have to be nuts to let the Big Four accounting firms own law firms. So does my dentist. So do lots and lots of people who need the services of lawyers.
Small entities equal small problems. Big entities equal big problems. Big entities equal inevitable cartelization. Cartels routinely lead to anti-competitive behaviour. Please address those issues.
I would bet you that the total cost of the higher costs of legal services brought about by cartelization plus the costs of dealing with giant firm financial defalcations would dwarf the
total cost of the small firm misappropriations that happen in our non-ABS world. An ABS supporter would say, let’s try ABS and see if you’re right. But when I am later proven right, it would be impossible to unscramble the egg of ABS. That is not a risk we should impose on the public just because some people want to put their spouses on the firm’s revenue distribution list.
I also point out that we can reward our non-lawyer staff with bonuses based on their own performance or that of the firm or both, and that we do not need to make them owners to do so. No-one addresses that point.
I say that outside ownership will lead inevitably to a lowering of our ethics, if not in the current generation who will carry on out of habit, then in the next generation when that generation grows up knowing no other system. I give examples of generational changes due to changed environments. No-one addresses that. They just hope that it won’t happen (but human nature and experience say that it will). Further, by the time the change were to become manifest, ABS would be so entrenched as to be utterly immoveable. ABS supporters don’t want to address that. If ABS turns out to be a mistake, it can never be corrected. No government is going to force Deloittes, PcW, E&Y or KPMG to sell off their giant law firms after they have spent a ton of money acquiring them. They will only sell them off if they turn out to be bad investments. How is that good for the legal profession and the public?
If we are beholden to non-lawyer owners, how can we withstand attacks from those who wish to deprive us of our part privilege and part right of self-governance and say with a straight face that our only loyalty is to our clients? That we are wholly independent of any considerations other than those of the clients, the courts, the overhead of one’s own law firm, and the integrity of the profession? We simply cannot, at least not over time. People forget that lawyers are just about the only group who must, by law, act only in the best interests of their clients, not in our own interests, and that, by law, publically traded corporations (the ones we are mostly talking about) must act in the best interests of their shareholders. When the interests of the shareholders of the corporate owner and the interests of the lawyers’ clients diverge as they surely frequently must, what then? Why would we compromise our role in society in that fashion? ABS supporters say that we will put in rules to prevent the paymasters from imposing their duty to their shareholders on us, and that they will buy law firms knowing that up front. Piffle. Money is too powerful.
Many people think the bank is their friend. Hardly. As Walter Gordon said, the bank is not your buddy. The bank is in business for the bank, quite properly I might add, not the client. Do we want banks to take from small firm lawyers the responsibility for drafting wills? The banks will loss-leader the will (a “loss” of $200) in exchange for being named estate trustee (a gain of 5% of the value of the estate – $5,000 for every hundred thousand). Is the public better off in that scenario? Definitely not.
Are you aware that bank staff are given targets to hit and bonuses for hitting them for such things as selling their lousy mortgage life insurance, possibly the worst life insurance “deal” out there? Do you not realize that bank staff would also be given incentives for the number of wills customers they talk into naming the bank as estate trustee? We lawyers typically agree to serve as estate trustee only as a last resort, and even then, we do not get an immediate bonus if the client does name us. We have to outlive the client before we would earn a dime out of doing any estate trustee work.
My wills are well-drafted, and almost all of them feature trusted family members as estate trustees. Often the family member does not even charge, or they charge far less than the 5%. Even if they do charge the full 5% (and they have to earn it), at least the money is circulating in the deceased’s family, and not goosing the bottom line of a bank that is already worth 50 to 90 billion dollars.
Returning to giant entities owning legal service delivery, the UK has had it only for two years. In that time, Quindells, an early ABS, has seen its formerly large market value plummet precipitously, Co-op has been bleeding star directors, Tesco has been described by Warren Buffet as a huge mistake of an investment. How is that good for public confidence in the profession? Experts from the UK say that the main benefit to be discerned so far is that ABS allows access to capital to fund consolidations in the legal marketplace (!) and that it is still too early to tell whether the public will ever see the benefits claimed. No-one addresses that.
A Harvard professor writes a thoughtful paper warning of the issues that arise under ABS. The content of his paper is unaddressed; instead the criticism that is levelled is that his paper should not be called a Harvard study. The ABA has rejected ABS. No-one addresses why. Various Canadian legal groups have come out against ABS but the criticism levelled against them is that they are fear-mongers. Why? For wanting to protect the public interest against a legal services environment that will feature yet another level of expensive overhead to deal with? Owners who will be motivated by a corporate bottom line far more than most law firms are? Sure, big law firms are highly profit motivated, and they work their associates and junior partners to the bone (most of the senior partners continue to work hard too, but, truth be told, some do not – they don’t have to, and good for them). I know a lawyer who worked for a giant law firm in New York who worked six days a week on four hours sleep a night to meet the crushing billing targets imposed on him before he finally burned out or wised up and returned to Toronto. But that, even in Toronto, is mainly the culture of big firms. Those of us in small firms just do the work that comes in (it still involves long hours), pay our modest overheads, and take home the rest. Our clients hugely benefit from the fact that we do not have to cover multiple overheads (remote head offices, dividends to venture capitalists). We only have to please our clients, whom we treat as the life-blood they are; we do not have to please a compensation committee made up of senior lawyers many of whom do not even know the faces to the names of many of their associates.
There is legal work that is best handled in a big firm. We need them. Good for the big firm model. It works for them and their clients, most of whom are large companies who can write off every dime of the legal bill. But that model does not work for the vast majority of individual clients, so why would we want to bring in a corporate model to serve them? Such a model will only drive up prices to them. Address that. Address how it can possibly benefit the average individual client when, instead of dealing with a lawyer whose entire loyalty is to him or her, they will be forced to deal with a lawyer working in one of a handful of giant franchise operations whose loyalty is divided between the client and the compensation committee? and whose mandate is to hit a billing target set by a committee in another city?
I dislike billing targets. It is one reason I have not accepted invitations to join large firms in Ottawa. Billing targets distort how you handle the file. Too often, hitting the target becomes the most important consideration, not the best interest of the client. The vast majority of individual members of the public are better off with 10,000 small independent law firms than they will ever be in a system that features 7 to 10 behemoths (see the real estate agency cartel) or even just 4 behemoths (see the US title insurance industry cartel). Address that.
History contains many examples of changes fought by many people who were later proven wrong. But history is also littered with examples of people who fought changes and were later proven right to have fought them. ABS is of the latter type.
Prohibition, the Volstead Act, seemed like a good idea to a lot of bright, highly respected and influential people at the time. The sponsor of the Act said that ever repealing the Act was as likely as a hummingbird hauling an elephant to Mars. (He was an inspired metaphorician but a lousy prognosticator.) And how did that Act turn out? It created out of nothing organized crime, which plagues us to this day even though the unrepealable Volstead Act lasted what? ten years? Have we learned from the mistake of prohibition? The illegal drug trade screams that we have not, although that may now be, slowly and decades late, changing. Illegal drug use is an illness and should be treated as such. We would have far fewer deaths and burglaries as a result.
I say any document that would bring ABS into Ontario would a terrible document and the saddest moment in the history of the Law Society of Upper Canada. I call it lazy because we can address the problems of access to justice far more effectively if we apply our talents, energies and wisdom to doing so. I call it puny because it would start the undoing of centuries of hard-won, wholly uncompromised independence. I call it myopic because it would fail to address generational shifts in attitudes. I call it cowardly because I am fed up to my teeth having to fight it when there so many better things that I and my fellow benchers could be spending our time on. Maybe ‘cowardly’ was a bit strong, but there we are. ‘Bootlicks to big business’ was just as bad, but it is deeply disappointing, to put it mildly, to have a non-real estate lawyer say that real estate lawyers are ‘mere technicians’, to have the cost of wills (!) repeatedly used as an example of a barrier to access to justice when the litigator saying it has nothing at all to say about the ruinously high cost of litigation, to have the Law Society spend all this time and effort on ABS while spending comparatively little time on investigating how to realistically reduce the cost of litigation. But I can say and mean it that such words as cowardly and bootlicks raise dander not discourse.
Note that we are not doing nothing about access to justice. We are looking at ways to help better educate the public, to instill in law students a greater sense of altruism, and to assist in evolving better ways for our First Nations people to resolve disputes outside the court system. I welcome all these worthwhile initiatives. The first is helpful and easily doable, the second is nice but will not have much of an impact in the real world, and the third is dear to my heart. But they do not touch on the issue that dwarfs all other issues, namely, the cost of litigation for the vast majority of litigants. As for altruism in our students, that will last right up until they have to (a) start paying their $70,000 student loans, and (b) start billing enough to meet the targets imposed on them, directly or indirectly, by the non-lawyer speculators.
The obvious real beneficiaries are the giant entities that would swallow up the wide swathes of the legal profession. Why would they bother unless they could make a pile of money at it? And who will supply that money? The public of course.
Why is US health care so incredibly expensive? Could it have something to do with the fact that the primary drivers are the huge HMOs? The CEOs of the HMOs make a lot more than the vast majority of the doctors.
And you should know that, with a mere two exceptions out of the 140 or so benchers I have had the privilege to serve with, I hold my fellow benchers in the highest esteem. They are a truly great group to know and hobnob with, and the last 20 years have been the best 20 years of my life partly because of the friendships I have made with so many of them and the work we have done together. Even benchers with whom I have strongly disagreed on some policy matters remain among the lawyers to whom I would refer my precious clients. I have encouraged numerous good people to run for bencher over the years, including ones with whom I would then be in a kind of competition with come election time, because (a) I thought they could make a fine contribution and (b) I thought they would benefit personally from it. It is a great thing to do.
But I do not want these great people, my friends and colleagues, to go down in history as the benchers who brought the ABS virus to Ontario. I want them to be remembered as the benchers:
who stood up to the siren song of big money,
who, in some cases, are able to say that they were initially intrigued by ABS but, based on more information and time to ruminate, are now opposed,
who looked far enough into the future and applied common knowledge of human nature and the power of money to see the dangers,
who put the long-term interest of the public ahead of short-term quicky fixes to non-problems,
who set up effective committees to streamline and improve how real estate law is conducted (it would not take much as we are highly efficient already given how ferociously competitive real estate law is),
who set up effective committees to work with the government to streamline the litigation process so that the time involved was greatly truncated, saving the clients and the government immeasurable amounts of money, and saving the clients immeasurable amounts of family stress and drops in workplace productivity caused by suffering through the three-year litigation nightmare,
who, as a result of the streamlining, made litigation services affordable so that great numbers of heretofore self-represented litigants could afford the services of highly trained legal dispute resolution advisors each of whom had enough clients so that they were not compelled to bring stupid cases or drag out both good and stupid cases just to make a living,
who worked to reduce the reliance on billing targets,
etc. etc. etc.
Will you help me work toward some or all of those goals?
Btw, flat fees are trumpeted as a way of reducing costs to the public. Lawyers who do real estate, wills, powers of attorneys, and small business incorporations, have been doing 99% of that work on a flat fee basis for decades. It is not new to us.
Unfortunately, flat fees in litigation are quite problematic. What happens when one litigant has deep pockets and the other does not? The lawyer acting for the poorer client is run out of the flat fee and thereafter either has to work for nothing (and human nature dictates that the lawyer’s desire to work on the file will drop), convince his client to take a poor settlement, or require another flat fee. Often the flat fees are highly qualified, giving the lawyer various ways to require yet more retainer money when the initial fee is close to being used up. What is an hourly rate anyway? It is a flat fee for an hour’s worth of advice and work. Flat fees are too often just a gimmick. Better to eliminate litigation stages to reduce the scope for billing skullduggery.
I do almost no work on an hourly billing basis, but that is due to the nature of a small firm solicitor practice. Almost all my files have predictable beginnings and ends, except for a few unexpectedly onerous real estate deals. And even on those, my fee rises only by one (usually) to a few (rarely) hundred dollars, not by the thousands and tens of thousands by which litigation fees rise if the litigation file proves to be more time-consuming than originally thought. Litigation is far more unpredictable, especially if the lawyer on the other side is a lawyer who is starving and desperate or has a whopping billing target to hit.
Given the pressures of the system, it is amazing that there are still so many terrific barristers out there who truly do great work for their clients and who truly do try to contain costs. But, thanks to the incredible intake and output rates of the law schools, that is changing for the worse. As we approach the number of lawyers per capita that exists in the US, we will approach their disaster of a litigation system. We are not better people than Americans. We have simply benefitted from a better system – a system that many people are trying to harm. Of course they do not realize they are harming it – they are good people convinced they are doing the right thing – but the proof is in the American pudding. We have been given examples of what not to copy. Sometimes we have copied errors anyway; sometimes not. Let us please, please, please not copy the Blunder of the Century – ABS.
There are a lot of Bob Smiths. Which one are you? What is your practice background? If you are in eastern Ontario or Toronto, I would be happy to treat you to lunch.
Regards,
Brad
Brad,
You didn’t touch a nerve, you were simply making statements that were simply silly and unbefitting a bencher of the Law Society of Upper Canada (or, perhaps, if befitting a bencher of the Law Society of Upper Canada, indicative of desperate need for reform of that institution).
I’m not going to respond to the entirety of your long-winded rant, much of which bears no obvious relationship to the question at issue, but I will address your specific comment about the “Harvard” study. I note that while you cite the “Harvard” study, you don’t appear to have read it all that carefully. More’s the pity.
First, had you read the Harvard study carefully, you wouldn’t be making the claim that ABS leads to cartelization, as the evidence in the Harvard study squarely rejects that claim. It notes that in the UK, even in fields where ABS modelled firms have been most successful (personal injury) there are 102 ABS modelled firms in that sector, and they only account for a third of the market share. I don’t know what you think a “cartel” is, but an industry where over 100 players account for a third of the market is not a “cartel” is any objective sense of the word.
Likewise, the Harvard study’s review of the longer-term Australian experience does not support the claim of cartelization. Although two of the three largest players in the personal injury space are ABS modelled firms, the the third is not, and those 3 players only account for 40-45% of the market. Moreover, the Harvard study notes that concentation in that sector was occuring prior to the the introduction of ABS (i.e., Slater Gordon had been expanding rapidly prior to becoming listed), and is, in part, a function of the Australian regulatory regime which prohibits contingency fee arrangements and, in some states, limits or prohibits “uplift” fee arrangements, given a competitive edge to firms with deeper capital pools. In addition, the recent prohibition on advertising has given an edge to established “brands” (like Slater Gordon). If anything, the Australian example suggests that better (and less) regulation by legal regulatory bodies might be a better way to address concentration.
Second, far from being a damning critique of ABS (it actually notes that the claims by both proponents and opponents of ABS are overblown – a point you clearly missed), it merely concludes that in one particular respect ABS has not, at least as yet, achieved one of the possible benfits that some of its proponents have claimed- namely increased accessibility for civil litigation services for lower and middle-income legal consumers. That’s a pretty modest conclusion, not a basis for rejecting ABS in its entirety (especially given that, in the case of the UK, ABS has only been in place for a short period of time).
Mind you, it doesn’t surprise me that the Harvard study concludes that ABS hasn’t increased access to lower- or middle-class. The problem with access to justice is a function of the existing regulatory framework, which ABS doesn’t change – namely that legal services must be provided by lawyers who, in order to become lawyers, must be highly skilled people (in order to jump through the hoops to become lawyers), and who typically have high reservation wages (i.e., they don’t need to be lawyers, they could get good jobs in other fields). In other words, the regulatory regime in Canada, as in Australian and the UK, is that legal services have to be provided by expensive service providers – and people wonder why access to justice is an issue? Introducing ABS might change that at the margin (and I think the Axxess law model, if scaled up, would be a good example on the solicitor side) or through the establishment of captive law firms by charitable or community organizations, but isn’t going to make a huge diffences, especially not on the litigation side.
I can think of other means of achieving that goal – including allowing non-lawyers (including paralegals) to provide more “legal” services (and I note, have the LSUC regulate paralegals is a serious problem in that regard). That, admitedly, will require broader regulatory changes, beyond what the law society can do, but anyone seriously concerned about access to justice should be pushing for those changes. I note that in many areas, we’re already seen that sort of change where services which were formally done by lawyers (or articling students) have been outsourced (notably, document review) as a way for driving down costs for clients.
But saying that ABS isn’t a panacea in that respect, isn’t much a criticism of ABS. Just because it isn’t a cure-all doesn’t mean it’s not worth doing. I have no trouble envisioning ABS being able to provide better services at better prices in many areas of the law. Take my practice. I’m a tax lawyer at a big law firm. My clients would be better served if we could provide them with integrated legal and accounting and tax services (or other business related services, such as valuation). There are some things that accountants can do better and cheaper than I can, others that I can do better and cheaper than they can. Certaintly, we would provide our clients with better services if I could go down the hall to talk to them, rather than having to call someone at another firm. This might not neccesarily be better for me personally, but my self-interest shouldn’t be what drives our regulatory regime.
Moreover, that example isn’t merely hypothetical, we see the big accounting firms offering precisely those sorts of integrated tax (and other) services through captive law firms (consider KPMG Law, which provide tax and immigration legal advice to KPMG’s clients). Indeed, ironically, given your fixation over “cartelization”, the current regulatory regime gives the big four accounting firms an advantage in that respect, since only they have the economies of scale sufficient to implement the complicated structures neccesary to comply with the existing regulatory regime while still providing their clients integrated services (the same might be said of the multinational law firms such as Dentons and Norton Rose, providing integrated multi-national legal services). Our current regime makes it easier for big firms to provide the sorts of services that clients want.
All of which is to say, if you would refrain from lengthy rants about AIG, prohibition (?) and the Magna Carta (in the process confirming Mitch’s thesis that many of the anti-ABS arguments are not based on fact) and conducted a real critical examination of the evidence about ABS, the LSUC and the people of Ontario would be much better served.
Melissa,
Thank you for your thoughtful piece. Yes, there are problems in the current delivery of legal services, but they are on the litigation side of the profession. We do not need ABS to deliver low-cost, high-quality conveyancing services. We have that already in a highly competitive market. ABS would worsen that – see the US experience. We do not need ABS to deliver low-cost, well-drafted wills and powers of attorney. We have that already in a highly competitive market. ABS would worsen that market – extrapolate from the US conveyancing market and see how the banks took refinance work from us by giving FCT an unfair subsidy by doing 80% of the work for FCT while refusing to do 80% of the work for us lawyers. I believe they took the refi work from us and made it virtually impossible for us to compete (it is almost impossible to compete against an 80% subsidy) so that they could sell more mortgage life insurance.
The real problem is on the litigation side. That is where we should be focussing our talents and energies. I am sometimes criticized because I want to save the independent small-firm solicitor bar because I am in it. But when I criticize the litigation bar for, so far, not being particularly interested in doing something about the real problem, I am criticized ever more.
I love barristers. Imagine society without them. Near anarchy. Most of them do great work in a very tough environment. The problems in their environment are mainly two-fold. (1) There are too many steps between drafting the pleadings and resolving the dispute. The steps invite delays, they invite spending as much time on the file as the client can bear, but the extra steps do not really lead to better and earlier settlements or court decisions (in a better system, the information leading to the settlement could have been found and applied earlier). (2) With the prodigious increase in the number of students being admitted to the law schools, several of whom have increased in size including Ottawa which more than doubled in size and it was already the second largest school in Ontario, we have seen a great increase in the number of lawyers doing litigation per capita. Each of them now a smaller client base from whom to derive their livings. And the problem is worsening every year. This is not healthy for the public. It is one the main causes, if not the main cause, for the tort morass in the US. (Another major cause is their systemic failure to have at least part of the costs follow the event. Another is the lack of a cap on pain and suffering damages. In Canada, we have been able to temper the harms of those latter two causes.)
I sympathize with barristers who worry that, for example, dropping the mediation and pre-trial stages would cost them too much, but with the tens of thousands of self-represented litigants out there, it should be possible, if we can cut in half the cost of a typical file, for perhaps twice as many people to then be able to retain a lawyer. We would have to calibrate this carefully, but it is doable.
Improving the litigation system, i.e., lowering the cost per file, is something that can be achieved without selling ownership of the profession. Any perceived benefits of ABS are more than offset by the twin harms of loss of independence and cartelization, and in any event are achievable without ABS. Yes, we can do better without it, and we should be applying our talents to doing it.
Yes, the world is changing around us, but we are changing too. The profession is highly computerized and keen for more. The profession is widely accessible through social media, and that is expanding all the time. Without ABS, we have firms in grocery-department stores. They admittedly only want to do “simple“ stuff (they are in for a surprise), but they are there, and they did not need to sell a large equity stake in the firm to do it.
It is said that some clients would like to visit their lawyer and their accountant at the same time. Perhaps, but that is not a good enough reason to allow behemoth accounting firms to own half of a large law firm. They still will not be in the same office space until the two leases expire and at least one of them relocates. If it is that important, let the relocation occur but do not sell the law firm to them. Big Papa Chartered Accountants can take the 45th floor and Big Mama LLP can take the 46th floor, and the lawyers maintain the wholly uncompromised independence. In my business practice (32 years), I have never had a client complain that they had to see me and see the accountant at different times.
Thank you for you contributions.
Brad
Dear Mr. Smith,
In the light of the following day, I accept some of your scathing remarks toward me. In my mind, it was clear the words `puny carta` and so on were referring to the document that would allow ABS (and I used the word `document`), not to the people behind it. They are well-intentioned people in almost every case and in almost every regard. Indeed, one of them is the third most important man in my life and has earned from me by long association quite literally the highest regard of which I am capable. But I accept that the subtlety that was in my mind was not apparent from the words on the page. That is my fault, not yours. My further intent was predicting the judgement of historians as it would apply – to the document – from a perspective 30 or more years from now. Again, the failure to make that clear is my bumbling fault, not yours.
Let us assume that my incompetent writing has left me permanently diminished in your eyes. Consider how easy it was for me to diminish myself in your eyes. All it took was a few sentences in a lifetime of writing. Now consider how easy it can be to diminish the entire legal profession. All it would take is one irreversible bad decision featuring untetherable ripples. I am so worried about that happening that it has disrupted my sleep patterns and even my health for over a year now.
Let me briefly return to the Volstead Act. Every single backer of that Act truly believed they were doing the right thing. They were undeflectably convinced that they were saving their citizens from evil. After the Act passed, they all slept the sleep of the angels. Instead, they delivered their citizens into the seemingly permanent evil of organized crime, still with us today, even though the Act was later repealed.
Governance decisions are fraught with unintended consequences. Something as vital, fragile and precious as the independence of the legal profession simply cannot be risked on an altar of short-term or hoped for benefits.
Feel free to dismiss me as someone capable of producing nitwit sentences. In the scheme of things, I am as inconsequential as an amoeba`s wink. But please do not allow a few sentences to deflect you from a due consideration of the very sound arguments against ABS.
My offer for lunch stands.
Regards,
Brad
According to the OTLA submission to the Law Society, “Representatives of OTLA’s Board has met with Andrew Grech, the managing director of Slater & Gordon, and other lawyers familiar with the
ABS issue in Australia, the UK and the United States.” Here is the shortened URL: http://ow.ly/H0OQq
I believe most OTLA members operate on the no-win, no-fee model. Indeed, the law firms finance disbursements such as medical reports and discovery expenses. This is not pro-bono, but there is no economic barrier per se to clients getting representation. Their argument, as I understand it, is that the onus is on proponents of changes to the current law firm ownership model to demonstrate the public benefit. OTLA is also restricting its submission to that of its membership, i.e. a significant retail sector of the legal services market.
As a board member of Canadian Defence Lawyers (OTLA’s counterpart on the insurance and corporate defence side), I am interested in this issue and do find OTLA’s analysis to be thoughtful.
An elephant in the OTLA room is the existence already of market convergences which, through alliances and marketing, already funnel a large proportion of personal injury claims into a handful of firms based in Toronto. This has not helped the succession planning of the regional and small-town practitioners, whose median age is approaching the standard retirement age and who have traditionally helped local citizens with their MVA and other accident cases. Ontarians need those small, independent firms because there are a lot of people who won’t pick up the phone to call a Toronto or Ottawa lawyer for advice on bringing an action.
From the defence perspective, I wonder how my practice and ethical obligations would be affected in a transition from a partner in an independent law firm to a middle-manager of a firm owned by an insurance company or claims adjusting firm in a vertically-integrated claims market. My knowledge of that labour market is that there is a huge amount of turnover, command management and employee stress.
Lee,
OTLA has asked the wrong question. The test is not to demand that public benefit be shown – which Salvos Legal clearly passes – but to show that a new model (which not everyone will use) demonstrably creates more risk to the public than the current model. And we know all too well that the current model creates risk to the public interest.
Turnover, command manager and employee stress need to be proven. And if they are, the question is, how is that different from current law firm models where suicide is the 3rd leading cause of death and depression is commonplace? Next question is, where does turnover, command manager and employee stress fit with the role of the Law Society under the Law Society of Act?
You may wonder all you want about supposed practice and ethical issues, but until you provide some evidence from the UK and Australia, your wondering does not constructively further the discussion.
Again, you make an emotional argument, rather than one steeped in evidence, logic and reason.
Mitch, with respect, it is you who has got the onus backward. It is not the case that those opposed to ABS have to show that an ABS model demonstrably creates more risk to the public. Rather, it is you, the supporters of ABS, who have to show that an ABS model will demonstrably create less risk to the public. You have to show that changing the current model will not worsen the situation; otherwise, there is no point in making the change.
There are three possible outcomes of adopting ABS. Change for the worse, the status quo, and change for the better. In only one of those three is ABS beneficial. You have to show that the last outcome is virtually guaranteed to happen, because the profession and the public cannot take the risk that the first outcome will happen and because there is no point to this exercise if the middle outcome happens. By status quo, I do not mean the same way of practising as we do now. I mean no net benefit to the public. And in terms of how we practise now, we are in constant flux as it is. We always are. The profession has always happily and willingly adopted and adapted technological and other improvements as needed and as they arise. Teraview and social media are but two examples. We do not need ABS to continue to do that.
If you want to make an irreversible change that can never be undone, that is already showing clear signs of anti-competitive cartelization, that features players who candidly admit, in effect, that further cartelization is exactly what they are continuing to aim for, that currently features several ABS entities going through very rough times (e.g., Quindells), that is guaranteed to harm our professional ethics over time whether you want to believe or not, then it is up to you to demonstrate that the public and the profession will not be harmed. The onus is squarely on you and the other ABS pushers. So far, you have failed. Miserably.
You and I agree that there are problems with delivering certain legal services to the public. I say that they are, overwhelmingly, on the litigation side of the bar. I say that numerous salutary changes can be made to the delivery of litigation services. I say that the benefits can be achieved without selling ownership of the legal profession. You have to show why those benefits cannot be achieved without ABS, and I say you just cannot do it. Frankly, and with respect, I wonder if that is a reason why you do not address the real criticisms levelled against ABS; instead, you accuse us of fear mongering, engaging in conjecture, trying to reverse the onus, and so on. You criticize us for how we label a Harvard professor’s study without addressing the contents of the study, and so on.
If you want to make gargantuan changes to a profession that has served the public extraordinarily well at, except for the cost of litigation, fair cost for decades, then you need to prove that the changes will be beneficial, and to do that you have to overcome numerous examples of where ABS or ABS-like scenarios have done nothing but harm and hose the public (e.g., US title insurers taking conveyancing away from lawyers). So far, you have not even addressed it.
Once again you use the example of Salvos law. I have pointed out to you that the benefits of such an entity can be achieved without resorting to ABS, for example, by having the Salvation Army fund more LPP students in poverty law clinics or by donating to law firms willing to apply the donations to the purposes and at the rates specified by the Sally Ann but where the Sally Ann does not own the firm thereby opening the door to other less altruistic owners dictating bottom line considerations to their sudden employees. You have not responded to any of that.
You say that turnover, command management, and employee stress have to be proven. My understanding is that is no shortage of evidence proving it. People in that field say so and that is more evidence than either you or I have, one way or the other, but since they are there in the trenches, I value what they say.
Furthermore, there are many studies that show employees suffer from stress far more than owners because employees lack the level of control that owners have. Your ABS world would turn thousands of independent owner-lawyers into employees of large companies where remote people in remote head offices will dictate to you what you have to bill to hit their targets, your quality of life and the best interests of the company’s clients be damned. That is a recipe for far more stress, suicide attempts, and hospitalizations than we currently have. How could you be so cruel?
What is the Law Society’s role in this, you ask? The role is to govern the profession in the best interests of the public. Keeping the number of stressed out employees of remote bean counters to a low and manageable number is one way to do that; i.e., keeping the number of independent lawyers as high as possible. The role is to deny non-lawyers and greedy lawyers the opportunity to bring about the anti-competitive cartelization of legal service delivery. The role is to be deaf to the entreaties of people whose desire for ABS is driven by questionable motives, naked profiteering motives, failed arguments, wishful thinking, attempts to reverse the onus because the supporters cannot meet their own, desires to put the spouse and kids on the revenue stream at the cost of the broader tax base (certainly not a move in the public interest, but then none of the ABS moves is), the puzzling refusal to accept that staff can be rewarded with bonuses without selling ownership, and many other silly and illogical arguments. The Law Society needs to be far-sighted, not myopic; anti-cartelization, not pro; ferociously on guard against any incursions and Trojan horses that would damage our ethics and our abilities to deliver low-cost solicitor services; and fervently seeking improvements to the delivery of litigation services to bring down the costs thereof. The Law Society can, indeed must if it is to properly fulfill its mandate, fulfill these roles without allowing the profession to sell itself out to the highest non-lawyer bidders.
Another aspect that I have mentioned before that ABS supporters do not address is (1) the fact that Australia’s legal profession fumbled the handling of discipline cases, causing the government to step in and make changes and (2) the fact that England’s law society fumbled the division of governing in the public interest and advocating in the profession’s interest, causing the government to step in and implement a report prepared by an accountant. In each case and in accordance with both human nature and government tendencies in general, the governments went too far. ABS came about there because of problems we do not have.
If you want another example of governmental over-reaching, read the Sarbanes-Oxley materials. They exceed 7,000 pages. It would have been better if the US government had simply sent the financial institutions the following one-page letter:
Dear Financial Institutions,
We require that you and your management and employees behave in a wholly honest and ethical manner at all times in all your endeavours. We will conduct a sufficient number of audits and other examinations to ensure that you are meeting this requirement. We will punish you severely, including your management, if you are not. Thank you.
Yours sincerely,
The Government of the United States of America.
But I digress.
It is increasingly evident that ABS is a bad and bogus policy. Go ahead, call me, Lee and the many others who have deep and sincere concerns about ABS emotional, but please delay doing so until you have addressed the many, many compelling points that militate against the irreversible blunder of ABS. Explain why we absolutely have to have ABS in order to engender benefits. Explain why these benefits simply cannot under any circumstances be achieved without resorting to ABS.
Regards,
Brad
Brad,
Thank you for sharing your thoughts on my comment. With respect, I strongly disagree that the issues concerning client discontent and access to justice lie within the litigation element of our profession alone.
These issues lie within every aspect of our profession – as evidenced by:
(i) BMO reducing its roster of firms from about 800 to 200 with further reductions planned;
(ii) the clients of seven sister firms hiring me to help them get control over their legal spend and forge stronger and more value based relationships with their firms;
(iii) the many small and mid-sized businesses who hire accountants to do all of their tax and structuring work because it is cheaper than dealing with lawyers;
(iv) firms hiring me to help them figure out how to budget, set and meet client expectations without losing money;
(v) “clients” who never become clients at all as they do their own legal work based on precedents that friends share with them;
(vi) the various forms of outsourcing that are now prevalent (from offices in India to Tory’s office in Halifax);
(vii) clients hiring me to figure out how to increase internal capacity without increasing headcount in order to reduce external spend;
(viii) the success of firms like Conduit, SkyLaw and Cognition (to name a few) who are taking new approaches to “big” and “medium law” work;
(ix) the introduction of full time project managers in many firms; and
(x) the number of lawyers throughout the profession who regularly don’t docket chunks of their time in order to avoid unpleasant fee conversations with their clients.
This list goes on. It is perplexing and distressing that you think this is a litigation issue alone.
Your comments remind me of the feedback a participant relayed to me following one of my sessions – “Everything you covered was right on point and I’m sure my partners in the other departments will benefit. I’m good though.” Really? If lawyers are so confident that they are perfect and above improvement why are more and more clients issuing RFP’s and demanding discounts, write-offs, fixed fees etc.?
In the current “post 2008 reset” environment (which is not a passing fad) clients need more targeted and cost-effective services from their lawyers than ever before. While clients have some responsibility for the relationship, the onus is on the profession, as the service provider, to show the value of their service to their clients and to make the changes necessary to deliver that value at a reasonable, sustainable price for both the lawyer and the client.
Melissa thank you from bringing up the clients. As any who have done focus groups and met with clients of all shapes and sizes know clients are generally and materially unhappy with many aspects of the delivery of legal services. Clients do not believe that there concerns are being addressed and are looking to alternatives. One thing that is really not coming to the fore in the debate I am afraid is the concept of innovation. It cannot seriously be disputed that innovation in our profession has lagged most if not all professions. Unfortunately without innovation I for one fear that a day of reckoning will befall the profession. Innovators that do exist are crying out for regulatory change to allow them to bring such change. All I can say is that if we don’t heed their voices the result is likely to be much less palatable.
The taxi industry has been a highly regulated industry. Licenses have steadily gone up over many years. I suggest that the taxi experience is little different today than it was 50 years ago. Companies have not innovated. Uber comes along with great technology and better service and disrupts thereby dramatically hurting the cab companies and the value of licenses. The cab companies are crying to the regulators about safety and the public interest albeit without a great deal of empirical evidence to suggest there has been a problem. There certainly has not been a lot of examples of all the accidents involving Uber drivers. The public continues to love Uber (and it isn’t much cheaper). I leave it to others to determine if there is a moral. I can already here the lawyers arguing that we are not taxi owners. No we are not. However the longer we keep distinguishing ourselves as special from every other so called “non-lawyer” the more Rome burns and we fiddle.
Is Uber a good example? See Ellen Huet, “What Happens To Uber Drivers And Other Sharing Economy Workers Injured On The Job?” Forbes, January 6, 2015, online:
Hi Melissa,
The problem with access to justice is indeed overwhelmingly on the litigation side. Yes, people will complain about the cost of any legal service, but there is a whopping difference between complaining about the cost of a will (two months cablevision cost) and complaining about the cost of taking your case to trial (on average, the average Canadian’s entire annual income before tax).
With respect to your comments, I have the following observations.
(i) BMO reducing its roster of firms from about 800 to 200 with further reductions planned;
What do you mean by that? BMO deals with many more than 200 real estate firms if the buyer is getting a BMO mortgage. Where powers of sale are concerned, all the big banks now each use one or two law firms to do them all across Ontario. As a result, the legal costs to the poor homeowner who is losing her house have jumped. A small local law firm can do a power of sale for a fee of $1,500 to $2,000, but the big firms used by the banks are charging very often in the $4,ooo to $5,ooo range and up. One way to bring down the cost of those legal services to the poor sap who has to pay them is to force banks to use small local law firms to handle the powers of sale. Such files do not need the expertise of Megafirm LLP. Big means higher cost, and ABS means even bigger big. Yes it does, if not now then certainly later, in the considered opinions of experts in Aus and the UK who candidly say so.
(ii) the clients of seven sister firms hiring me to help them get control over their legal spend and forge stronger and more value based relationships with their firms;
Are you a lawyer or a management consultant, or a lawyer who is essentially a management consultant? The seven sisters and their 23 siblings who form the 30 largest firms in Ontario are the very law firms that insist on the highest overhead locations in Canada, the plushest offices, etc. etc. The large law firms do charge incredible amounts, but ABS would simply add yet another layer of overhead to cover, namely, the return to the venture capitalists, which overhead will have to come from either the clients or in reduced revenue to the lawyers. It won’t come from efficiencies that only ABS can provide, because there are no efficiencies that only ABS can provide. Nothing stops the big law firms from reducing their rates, and if enough of their clients refuse to pay the higher rates, then it will happen. We don’t need ABS to produce that. If you can help your clients get a better deal from the large firms, then great. We don’t need ABS to produce that. You have been doing it without ABS. If boutique firms are taking clients away from the large firms by, among other things, operating out of cheaper office space, then good for them. They didn’t need ABS for that. If firms are outsourcing research work to India and it works for them and their clients, then good. They didn’t need ABS for that.
(iii) the many small and mid-sized businesses who hire accountants to do all of their tax and structuring work because it is cheaper than dealing with lawyers;
Most tax lawyers are in large firms, charging a lot. Most tax lawyers do more than accountants such as appearing in tax court. Most people and businesses do not need the services of a tax lawyer, which is why there are far fewer tax lawyers than there are accountants. ABS is irrelevant to that. Tax law is so complicated that you are unwise to do it unless you are doing virtually exclusively tax law. I was surrounded by nearby classmates in my tax course at law school who looked to me to translate into understandable terms what the professor had spent the last hour explaining. Yet, I do not touch tax work at all. CRA sends out an Interpretation Bulletin or Information Circular every 5th day of the year. You can only keep up with that by specializing in it. Instead, I send my business clients to either their own accountant if they have one or to my excellent accountant if they don’t. I am rewarded for that mostly by having happy clients and by the referrals that my accountant and his firm send me. We have no self-serving referral scheme set up. We just send the clients. No, I do not want my accountant to have any say whatsoever in how I conduct my law practice, nor do I want to have to worry about any billing target he would impose on me if he invested in my firm and took an ownership interest. If I did receive a referral fee, then the client would be paying me for not working on his file. That, to the client, unproductive payment is similar to the, for the client, unproductive 33% of an associate’s fee that is paid to the senior partners who never even knew the file existed. Some will argue that the referral fee is paid by the accountant, not the client, but that is like saying the buyer doesn’t pay the real estate commission, the seller does. But where did the seller get the money to pay the commission? From the buyer of course.
(iv) firms hiring me to help them figure out how to budget, set and meet client expectations without losing money;
I am glad you are doing that. We don’t need ABS for that.
(v) “clients” who never become clients at all as they do their own legal work based on precedents that friends share with them;
There will always be clients who will do their own work. It is more likely that they got their precedents from websites or kits in pharmacies. That is their prerogative. The most lucrative estates files I ever handle are the ones featuring home-made wills or kit wills because we have to spend time fixing the errors and the omissions. No amount of internet help is going to appreciably diminish the mistakes self-helpers make. Most of them lack even the grammatical skills necessary to avoid ambiguities, let alone the fine judgments they are asked to make (and currently make, if they are wise, after consulting with a lawyer ultimately face-to-face). Those self-help clients are penny-wise and pound-foolish, but there will always be people like that.
You cannot say that the cost of a lawyer-done will is a barrier. It is the best bargain that the public can get from the legal profession. Except for extreme and rare cases, everyone can afford a lawyer-done will. They just have to decide to spend some of their discretionary income on that service instead of spending it on cablevision, alcohol, cigarettes, and whatever else. If they have absolutely no discretionary income, then they may not have any assets and may not need a will. Not everybody does. If they have no income but own a home or other assets, then what you are saying is that we should compromise the independence of the legal profession in order to subsidize a person’s asset wealth. Besides, there is zero guarantee that ABS would ever bring down the cost of wills. They are already dirt cheap from good lawyers and even cheaper from silly, assembly line lawyers. What is more likely to happen is that, with the decimation of small independent law firms in favour of a cartel of large franchises etc., the cost of wills would actually rise. Please do not use Xcess Law in Walmart as an example supporting ABS. Xcess, with its advertised price of a $99 will, was (a) set up without being an ABS, and (b) apparently does not give the client much more than a kit will for that price. Proper wills cost more than $99. Even Xcess knows that. Good grief. If the companies putting out the kits need to charge $40 to $50 just for the kit, what would they charge if they actually had to interact with the client, access capacity, prepare and have sworn the affidavit of the other witness, and do all the other things that we do to ensure that the client is getting what they truly need? Answer: a lot more than small firm lawyers do.
The vast majority of services offered by small solicitor firms are done at prices that reflect a highly competitive marketplace, the reality of overhead (modest in the case of almost all small firms), and the reality that we should take home enough in a year to allow us to retire by an average age of 75 in noticeably less security than an elementary school teacher. This shows that lawyer-done wills are priced right. If anything, given the value for money they represent, they are priced too low, but that is how our highly competitive market works.
(vi) the various forms of outsourcing that are now prevalent (from offices in India to Tory’s office in Halifax);
If outsourcing is beneficial, then good. We don’t need ABS for that.
(vii) clients hiring me to figure out how to increase internal capacity without increasing headcount in order to reduce external spend;
Almost everybody I know does that or applicable versions of that. What has that got to do with ABS? or with compromising the independence of the legal profession?
(viii) the success of firms like Conduit, SkyLaw and Cognition (to name a few) who are taking new approaches to “big” and “medium law” work;
Good for them. They saw opportunities and have taken advantage. Great. They did not need ABS to do it.
(ix) the introduction of full time project managers in many firms; and
If hiring such managers makes economic sense, then go for it. We don’t need ABS for that. Remember, they can be rewarded with bonuses based on performance or outcome. We do not need to sell them ownership and compromise our independence.
(x) the number of lawyers throughout the profession who regularly don’t docket chunks of their time in order to avoid unpleasant fee conversations with their clients.
Lawyers who do not docket or who rarely docket (I am one of the latter) end up billing less than if they had docketed. This has been conclusively demonstrated many times, and it is one reason why large firms insist on meticulous docketing by their lawyers and staff. So if you are saying that ABS would enhance the number of dockets being kept, then that will translate into higher cost to the public. How is that good for the public? But we do not need ABS to generate additional docketing. Every lawyer is free right now to docket every single tenth or less that they spend on the file. What we really should be focusing on is how to reduce the number of dockets litigation lawyers write by truncating the litigation process.
If you are saying that discussing fees with clients is unpleasant, then you do not practice in a small firm solicitor office. There are always the few who complain, but the vast, vast majority of my clients and the clients of lawyers like me are very happy with the cost of our services. Our real estate fees are a tiny fraction of the real estate commission (almost always far less than the HST on the commission, never mind the commission), less than the government costs (land transfer tax + registration costs + search costs), and given that title insurance is essentially useless to the buyer, a far better bargain than the title insurance premium. In all of 2014, I had one person express mild surprise at the cost of the will ($200!!!). She came in to do her will three weeks after she sold her lake-side country home to move into a cheaper city condo with a difference of over $100,000 in her bank account. ABS would not help that situation one iota except to drive up costs as the inevitable result of cartelization.
“This list goes on. It is perplexing and distressing that you think this is a litigation issue alone.”
The reality is that it is overwhelmingly a litigation issue. Barristers frequently say, and they are not kidding, “I cannot afford me”. You never hear a small firm solicitor say that about their own fee structures. What I would like to see, and so would the public, are sincere efforts to do something about the ruinously high cost of litigation, and an end to the campaign to harm the practices of small firm solicitors in the guise of “doing something” about access to justice. Let’s do something truly helpful. Let us not send the fire department to extinguish the candle in the metal pail; let’s send them to douse the conflagration engulfing the ten city blocks down the street.
“Your comments remind me of the feedback a participant relayed to me following one of my sessions – “Everything you covered was right on point and I’m sure my partners in the other departments will benefit. I’m good though.” Really? If lawyers are so confident that they are perfect and above improvement why are more and more clients issuing RFP’s and demanding discounts, write-offs, fixed fees etc.? ”
I do not know any lawyers who think they are perfect and above improvement. To say that is to create a straw man to denigrate. We are not opposed to change. We are opposed to any changes that would compromise our independence (and loss of ownership will do just that), and decimate over time the number and quality of competitors.
The clients demanding the things you cite are demanding them overwhelmingly of lawyers who are not small firm solicitors. Small firm solicitors already do 90% of our work based on up front flat fees and have been for decades. Flat fees are not a new trendy thing for us – they are the reality of long history. I do not give discounts, except to, for example, elderly pensioners who do not have any assets for me to subsidize. Instead, I set my fees in a ferociously competitive market and stick to them so as to treat my clients equally and fairly. In that sense, every client is already receiving a discount because I should be able to charge more. I should be able to charge enough so that I can retire, not at 75, but at 65 like so many of my clients, and in greater security than a finite RRSP, but like so many of my clients who have government-backed, fully indexed, lifetime pensions. For lawyers like me to have what average civil servants have, I would have to charge more per file. But I can’t because of the ferocity of the competition. I am not complaining. If I did not like what I do, I would go and get a teaching or government job. But please do not insinuate to me that lawyers in small solicitor firms are overcharging the public. And do not fall into the disprovable trap of thinking that a cartelization of thousands of small solicitor firms into a few behemoths would either lower costs to the public or enhance incomes to local lawyers.
“In the current “post 2008 reset” environment (which is not a passing fad) clients need more targeted and cost-effective services from their lawyers than ever before. While clients have some responsibility for the relationship, the onus is on the profession, as the service provider, to show the value of their service to their clients and to make the changes necessary to deliver that value at a reasonable, sustainable price for both the lawyer and the client.”
I agree that we need to educate the public on the value of our services. That can be done very effectively at a cost of less than $90 per year per lawyer by the Law Society and it would be among the best $90 lawyers would spend as part of their law society fees. I repeat, however, that small firm solicitor fees are already, demonstrably, well within “reasonable, sustainable price for both the lawyer and the client”. What are not are the prices for litigation and for non-litigation big firm work. Frankly, I do not know why anyone would go to a giant law firm unless they themselves are huge or wealthy enough that cost is of no or little concern. There are excellent lawyers in small firms and, thanks to our far more modest overheads, we are far more affordable. I also do business law. I will give my client a reliable quote. But if it later transpires that the other side is using one of the giant firms, I immediately call my client back and tell them that the quote just doubled because of the prodigious amount of additional time I will be forced to spend on the file. Every small firm business lawyer will tell you the same thing. The lawyer in the big firm will claim that they are just being careful and doing so takes time and time is money, but they do all too often indulge in overkill. I have been practising for 32 years. In all that time, I have never had a business deal go sour because a lawyer wasn’t careful enough, but the deals featuring two small firm lawyers cost the clients far less than the deals featuring a big firm lawyer on the other side. The answer to that is not to reduce the number of independent small firms by having them swallowed up by ABS franchises and the like. We can discuss in depth later what the answers are, but clearly ABS is not it. Briefly, the answer is to educate the public that lawyers in small firms are excellent sources of representation, that it is not the case that all the best lawyers are in big firms, and that clients should shop around and retain the lawyer they think will provide the best combination of work and price. ABS would reduce their choices.
Perhaps you will say that there will still be enough small firms even if some ABS franchises are set up, but you will be wrong. History has shown that big begets bigger. A hundred thousand US real estate lawyers were killed off by the predations of the billion dollar US title insurers. Now the US public has a handful of title insurers to, ahem, choose among, and their conveyancing costs to the US public have soared.
Endemic among the ABS pushers is this notion that somehow lawyers cannot innovate. What nonsense. What total tommyrot. If we can get a competitive advantage over other law firms by adopting or creating innovations, they we do so. We embrace all good ideas. I am far from alone in always being on the lookout for better ways to do things, and for dreaming up some of my own, but I will never swallow the codswallop that we have to compromise our hard-won independence and position in society in order to access some hoped for, dubious innovations that, it is falsely or naively claimed, cannot be achieved except through ABS, especially when the harms of adopting ABS are so obvious and so apparent from the lessons of history, economics, human nature, politics, physics* and philosophy that I sometimes wonder if there is some willful blindness at play. Then I remember that the ABS pushers are mostly true believers, and are just tragically misguided.
*In physics, as in societies, everything defaults to a mean. Overall, we have an above-average legal system. It is a natural process for things that are above average to regress to a mean. If we do not want to regress, then, as with democracy, the price is eternal vigilance. If we adopt ABS – an irreversible turning point, we will have regressed and failed in our responsibility of vigilance. History will then scorn us for our failure. Solicitor services bring the mean up because we offer excellent services at low cost. Barrister services bring the mean down because they offer excellent services at ruinous cost. If we truly want to improve the system, we need to address the main element that is bringing down the mean – the ruinous cost of barrister services.
(I put in the paragraph about physics because I knew that people would wonder why physics was in the list. There are much better arguments militating against ABS to be found in the other disciplines that I listed.)
Please consider your position afresh, and please be careful about mixing the solicitor apples with the barrister oranges. Thanks again for writing.
Brad
Brad, the examples I raised were to illustrate that significant change is underway throughout the profession as a result of the fact that clients of all shapes and sizes are unhappy. The unhappiness is most definitely not restricted to litigation.
My comments were also an attempt to elevate the detailed diatribe against ABS structures to a bigger picture consideration of options available to the profession, including but not limited to ABS, for addressing the discontent.
While there are concerns to be aware of when considering ABS, surely lawyers are clever enough to devise a framework to protect against the possible ills that have been identified in order to introduce something innovative that benefits clients and lawyers alike. Surely history doesn’t have to repeat itself and we can learn from our mistakes and improve and introduce something truly helpful.
Given the cost of opening a firm and building a client base, I am sure there are many lawyers who would be interested in hanging up their own shingle with the assistance of an ABS structure – it doesn’t have to be a behemoth shareholder to make this possibility a reality – it could be a collection of individuals who have faith in the lawyer and want some form of security/ownership/return for the risk they are taking by supporting the set-up and initial operating costs of that lawyer. Why should a loan from the bank be the only effective form of financing available to lawyers setting out on their own? How do newly minted lawyers with student loans and no house as collateral get started in a small practice?
I invite you to pull out from your established, successful small firm experience perspective and consider the bigger picture and how to help the grim realities facing many in the profession, at all ages and stages of practice. While I don’t profess to have any answers, I do profess to having an open mind and being willing to explore options and be solution oriented rather than a naysayer.
January 9, 2015
Hi Gary,
You say that “clients are generally and materially unhappy with many aspects of the delivery of legal services. Clients do not believe that there concerns are being addressed and are looking to alternatives.”
Which clients? I have literally thousands of clients who are very happy with (a) the quality of the legal services I rendered, (b) the fee I charged them, and (c) how I treated them on a personal level. This is a banal boast because it is a boast that literally thousands of lawyers can make. Think about it. If we were not doing good work for fair fees and treating them well, there are scads of competitors who will welcome with open arms any clients who are unhappy with me and the thousands of lawyers like me. In fact, because it is impossible to please everybody, there are a few clients who have dropped me over the 32 years. I had one client who was quite literally prejudiced against me because I was a man. So you see it can happen in reverse. She even candidly told me so. She said it was nothing against me personally but that she had had such a bad experience in her divorce (I was doing her real estate) that she just did not want to deal with men anymore, so she apologized and went to a female lawyer to have her will done. I gave her the names of several female wills lawyers. She had no trouble accessing several lawyers to do her will at competitive and modest rates. But the vast majority of clients of mine and of the lawyers like me are happy and satisfied.
If the members of the public who are being asked these survey questions are fair and informed, they cannot, except exceptionally, be unhappy with the delivery of small-firm solicitor services. Remember also what John Stuart Mill said: “The surest way for a man to feel he is unhappy is to ask him if he is happy”.
Other surveys have routinely produced the following responses: No, I do not like the legal profession. Yes, I do like my own lawyer (I must be a lucky client). Similarly: No I do not like politicians. Yes, I have been very impressed with the ones I have actually met.
Again, the vast majority of complaints over cost have to do with the time and cost of litigation. I have had my account assessed by the master exactly once in my 32 years (I won) and that covers well over 10,000 files. Can litigators make the same boast – one assessment in 10,000 files? (No, and is largely not their fault.) It is the litigation clients who are overwhelmingly looking for alternatives; hence, the explosion in self-represented litigants. Clients who want alternatives to lawyers for wills have numerous cheap options such as kits and assembly line law firms, even though a large number of those clients will discover, or their beneficiaries will discover, that they were penny wise and pound foolish. Further, the savings to such clients (the difference between the cost of a well-done, lawyer-done will and the cost of the kit) is pretty minimal. On the other hand, the difference to clients who represent themselves in a court process and the cost of retaining a lawyer is monumental, even bankruptingly so. Here, too, though, the individual may bitterly rue the day they did not retain a lawyer. But the barrier to retaining a litigation lawyer dwarfs by a factor of 200 to 1, and often far higher, the trumped up, virtually non-existent barrier to retaining a lawyer to prepare a well-done will, handle a real estate deal, incorporate a company and so on.
Squads of ABS supporters routinely fail to differentiate between what are essentially non-barriers on the solicitor side and sky high barriers on the barrister side; yet, it is the solicitor services that are mostly under attack.
You say, “One thing that is really not coming to the fore in the debate I am afraid is the concept of innovation. It cannot seriously be disputed that innovation in our profession has lagged most if not all professions. Unfortunately without innovation I for one fear that a day of reckoning will befall the profession.”
With respect, that is simply not so. Lawyers make amazing use of innovations. Just look at the websites and so on. Just visit the offices featuring the considerable computerization that we have happily adopted and adapted. There are very few industries that are more heavily computerized than ours, and they typically deal with numbers and products, not directly with people where, for an important part of the service, you have to set the computer aside.
You say, “Innovators that do exist are crying out for regulatory change to allow them to bring such change. All I can say is that if we don’t heed their voices the result is likely to be much less palatable.”
If innovators have something worthwhile for the legal profession to buy or adopt, let them sell, lease or licence those innovations to us, just as they have in the past. ESC Corporate Services has been very beneficial, but there is no need for that company to own law firms. Teraview has been very beneficial, but there is no need for Teraview to own law firms. Apple and Microsoft have been phenomenally beneficial to the legal profession, but there is no need for them to own franchises of lawyers. The cell phone industry has been very beneficial, but there is no need for Blackberry, Apple or Samsung to own franchises of law firms. Note that in all those examples, there are far fewer competitors than exist within the legal profession. ESC has one competitor that I know of. Teraview has no competition whatsoever. There are only a handful of computer companies and a handful of cell phone companies. You know the names of practically all of them. Can you name all the law firms in Ontario? Not even 0.1% of them.
There is no case whatsoever to be made that we need to sell ownership of our profession to non-lawyer companies and venturers. What are their “voices” that you speak of? “Let us own you so that we can make money off you, money that will have to come from the public”. Is that the voice you wish to heed?
You say, “The taxi industry has been a highly regulated industry…..”
You later say, “we are not taxi owners”.
Both statements are correct but irrelevant and, therefore, do not advance the discussion. But consider this. One of the biggest problems in the taxi industry is that most of the licenses in any given market are owned by a small number of rather wealthy owners who have structured the taxi industry for their personal benefit with the help, witting or unwitting, of the municipal governments. The taxi industry is another example of a cosy, highly cartelized industry. It already is the structure that ABS supporters want to bring to the legal profession – a much smaller number of much wealthier owners with a badly hollowed out middle. The current taxi structure, imposed on the legal profession, would see the death of thousands of independent law firms in favour of an anti-competitive cartel. Uber is giving choice back to the public. We already offer the choice of thousands and thousands of competitors (there are a thousand law firms in Ottawa alone but only a handful of taxi companies). Why would anyone want to harm that, other than through misguided idealism, a misreading of history, or naked (as in the candid UK ABS types) or hidden (as in some of the Ontario pushers who harbor delusions of Croesus) self-interest?
Our public gets excellent services for almost all their legal needs from both solicitors and barristers. The difference between the two sides of the bar is the cost of accessing them. The public gets very affordable services from solicitors, especially those in the small firms. The two areas where they do not get affordable rates are in their litigation needs and whenever they deal with a large firm for any reason.
ABS would greatly accelerate the consolidation of the legal marketplace and that would be terrible for the public, and us. Remember that the English experts unanimously and candidly advised us that the, ahem, main benefit of ABS is that it provides access to outside capital to fund consolidations in the legal marketplace – the very anti-competitive cartelization that I and others have been warning against for two years now. Why won’t the ABS sponsors accept that? Why can they not admit error? Why are they so hell-bent in compromising our independence when it is totally unnecessary to do so? Why? Cui bono?
You say, “(taxi) Companies have not innovated. Uber comes along with great technology and better service”.
Well, we in the legal profession have innovated and we continue to innovate. We use great technology already and are very open to more if it is beneficial, provided we can buy, lease or obtain a licence for it. Mindful of our critical role in society, we should not be willing to sell our ownership to get it, especially when we do not have to sell our ownership to get it.
Uber is often more expensive that regular taxis. They charge quite a bit more during high-demand periods. The regulated taxi industry is not allowed to do that by law. Perhaps if (a) the regulated taxi industry had always been allowed to charge more during peak periods based on demand, and (b) the system had never been allowed to degenerate into a cartel, Uber would never have been needed. Btw, in my real estate practice, and this is true of all real estate lawyers, we do not charge more for the file simply because the closing is in the peak Summer moving season. The smaller number of moving van companies do, though.
You say, “However the longer we keep distinguishing ourselves as special from every other so called “non-lawyer” the more Rome burns and we fiddle.”
With all due respect to those with an inexplicable contrary view, we are, in fact, special. In fact, very special. History, reality, common sense, and our legal/constitutional construct say so. We occupy the second most important professional position in society after the medical profession (I would rather have access to doctors than lawyers no matter what society I lived in). Many would argue that we occupy the most important position in society because who wants to have their cough checked if you have to live under the Taliban? We, especially the barristers which is one reason I love them, stand between the public and the government. The criminal defense bar, with significant justification, regard themselves as the last line of defense of democracy. We are, by far, the most important protection against government over-reaching in existence*. It is for that reason that we must never allow our profession to become regulated by government appointees as has now happened in the UK. What a tragedy that the birthplace of the modern concept of the independence of the bar is now backsliding from that.
*Some will add the media to that, but without lawyers defending the media against government over-reaching, then the media would be as free as Taliban reporters are in their mountain villages.
Further, we grease the wheels of commerce. What would happen if the entire economy could no longer count on the validity of contracts, the security of loans, the title to assets? We would be back to bartering with people we know personally. What would happen if testators no longer had the certainty of fulfillment of their testamentary wishes? What would happen if civil litigation and family law barristers no longer saved us from the anarchy of self-help enforced by guns and baseball bats? Even self-represented litigants have to play by the rules set up to allow barristers to serve the public in the arena of dispute resolution.
We have a sacred public trust – a trust that has never been compromised by loyalties to non-lawyer owners. We would be on the wrong side of history if we were ever to compromise it. Remember: To the extent you give up ownership, you give up independence. There is no amount of protection that you can put in place that will long survive the power of money.
We betray the trust of the public only if we deny them access to affordable legal services. There is only area where that routinely, widely, consistently, endemically, and systemically happens, and that area is litigation. In virtually all other areas, legal services for individuals are easily and affordably available. To the extent that the clients of the big firms feel or are overcharged for non-litigious matters, there are numerous steps they and the profession can take to deal with that without adding the additional layer of overhead that ABS would entail. Indeed, many of those steps have been taken as I pointed out in my reply to Melissa. I would encourage more of those steps. None of them has needed ABS.
What we need to address is the time and cost of litigation. That is where the Massive Problem is. Everything else is just smoke to obscure that simple truth.
And we do not need ABS to do it. ABS is simply not needed to address the Massive Problem. If anything, it would over time worsen it. It is crystal clear that over time ABS will certainly worsen the delivery of solicitor services. Why would be go down that road even one inch? Ask yourself who is most likely to benefit the most from ABS? Could it be the large companies that would buy us and the large law firms who act for them?
If we “fiddle” with our independence, then something will burn – our self-respect, our position in society, our part privilege and part right of self-regulation. There are some who may want to be Nero, but count me out.
Brad
Brad I don’t have the time to address all of the points you raise; many of which we will have to agree to disagree. Your cavalier rejection of survey and overwhelming evidence collected in numerous studies publication panel discussions association reports on the changing client environment is frankly cavalier. More importantly however I have spent a huge amount of time over the last couple of years talking young members of our profession and entrepreneurs (most of the latter driven from our profession). It is interesting that in the groups of young lawyers and entrepreneurs there is overwhelming recognition of the issues and for moving to new strategies such as ABS. If you canvass that group they will tell you that innovation has to be around the fringes because they can’t finance it. What you fail to address is quite apart from the access/self represented litigation problem clients are simply abandoning using lawyers. I have heard from many small businessmen who simply no longer use lawyers. They make due with what documents they find online. They find they no longer get value and that the technological ineptness of the profession as a whole doesn’t meet their needs. Brad we have a problem that is far broader than you acknowledge. I frankly have very little stake in the game. I am near the end of my career but I care deeply about those that follow and I don’t like the legacy we are leaving one bit.
January 10, 2015
Hi Gary,
I am glad you care about our legacy. So do I, and it is for that reason that I am opposed to compromising the independence that it took us centuries to win and entrench.
I disagree that I am cavalierly rejecting survey results. Instead, I am examining them in the depth they require. A lot of the complaints arise out of (a) the human desire to want everything for less even the current price is totally fair (there are some clients who, even if you paid them for the privilege of doing their legal work would still complain that you were not paying them enough), and (b) a self-harming and broad lack of knowledge of the value that we bring to the equation. Further, it is still the case that the largest area of complaints regarding costs is litigation. What do think excites people more? The $200 cost of a will? The $850 cost of buying a $400,000 house? The $1,500 cost of closing a $200,000 business transaction? Or the $40,000 cost of the average litigation file that reaches trial?
Are we supposed to compromise our independence, a compromise that is irreversible and will surely weaken us over time, because some survey respondents answer the questions in (a) their naked self-interest (and I would argue that penny wise and pound foolish is contrary to their self-interest if they but knew it), or (b) out of ignorance or lack of knowledge?
Given that the real-life cost barrier of litigation dwarfs any alleged non-barriers to wills, conveyancing, and small business advice by a factor of about 200 to 1, please explain to me why 99% of the time and resources of the Law Society that are being devoted to access to justice issues are being devoted to harming the low cost services and virtually nothing is being devoted to dealing with the real barrier?
The reality is that, on any objective analysis, small firm solicitor services are very affordable and provide superb value for money. Contrary to your experience, I have never heard of any businessmen “who simply no longer use lawyers”, although I agree that there must be some (found in any field). They use us when they need us, and they can get our services readily and for modest cost. If they are making do with documents they find online, then good for them. ABS will not stop them from doing so. The law never stops anyone from doing things themselves (except appearing in some levels of court). They use us when we add value. Some of them will not understand that we add value, but that is an easily addressable public education issue that I have dealt with elsewhere. ABS will not stop them from using online forms. All it will do is add a layer of overhead – the return to the investors. Absolutely nothing stops law firms right now from offering legal documents on line. Nothing. And, increasingly, many do. We do not need to sell our ownership to do it.
You describe “technological ineptness of the profession as a whole” and also talk about younger lawyers. Are they not the ones who are technologically adept? Are they not the generation who were given laptops instead of rattles? I communicate a great deal with my clients by email (and I could use Skype etc.), including sending them draft documents for their review and comments. They use me and this process because I can tailor the document they need to their needs better than any program can, but we use programs to make the task efficient and client-friendly.
You say that younger entrepreneurial lawyers are leaving the profession and that innovation has to be around the fringe and they cannot afford it. First, there are far too many lawyers (a situation worsening every Spring) for all of them to make a decent living in private practice anyway (I can hear the howls over that, but it is true, thanks to the law schools graduating students at a rate five times greater than population growth for years now, and never failing anyone they admit to first year. If they maintain that level of graduates, someday every client will have their own personal lawyer, and every lawyer will have one client each from whom to extract their entire annual income).
Second, innovations have routinely occurred at the core of what we do. Consider the differences between how we practiced when we started and how we practice now. Very different, and I would not want to go back. Wills have gone from being laboriously typed by a secretary to being tailorable by the lawyer on his computer. Instead of relying on codicils to make amendments and rare corrections, any amendments or corrections are done in the time it takes to type them. Can’t get faster than that. Real estate conveyancing has moved from requiring a trip to the Registry Office to reaching for your mouse. Please do not tell me that we have not innovated at our core.
Again, to achieve or take advantage of innovations, we do not need to sell our ownership. If there are truly beneficial innovations out there, then, by definition, they will enhance revenue, and can be paid for by debt rather than equity or they can be leased or licenced. At least with debt, leases or licences, once the debt is paid or the lease is over, the creditor/lessor is gone forever, but with equity, the owner is there forever exercising the influence that his money bought. Big, and crucial, difference.
What innovations are they talking about? For much of law, you cannot safely discard the human interaction between lawyer and client. We already have tremendous ways to interact with our clients without either the client or the lawyer having to leave his or her office, or, for that matter, beach umbrella. As for producing the work needed, in most of legal practice, you cannot safely replace the lawyer’s input, either directly or by supervising trained staff, with an algorithm.
To wit:
Last year, I attended an Information Session in which the six invited panelists were (1) a graduate student who had never practiced law, (2) another graduate student who had never practiced law, (3) a professor who had never practiced law, (4) another professor who had either never practiced law or hadn’t in 50 years, (5) a technology expert who had not practiced much law compared to running his businesses, and (6) a senior partner in a giant law firm which is now defunct. Collectively, the six had very little experience in a private practice environment, and no experience in a small-firm practice environment. Noticeably absent was even one speaker from the small-firm bar – the part of the bar that would be the most affected by ABS and the part of the bar that could have brought considerable, relevant expertise to the Session. We do not seem to count or matter, you see.
One of the organizers was a big firm barrister who once said to me, without ever having practiced real estate law, that real estate lawyers are “mere technicians”. “Come work in my office for one month”, I told him, “You would no longer think that.” Sadly, there is a notion out there among the ignorant or the mischievous that small firm solicitor work is expendable (especially if it helps deflect attention away from doing something effective about the time and cost of litigation). Pause for a moment. What that last parenthetical remark cynical and unfair or a realistic appraisal of what is going on? If you are unsure, keep reading.
At the end of the lecturing, each table was given a case study. Ours was about a proposed website that would allow a “user” to sign in and, by answering questions, obtain a “tailored” will. The user would then have a “free” consultation with a lawyer by Skype who would help the user finalize the document.
The case study was structured to blunt criticism. Who can be against the public obtaining “free” legal advice to cover their entire legal need, in this case a will? Let us accept that if all lawyers provided their services for “free” for the entire mandate of the legal need, the public would benefit, but only until the lawyers all starved to death. The reality is that the “free” Skype consultation is not free at all. The cost of it will be included in the website’s fee, or it will be borne by the lawyer’s other clients, including by the user when the user needs other services from that lawyer or from other lawyers who are in the same trap. By definition, loss leaders are made up elsewhere with no overall savings.
The case study used “user”, not “client”, because these websites contain disclaimers denying any solicitor-client relationship and any liability. So what is the user really getting? The company that owns the site will be clear of liability, but the Skype lawyer will not be and should not be.
Further, the website could be owned by a disbarred lawyer from Ontario or anywhere operating out of Buffalo (how would we know or be able to police it even with entity regulation?), the Skype lawyer could be in Windsor, and the user in Ottawa. The user never builds a relationship with a trusted, local lawyer, someone who will get to know the user. Such a user (the word “client” does not really apply to them) does not get a lawyer he or she can call for all kinds of good, and often free, advice over the years and for reliable referrals to specialists when needed. (Local lawyers are content to give free advice where appropriate on a variety of matters because the client is already part of the lawyer’s family of clients – a family the lawyer is keen to serve very well because his or her livelihood and local reputation depend on it. The Skype lawyer cannot perform these valuable functions. A good deal of what local solicitors do is prevent small problems from becoming big problems. Society gains immeasurably.)
The case study was obviously created by someone who does not know enough about wills law, but then it is easy to denigrate or even jettison a practice area one knows little about, does not practice in, derives no income from, and never receives the appreciative feedback from the individual, as opposed to corporate, clients who have been so well served at modest cost by the lawyers in that “expendable” area.
Even if the will coming out of the user’s printer was sensibly drafted (many will not be), it still needs to be witnessed. Even if it is witnessed properly (many will not be), one of the witnesses needs to swear an affidavit of execution with the will properly stamped as an exhibit. The witness and, probably, the user would have to go to some lengths (travel and appointment time) to ensure that the affidavit was properly done using the right government form (which changes periodically), properly attached to the original will with the exhibit stamp in the right place (on the back of the signing page, not the front, and not on any of the other pages), and properly commissioned.
Btw, would you, acting as a commissioner, be comfortable swearing an affidavit of witness without knowing the circumstances? Are you not a great deal more comfortable when commissioning the oath of your secretary than that of some stranger?
Without the affidavit, exhibit stamp and commission, submitting the will to probate could easily be costly, time-consuming and difficult. The witnesses could die or move away in the intervening years. Then what? An expensive mess, that’s what.
Probating a will with no affidavit or a badly done affidavit would necessitate a court application which would run up the cost to the estate by an amount many, many times the cost of having the will done properly by a local lawyer in the first place, and would delay the administration of the estate and the payments to the often needy beneficiaries by a considerable period.
Further, during the drafting of the will, how would the user’s capacity be reliably assessed? Facial expressions and body language are important clues when assessing capacity. The Skype lawyer might be able to see some of the facial expressions if the camera angle is narrow or some of the body language if the camera angle is wide, but not both simultaneously, and nowhere near as well or as law-suit proof.
Further, how would the presence or absence of undue influence be reliably assessed? How could the Skype lawyer be certain that the intimidating presence of a self-interested beneficiary is not in the room or within view or earshot? If the user is being unduly influenced in general, how could the Skype lawyer be sure that the user was answering truthfully the question, ‘Are you being unduly influenced?’
While one may hope that lawyers doing such poor jobs would get sued into the stone age, such claims would be costly for the profession and a far worse outcome for the users and beneficiaries than having the wills done properly and cost-effectively in the first place.
Even if some people could go through the entire process through to proper completion, the online scheme does not justify making the means of getting a proper will this attenuated and amorphous. Too many people will be sucked into believing that they somehow saved money and got excellent wills when, in fact, they didn’t and instead left an expensive mess for their family to pay for.
The law allows people to do their own wills, and the government does not stop the sale of will kits, but the law has always said that, if you want to be sure that your will is done right, you need to see a trained and insured lawyer (and that has meant in person for all the above reasons). The reason for this law is not because the government wants to feather the nests of wills lawyers. On the contrary, it is because the government wants to minimize the number of estates that end up in the costly court system. Minimizing present and future costs is a large part of what solicitors do for their clients. Solicitors have little desire to drag a matter out for three years at a cost of $30,000.00 and up (often way up). It is the barristers who benefit from that. Solicitors do prevention law. Barristers work when problems were not prevented but now have to be battled over. The less prevention there is, the more litigation there is. Imagine the mess if less prevention law is done; the courts are already clogged.
I have seen some pretty bad will kit products and holograph wills. They ended up costing the family far more than if the testator had seen a lawyer. (It would be helpful if people who do not do wills law would stop referring to “simple wills.” Yes, some wills are more straightforward than others, but it cannot be known with certainty which ones are which until the lawyer has had a good discussion with the client. They are also extremely easy documents to screw up whether as to syntax, grammar, meaning or even punctuation.) Often, a client will call me and say that all they need is a simple will because their estate is simple. Most of the time they are quite mistaken, and are amazed by the things I bring to their attention.
The ultra-dubious so-called benefits of the online will scheme do not justify taking away from local, mostly small-firm lawyers a major aspect of their practices – an area in which the costs to the public are among the lowest-cost, most cost-effective legal services available. I reckon properly done wills and powers of attorney are the best bargain, value for money, that the public gets from the legal profession. Real estate fees are second. Fees for setting up a corporation or business are third. What is no bargain at all is having to enter the litigation maelstrom. The public should be encouraged to meet with these low-cost local providers, not encouraged to bypass them in a scheme that will cause more harm than it solves.
In exchange for about $200 (half of which is overhead paid mostly to local staff and landlords) paid to an attentive, on-the-spot, keen-to-please-the-client lawyer for a well-drafted, airtight will, the client gets the peace of mind that their family will have a straight-forward estate to administer at modest or no legal cost. Many of our beneficiary clients are able to handle the administration almost entirely, and often entirely, by themselves, thanks to how well the will was drafted.
In exchange for an average of about $75 per power of attorney (again half to overhead circulating locally), our clients get, from the skilled, fully attentive lawyer, their property and personal care arranged or arrangeable by a trusted attorney, thereby almost always avoiding far more costly problems. They also get the virtual certainty that these documents will not be overturned because of some claim regarding influence or other bogus claims. They also get a thorough explanation of the ramifications of the document, what to be alert for, and so on.
This online wills scheme, far from being the boon to the public its backers think it is, would cause no end of problems. An ABS that would allow it is simply not worth the trouble caused by confusing the public and jumbling up the system.
One ABS supporter suggested that the laws should be changed to dispense with witnesses and affidavits of execution for wills (supporters like him say things like that because, instead of admitting that the ABS scheme was hare-brained to begin with, they struggle to find ways to do end runs around the sensible objections). As he is a lawyer who has never done wills, he was seemingly unaware that the rules surrounding witnessing wills and affidavits of execution are designed to reduce frauds and other skullduggery. Removing those protections would quickly engender far greater mischief that would outweigh the dubious benefits of the ABS wills he touts.
I have spent a lot of time describing this scheme because it is typical of how little many of the supporters of ABS understand the practice environment of small firm solicitors and how willing they are to make a mess of it to the detriment of the public (but, to the extent more estates end up in litigation, to the benefit of those who wish to see ever increasing rates of litigation).
So far, in all these Slaw exchanges, my central points remain unchallenged. To wit:
(1) ABS is not needed to achieve its supposed benefits (we can do it ourselves or cherry-pick from other jurisdictions).
(2) ABS is certain to compromise our independence increasingly over time as money is too powerful (history, human nature and the observable phenomenon of generational shifts of attitude prove this).
(3) ABS is certain to lead to anti-competitive corporate concentrations (current ABS types candidly say so and gleefully admit to be working toward it).
(4) Such cartelization is certain to lead to higher prices to the public (see, to cite only one example among many, many, what happened when a handful of US title insurers replaced 100,000 US real estate lawyers – a “dysfunctional” per the State of California and “invidious” per the Supreme Court of Iowa industry “in which the public pays too much” per the State of California (about four times more than what the lawyers used to charge) while delivering services that are “shit” per an employee of a US title insurer who used to be an independent lawyer until she and all the other real estate lawyers in her city in Florida were put out of business by predatory pricing that lasted only as long as it took to kill the lawyers).
(5) Most if not all of the arguments in favour of ABS that lie outside those first four points are little more than clutching at straws by people incapable of resiling from a stance they have taken publically, not matter how increasing foolish the stance is (get rid of witnesses and affidavits for wills).
(6) It is not enough to say that Australia and the UK have ABS. The US does not, and the US legal world is ten times larger than the Aus and UK worlds combined, and is opposed to it.
(7) It is not enough to criticize Harvard Law Professor Nick Robinson’s study warning of the dangers of ABS by focusing on the propriety or otherwise of calling it a Harvard Study while simultaneously saying nothing about the contents of his paper.
(8) It is manifestly wrong to say that ABS opposers have to prove that ABS will cause harm. On the contrary, the onus is on those who would make an irreversible Seven Oceans Change to the practice of law to show that ABS will be beneficial and not harmful – at best a 1 in 3 throw of the dice – and to show it in the face of very sound and compelling reasons against it.
Cheers,
Brad
Verna, that’s a pretty lame counter-argument. After all, the purpose of the law society regulations (and tax regulations) is to protect consumers of legal (tax) services, not their suppliers (a point sometimes lost on the LSUC, and clearly lost on taxi regulators).
Surely the question – the only question that should matter to the LSUC – is whether clients get better or cheaper or more convenient service. That’s what Uber has provided to taxi consumers, and that’s what we should be asking about ABS.
Mr. Smith,
Thanks for your critique. However, it has been raised in the above arguments/comments that the present working condition for legal professionals namely lawyers is extremely stressful with the unfortunate consequence of a high suicide rate amongst the profession, addictions etc. Now given that scenario you’ve stated that “the purpose of the law society regulations (and tax regulations) is to protect consumers of legal (tax) services, not their suppliers (a point sometimes lost on the LSUC, and clearly lost on taxi regulators)” and I agree there’s no disagreement about that. However, is there not also a duty to ensure that the people being regulated are also protected from working conditions that are detrimental to their health? Should there or is there no balance to be met between the two, i.e., client/worker needs?
Yes, Uber is providing their customers/clientele with choice but that choice comes at the exploitation of the current economic conditions – that’s good business – good for them. Many under-employed or unemployed workers who are looking for ways to earn a living that allows them to afford decent shelter and all the other necessities are more than willing to take up this opportunity provided by Uber. But at the same time, while Uber is still sexy, their business model may provide choice for customers but is no improvement for the drivers who have been shut out by the regulated taxi industry. Again, would it not be better to provide an example that does both, improve the working conditions for the worker and the client/customer?
Also, “clients get better or cheaper or more convenient service” is not always the case as Uber uses algorithms allowing for surge pricing. However, I’m sure the clients who continue to use Uber are quite satisfied with their service, Uber continues to grow their market share if that’s what the legal profession is after Uber is a great example. However, if balancing healthy working conditions and customer needs is what the profession is after Uber is not so great an example.
More on the Uber argument: The reason the regulators prevent taxi companies from charging more during high demand periods is to prevent what they see as the evil temptation to gouge passengers at their times of greatest need. Now, along comes Uber which does exactly that and Uber is seen as this great wave of the future and a fine model to emulate. I pointed out that the many, many real estate lawyers do not increase their fees during the busier summer season, but that, of course, the few moving van companies do. Nor do we charge more for doing wills just because the client is elderly and feels a more pressing need to have one.
Assume that Uber becomes the sole or one of a handful of uncompeting taxi ride suppliers and all the regulated companies disappear. What would happen to the pricing model then? The same people lauding Uber now would be screaming about the high charges and unfairness of the new business model. But, leaving aside the not very helpful tenuous analogies to the taxi industry and turning to the delivery of small firm legal services, when you have a few large entities operating on the fringe of small firm services while thousands of independent small entities occupy the great bulk of the market, then the public is not harmed. But when you flip that so that a few large entities occupy the great bulk of the formerly small firm services market and the small entities are relegated to the fringes, then the public is harmed. History and current events have proven that many times over. That is one of the harms that ABS will engender
Dear James Patrick re your blog on December 30th, 2014 at 10:05 pm
You said: “I wonder what the average hourly rate is for the benchers for whom you’re advocating? Talk to the managing partner of any firm about AR, look at the cars in the lawyer-only spots, visit the average partner’s home, then tell me that the profession isn’t motivated by money just like any other industry.”
I am certainly not advocating for the benchers other than to truthfully point out that, with only two exceptions (who no longer have a vote), they are a great group of people to know and they are all well motivated, even the ones who are tragically wrong on this issue. Indeed, with my firm arguments against ABS, I have doubtlessly and to my personal sorrow annoyed a number of them (but have also received a lot of support from others of them). I do not deny that the profession is motivated by money, but that motivation would be quantitatively worsened if we became owned by non-lawyer corporations and venturers whose legal, and proper, responsibility is to maximize returns to their shareholders. At least we have our ethics to temper the situation somewhat. Non-lawyer owners do not have, and cannot have, and should not have, the same ethos, and, over time, they would increasingly impose their ethos on us. There are no protections against that would stand up over time. None.
The ABS supporters say that ABS will reduce the cost of some legal services to the public. However, I do not know a single ABS supporter who is thinking and hoping and praying and planning and intending that ABS will reduce his or her annual income. Not one. They think that ABS will either be income neutral to them or will come at the expense of lawyers not in their practice area or will somehow come about either from, first, a hoped-for increased demand for legal services or from, second, a hoped-for set of efficiencies mostly through the magic of algorithms.
To increase demand for litigation services (essentially the only legal service area out of reach of most Canadians), you must lower the cost of those services. I do not believe that any of the litigators among the ABS supporters really expect to lower the cost of their services, but let us assume that they do. They have to hope that dealing with that increased demand can be achieved by spending a corresponding amount of less time on each file because the vast majority of litigators are already working 50+ hour weeks. In other words, they have to hope that the time a typical lawyer spends on the average litigation file can be drastically cut if the lawyer hopes to maintain his income by handling many more files in the same 50+ hour work week. That cannot be achieved without a tremendous amount of political will by the government – a government that would have to be convinced that the changes would not result in a crying need to appoint more judges and build more court rooms both at the government’s expense. Convincing the government of that is a tall order.
I have read Magna Carta. There are, if I remember correctly, 63 clauses. Some of them are preamble and administrative. Several, the ones we cherish, serve to constrain the power of the king. Paragraph 18 does not constrain the power of the king. Instead, in modern jocular terms, it says the equivalent of “Please, please, please, bad King John, would you please, please, please send out more judges so that we can get our disputes resolved in a more timely manner?” John did not want to spend any more money on judges than he thought minimally necessary, and not much has changed in 800 years.
Then the supporters argue that the increased demand will be taken up by the hordes and swarms of new calls. How? They will have debts to pay, overheads to cover, annual incomes to account for and families to feed. Further, thanks to the irresponsible spewing out of virtually every single accepted first year student from bloated up law schools, those very hordes and swarms plus the existing lawyers are going to have fewer clients per lawyer, even with the hoped-for increase in demand, such that the only way to pay those debts, overheads, and incomes is to charge correspondingly more per reduced number of files. Now the ABS supporters want to add yet another layer, and more likely two more layers, of overhead to cover: (1) the return to the lawyers running the smaller number of big or franchised law firms, and (2) the return on capital investment to the venturers. Both of those layers are, overwhelmingly, unproductive costs to the client. All of this is a mug’s game.
The supporters cite studies claiming high rates of “unmet legal needs”. But dig into those claims. Much of it is piddly stuff, nothing a second person in the equation, the adviser, can make a living off. I solve countless little problems for clients, often by telling them that it not worth their time, trouble, stress and cost to pursue. Why do I tell them that? Because, on any objective basis, it’s true. Sure, in a perfect world, they would get the $200 owed to them by that blankety-blank down the street, and yes they think they should have no-cost legal advice to get it, but in the real world they are not going to pay for it because it is not worth the realistic cost.
Then they claim that the hoped-for algorithmic efficiencies will be the panacea. Not so. I have previously skewered the hare-brained idea of doing wills on line followed by a consultation with a “free” lawyer by Skype. But let us assume that the extremely modest per-will earnings of small firm wills lawyers across Ontario can be taken away from those lawyers by MegaFirm headquartered in Los Angeles with a handful of token Ontario lawyers on staff, then what? How will those wills lawyers adjust to the loss of an important practice area? How will they adjust when real estate law is also taken over by three US-owned non-competitive behemoths (to the very great detriment of the public)? What will they do? Go into litigation, of course, further diluting the number of clients per lawyer and further forcing up the cost of each file in order to make a decent living off a smaller number of clients.
I have just described a major factor in the frightening deterioration of the legal world in the US. Why in Heaven’s name would we want that here? We would have to be either duped, delusional or very self-interested at the expense of everyone else to want that here.
I have previously pointed out that Quindells, and early ABS in the UK, had suffered major blows to their stock value. Three days ago, the shares soared when Toscafund Asset Management bought a 5% stake in the firm. Then yesterday, they plummeted again. And the firm is under investigation by the regulatory authorities when a key player dumped his shares last year. I do not know why we would put our profession through that, but let us supposed that the investment by Toscafund is enough to save the firm. To whom do you suppose the decision makers and lawyers in the firm will feel most beholden to? Mrs. McGillicuddy who needs a will or the powerful giant Asset Management company who bailed them out?
I look at the financial returns to the profession and I find the notion that we should support ABS because it would allow us to income split utterly repugnant and self-serving. How dare we try to increase the tax burden on other citizens given the average income of the bar? Furthermore, income-splitting can only come about by legislative change. How likely do we think it is that this Ontario government, or any Ontario government, or any government, would give us that? The idea has nothing to do with ABS; it is just a piece of quick melting sugar sprinkled on a poisonous apple. And (I thank a colleague for the following point), the reason doctors got income-splitting was because the government needed to improve the financial health of the medical profession and did it by way of income splitting so as not to be seen to be doing it by way of increasing the OHIP billing rates. The taxpayers are still paying for it, but indirectly. It was done to placate the doctors while limiting criticism of the government. A neat, but callow, trick. We are not going to get it as it would open the door to many other groups clamouring for it, and the government is just not going to do it.
Then the ABS supporters claim that the legal profession is insufficiently capable of innovation. What poppycock. We have consistently and happily innovated whenever and wherever possible either to steal a march on our competitors or to catch up to them or simply to benefit the clients. We will never stop doing that. If there are useful innovations out there, then we will be happy to buy them or lease them. We do not need to sell our independence to acquire them. This is so dead obvious that it is frustrating to have to keep making the same points repeatedly.
Cheers,
Brad
In the previous post, I said that ABS supporters do not expect their incomes to go down as a result of ABS and that they expected ABS to be either revenue neutral to them or come at the expense of other lawyers or be achieved by hoped-for efficiencies or increases in demand. I left out one aspect: many ABS supporters believe that their incomes will in fact go up, not down or remain neutral. For those supporters who are glassy-eyed at the hope of increasing their annual incomes thanks to infusions of venture capital, I ask What has that got to do with the public interest? Nothing of course. And Who is going to pay for those increases? The public of course.
Due to a chaching problem at SLAW, since corrected, my replies to the comments of Melissa LaFlair and Gary Luftspring from January 8th on (and possibly before) may not have been seen. Since the comments deserved replies, interested readers can find the replies in the Older Comments section.
On January 11, 2015, Bob Smith posted the following:
Verna, that’s a pretty lame counter-argument. After all, the purpose of the law society regulations (and tax regulations) is to protect consumers of legal (tax) services, not their suppliers (a point sometimes lost on the LSUC, and clearly lost on taxi regulators).
Surely the question – the only question that should matter to the LSUC – is whether clients get better or cheaper or more convenient service. That’s what Uber has provided to taxi consumers, and that’s what we should be asking about ABS.
Here is my reply:
It would be impossible to disagree more with the statement that “the only question that should matter to the LSUC – is whether clients get better or cheaper or more convenient service.” With all due respect, to say that that is the “only question” is to take a very myopic view, practically devoid of historical knowledge.
The most important role, and legislative mandate, of the Law Society is to regulate the legal profession in the public interest. That must include, as top priorities, protecting the integrity of the profession, and preventing those who, by law, do not share our ethos from acquiring the means of compromising that ethos.
It is demonstrably not the case that cheap always means better. In fact, too cheap almost always means inferior. That is not in the public interest. Too cheap means higher risk of inferiority, to the point where you would be wise to buy insurance against the higher risk, and if you can do that, you might as well pay a fair fee for non-inferior services. See John Ruskin’s The Common Law of Business Balance.
Helping to foster an environment in which clients can get better, cheaper or more convenient service are important but secondary aspects to the Society’s primary role. In fact, the Society took an important step in that direction when it agreed, at the request of the Government of Ontario, to regulate paralegals, thereby giving them enhanced standing in the minds of the public, and requiring of them to adhere to improved standards of education, discipline, insurance coverage and so on. I was in the vanguard of that saying, at the very first meeting, that of course the Society should regulate paralegals. To me, it was a no-brainer, and the majority of benchers agreed with that mostly on their own.
Note that the Society is always looking at ways to make the delivery of legal services better. The number of CLE programs is testament to that, to cite just one aspect. As for convenience, law firms, especially small ones, are everywhere. There are only about 120 Walmarts in Ontario, but there are, what? 10,000 to 15,000 small firms? And almost all of us communicate routinely and frequently with our clients by electronic means to minimize the number of times the client has to come to the office. My wills clients only need to see me once – at the final document review/signing appointment (at which I make a final assessment of their capacity etc.). My real estate clients only have to see me once – at the document review/signing appointment at which time I develop my personal rapport with them so that they will feel comfortable in calling me months or years later with other problems, most of which I solve without a fee. My real estate clients, by their choice, usually do come to my office a second time – to collect the keys and the reporting package – but if that is not convenient for them, I can arrange to put the keys in their hands by other methods and mail them the reporting package.
Do you know what is not convenient? Sitting in a discovery all day. Sitting in a court room all day. Losing several days from work to sit there. Further, do you know where almost all the barristers practice? In the inconvenient to get to, high parking cost downtowns. Do you know where the small firm solicitor offices are? Everywhere.
As for cheaper, I agree that some legal services are beyond the reach of most Canadians. Which services are they? Overwhelmingly, they are litigation services. Late in 2014, Cross-Country Check-Up hosted a phone-in on the subject of legal services affordability. I did not hear it, but an Ottawa lawyer, well known for his decency and thoughtfulness, did hear it and reported to me that not one caller complained about the cost of solicitor services. Not one. All the complaints about affordability were about non-solicitor services. Yet, it is solicitors, and by extension their clients, who would be the most harmed by ABS.
There are many ways to make legal services affordable to the public. Small firm solicitor services already are, on any objective analysis. Not one service offered by those firms stands as a barrier to access to justice. Not one. The reason small firm solicitor services are so reasonably priced is because there are enough of such solicitors that competition is ferocious. Paradoxically, hugely increasing the number of the already large number of competitors would only service to either drive prices up (having to make a living on too few clients) or drive standards down (trying to do the transactions on such volume that you cannot possibly pay attention to each file). Balance is what is needed – a balance that the law schools are self-servingly ignoring and a balance that a cartelization would certainly ruin.
Yes, worse than hugely increasing the number of small firm solicitors would be to allow the decimation of them by the proven and consistent predatory practices of a handful of giant corporations who, having gotten rid of the multi-thousands of lawyer competitors, would then have the public at their rapacious mercy. See the sad impact of that very dynamic engineered by the billion dollar US title insurers on the shell-shocked and outrageously overcharged Americans. Tell me, ABS supporters, why would you want that here? Are you simply content to turn a blind eye to that? and, if so, why? Examine why, and in depth.
The real issue, as it has always been from day one of this debate, is how to make litigation services affordable. That is where we need to focus our time, talents and resources. On the real barrier. Not on fake barriers. The real one. Instead, we have wasted a million person-hours on such stupidities as the cost of a will. Not a blessed thing has been devoted to reducing the cost of litigation except maybe for our First Nations siblings. And what is the proposal there? Why, it’s to bypass the mainstream litigation system altogether! Lucky them! Go for it! I mean it. Go for it. I’ll help.
Bob also says that taxi regulators are missing the point. I have covered that elsewhere, but remember, regulated taxis companies are prevented from gouging fares during peak periods, something Uber does gleefully and to the huzzahs of certain commentators. But imagine their high dudgeon when the entire taxi market morphs into one where every single taxi company and every single Uberite gouges fares during peak periods and any other time they can get away with it. What will those same commentators say then?
I stress, however, that the taxi industry is not a good analogy to the legal profession. I have never heard of a cabbie standing effectively on the last line of defense of democracy or taking the baseball bats out of the hands of disputants by advising and representing them in a resolution process (great barrister work) or making our entire economy secure by their diligence and legal opinions, and preventing literally countless problems from even arising (great solicitor work).
Another of Bob’s posts cries out for reply, but that will follow.
Brad
January 20, 2015
Hi Melissa,
On January 9th, 2015, you wrote:
“The unhappiness is most definitely not restricted to litigation.”
No, just overwhelmingly so. To cite one example out of countless, listen to the Cross-Country Check-Up show late last year where, for two hours, people called in to complain about the cost of lawyers, and not one of them mentioned solicitor’s work.
“My comments were also an attempt to elevate the detailed diatribe against ABS structures to a bigger picture consideration of options available to the profession, including but not limited to ABS, for addressing the discontent.”
Diatribe is not the right word to describe a heartfelt and informed exposé of the worst idea to hit the legal profession in several centuries. I have been trying to get my fellow benchers, the Law Society, and other commentators to do exactly what you say, namely, consider the options for addressing (real) client discontent. They exist, they are effective, and they do not involve selling the profession to remote bean-counters. So far, it has been an uphill battle to move the focus from selling our soul to working on beneficial and effective real solutions to real problems instead of wasting time on quack solutions to trumped up non-problems.
Do not think for one moment that the pushers of ABS expect their incomes to go down as a result of selling out the profession. For many of them, the talk about the public interest merely disguises the true intent which is more money for them. If the public ever benefits, it will be by accident or temporary. Remember the observations of the English experts who said that (a) they do not know whether the public will ever benefit, and (2) the main “benefit” of ABS is that it allows access to outside capital to fund consolidations in the legal marketplace. Remember also that some early opportunists in England have made candid, public, for attribution, statements that they foresee far greater consolidations than have already taken place and that they are actively working to bring more of it about. There is no chance that this will work in the public’s favour over time. See the corporate take-over of US conveyancing from real estate lawyers.
“While there are concerns to be aware of when considering ABS, surely lawyers are clever enough to devise a framework to protect against the possible ills that have been identified in order to introduce something innovative that benefits clients and lawyers alike. Surely history doesn’t have to repeat itself and we can learn from our mistakes and improve and introduce something truly helpful.”
Sadly, no, we are not clever enough to protect ourselves from the immense power of money. Whatever wedge we allow now will certainly widen. That is proven innumerable times by history. History does repeat unless we learn from it, and history tells us not to sell our ownership for any reason at any price. Any innovations can be created, adopted and adapted by the current lawyer-owned model. We do not need to give non-lawyers any equity at all. If the innovations are truly beneficial and helpful, then we can borrow (if necessary) to buy them, or we can lease them until they become supplanted by better innovations, perhaps ones generated within the profession. During any finance period, we owe the lenders nothing except payment and they disappear once they have been paid. If we give them equity, we owe them deference for their equity position, and we can never get rid of them – they never disappear.
“Given the cost of opening a firm and building a client base, I am sure there are many lawyers who would be interested in hanging up their own shingle with the assistance of an ABS structure – it doesn’t have to be a behemoth shareholder to make this possibility a reality – it could be a collection of individuals who have faith in the lawyer and want some form of security/ownership/return for the risk they are taking by supporting the set-up and initial operating costs of that lawyer. Why should a loan from the bank be the only effective form of financing available to lawyers setting out on their own? How do newly minted lawyers with student loans and no house as collateral get started in a small practice?”
The cost of opening and running a small law practice is very low. A small law firm is one of the easiest and cheapest businesses (if you will allow me call it that) to run. It is not a restaurant. It is not a dental practice. If you cannot manage a sole or two-person practice, then maybe you should not be in private practice. Seriously. You can even do it from your kitchen to start with. I know several lawyers who have done exactly that. Then, having built a client base based on diligent service, they rent a modest office and continue to build.
I know of a model for the practice of law that delivers office space, furniture, internet capability, computers, phones, faxes, copiers, access to meeting rooms, access to experienced secretaries, and access to experienced mentors in the practice of law. That model is called a law firm. On the solicitor side, it has worked very well for several centuries for both the lawyers and virtually all the clients. On the barrister side, it has worked very well for the lawyers and for probably most of the clients they actually have. The people I want to help are the potential clients (most of them with middle class incomes and lower) who, despite their incomes, cannot currently afford a barrister, for those potential clients are the ones who face, by far by a factor of 200 to 1, the highest barrier.
Permit me to start with the obvious. Students interested in private practice should first try to get a job in a law firm (apply widely and follow up). If that does not work, they should try to rent space in a chambers set-up or from a lawyer with a spare room (to find them, advertise on the local law association website, make cold calls, talk to people). If neither option is available, and if they cannot initially afford to rent an office, then they should practice from home for a while, and meet clients at their homes or offices. One Ottawa lawyer began by calling himself “The Mobile Lawyer”. He now owns the building that houses his office. Another billed himself as “The Lawyer Who Makes House Calls”. He is now a partner in a busy, respected, five-lawyer firm.
Students should also think about whether the life-long uncertainty about where your income will come from (average retirement age of 75 and a finite RSP at the end) is for them. If it is not, they should try to latch on with a level of government or as in-house counsel somewhere (steady cheques, pensions, benefits, shorter hours, etc.). If they cannot find any position at all, they should aim their anger at the universities with law schools that have, in their self-interest, bloated up far out of proportion to the needs of the economy and also stopped failing anyone since the early 90s. Weirdly, we have evolved a society that rations doctors, nurses and skilled tradespeople, but spews out lawyers far, far greater than population growth. The economy simply cannot absorb them all. Students may not want to hear that, but it is reality.
Further, you say, “it could be a collection of individuals who have faith in the lawyer and want some form of security/ownership/return for the risk they are taking by supporting the set-up and initial operating costs of that lawyer”.
First of all, the set-up and initial operating costs of a one or two -person firm are modest. Likely, the student already owns a computer and smart phone. Add to that a printer and they are in business. To start, they can buy photocopies in bulk for 4 cents a page from a UPS store.
Second, take out the word ‘ownership’, and I have no objection at all to what you say. Let family and friends lend the new lawyer some money. Let them take security in the form of a promissory note (where the new lawyer has no other collateral). Once the note is paid off, the lenders are happy (they got their principal back with interest, and they can take pride in their family member/friend’s success), but the lenders are then gone and, in the meantime, they did not exercise an owner’s right to dictate, directly or indirectly, business imperatives to the young lawyer. So, no, it does not have to be a bank. It just cannot be a co-owner.
“I invite you to pull out from your established, successful small firm experience perspective and consider the bigger picture and how to help the grim realities facing many in the profession, at all ages and stages of practice. While I don’t profess to have any answers, I do profess to having an open mind and being willing to explore options and be solution oriented rather than a naysayer.”
The only thing I say nay to is the selling of our ownership of the profession because of the inevitable cartelization and loss of independence that that entails. I say yay, shouted from the rooftops, to beneficial and effective solutions to real problems not, as I said above, to quack solutions to non-problems. I could not be more solution-oriented. But I am oriented toward solving real problems. Without ABS, we can achieve all the benefits fatuously claimed as possible only through ABS. We do not need to take the irreversible step of selling out. It is totally unnecessary. So why do it? Why do the pushers keep pushing? Myopia. Inability to admit error and retreat from a position publically taken. Desire to line their pockets (they think). Shallow and incomplete analysis. Misguided idealism. And so on. There are no good reasons to support ABS, so the reasons proffered have to be bad ones.
The grim realities you refer to are caused mostly by there being far too many lawyers per capita – a problem that has infected the US legal services market for decades (yet, we cannot seem to learn from the petri dish next door; instead, we just blunder along copying their errors and hoping that somehow, after setting up their legal environment, we will somehow avoid their problems. If it were not so tragic, it would be laughable).
The surfeit of lawyers is the fault of the government for its negligent misallocation of scarce education resources and of the universities with law schools for their naked hunger for tuition and grant money – so naked that they fail virtually no-one. Once you are out their door, they do not really care what happens to you. It is not their responsibility. The only ‘hurdle’ to being called to the bar in Ontario is being admitted into first year law school practically anywhere in the World. Given that the number of undergraduate As handed out at Canadian universities is now 38% of the total marks compared to about 10% when I went through, that means that a B is now an average or even a below average undergraduate mark at Canadian universities; yet, you can attend the University of Leicester Law School (assuming mom and dad can fund it) with nothing more than a B average and no LSAT and be guaranteed to be called to the bar of Ontario because nobody ultimately fails the processes. This is progress?????
I said ‘mostly caused by too many lawyers’. Another part of the problem is that vast hordes of students insist on practicing in cities with law schools in them. Those markets are super-saturated with lawyers. I have to wonder about graduates who got into law school with devalued marks, finished in the bottom 25% of the class that would have been weeded out by Christmas of first year in previous generations, passed a bar exam system that eliminated a teaching portion for most students and that nobody ultimately fails, and then want to practice in a place that is already neck-deep in lawyers. Forgive me, but I do not think we should compromise our independence and engender anti-competitive cartels for them. Or for anybody.
You ask me to “to pull out from your established, successful small firm experience perspective”. If I have a successful small firm, it is because I worked very hard for many years to make it so. I work long hours. I treat my clients well. I meet with them. I do not slough that off onto my secretary. I am scrupulously honest. I do not compromise my integrity for anyone for any reason. I make sure my fees are competitive in a highly competitive marketplace. There are now lots of lawyers in my bedroom suburb community – my advantage is that I built up my client base before most of the other lawyers arrived, but unless I continue to deliver excellent services at competitive fees to clients who are genuinely happy to see me, my advantage would wither.
My community is a suburb, but, in reality, I am in competition with at least 400 lawyers in Ottawa who do real estate law, wills, estates, and small business law, and they are all reachable by phone, internet or short (5 to 35 minutes) drive. Who is Home Depot in competition with in Ottawa? Rona, Homehardware, Lowe’s, Canadian Tire and a handful of specialty shops. Who is Loblaw’s in competition with in Ottawa? Metro, Sobey’s, Walmart, and Farm Boy (the other grocery chains are owned by the big ones under other names). Who is Bell in competition with? Rogers and Telus and a couple of bit players. Who is Chapters in competition with? Not Indigo. Not Coles. Not WH Smith. They are all owned by one owner. Their real competition is Amazon, Barnes & Noble, and, well, who? I have at least 400 competitors all within a tight radius.
I did have one advantage. I articled for and started my career mostly working for a terrific person and lawyer, Richmond Wilson. His partners, such as Martin Monaghan, and others both in the firm and among other colleagues, also helped me immeasurably by their examples and their willingness to answer questions. I still ask questions, 32 years on, and I answer loads of questions.
When I left the firm to start my own, I went to a community that then had few lawyers. I did not stay in the one city block with bad parking that already had 100 lawyers. And then I worked, and I worked, and I worked. I taught law to adults. I gave seminars to real estate agents. At the same time, I had three small children, a student loan, and a wife in a low-paying job. Does the new generation want everything handed to them?
There are innumerable communities across Ontario that are crying for lawyers despite the hordes of graduates over the last decade. At one point not too long ago, either Bruce or Grey County did not have a single lawyer under 50 years of age. What an opportunity! I know a husband and wife pair of lawyers who moved from downtown Toronto to the Lake Huron region. Almost immediately, they were able to buy a house on a rise with a distant view of the Lake and the mortgage payments were less than what their combined parking costs in Toronto had been!
So, young lawyers, get out of Toronto, Ottawa, Kingston, London, and Windsor. Go 90 minutes to six hours away from those centres, and you will do well. And you will not have to give up any pleasures. You will still be able to watch opera and baseball on a big screen TV. Out of the savings of living outside big cities, you will still be able to visit the big city for events like a rock show or the opportunity to subsidize $10,000,000 per annum ballplayer salaries (and, if you combine the trips with a CPD course, you will be able to write off the expense of the trip). And you will not have to be part of a movement that would sell our soul to the anti-competitive forces of giant, remotely-controlled businesses who would then work inexorably toward compromising our independence, and you will thus avoid having the scorn of history heaped permanently upon you.
Cheers,
Brad
In my previous post, I said “So far, it has been an uphill battle to move the focus from selling our soul to working on beneficial and effective real solutions to real problems instead of wasting time on quack solutions to trumped up non-problems.”
I should have said, it has seemed to be an uphill battle. The reality is that lots and lots of people and groups (i.e., the most thoughtful people and groups) share my deep concerns about the issue. Of course, when we put forward thoughtful counter-arguments, we are told we are fear-mongering and that we bear the burden of proving that any changes will cause harm. And we are told that if we do not do this one thing of letting remote, non-lawyers own us, then worse consequences will befall us. Who is the real fear-monger, I wonder?
When we point out that the burden really lies upon those who would toss aside centuries of history on short-term, flimsy evidence, who ignore the actual evidence of heavy consolidations with more to follow, who would saddle us with a change that would be irreversible regardless of how much harm it later engendered, who would risk so much of what the legal profession has stood for, who refuse to work anywhere near as hard on real solutions to real problems as they do on this pig-in-a-poke, then we are met with silence or insults.
All right-thinking people need to stand up and refuse to sell the legal profession to non-lawyers, and help to solve the fixable and real problems.
Brad
RE: ” help to solve the fixable and real problems” that “right-thinking” people identify
Mr. Wright,
The strongest argument for ABS is the glacial pace at which entrenched lawyers such as yourself have sought to fix any of the long-standing problems that the public has been complaining about for years – and years. The middle class have been frozen out of the justice system due to off-the-chart legal fees. I doubt most care whether this continues under the status quo ownership system or a new ABS system in which private interests buy up firms. The middle class has been denied access to affordable justice for years. And it’s getting worse. For them it makes no practical difference whether the reason they can’t afford a lawyer is greedy private (ABS) owners or the current structure. The system you defend has priced the middle class out of the market – made lawyers unaffordable – and to add insult – now moans about how SLRs are an irritant. I can’t count the times I’ve read belittling rants on Slaw in which lawyers portray SRLs folks as being too cheap to pay a lawyer – or too dumb to realize they need one. And how about access to legal aid for the poor – including the working poor? I’ve never heard any Benchers address the fact that the status quo regime has for years been silently watching provincial governments provide nearly free CPMA lawyering to affluent doctors even as the provinces whine about having no money for legal aid. Your high-sounding lament that you don’t want to be “saddled with changes” encouraged by people who don’t give a “pig in the poke” about “what the profession has stood for” would be more convincing to the poor and the middle class if the profession had made the slightest effort to fix any of the “fixable”. Now – faced with the threat of ABS – you say that long-standing access to justice problems are easily fixable under the current ownership regime. So good – hop to it – it long past time to get on with it. The proof of your assertion will be in the pudding. How about the fact that lawyers are silent about the lack of (social) justice – and access to justice – in a system that offers the poor access stripped down legal aid even as it provides affluent doctors with Cadillac tax-payer funded lawyers known to take a money-is-no-object scorched earth approach to litigation against folks who as often as not can’t afford a lawyer. Not to be rude but I don’t think most ordinary (non-lawyer) people who can’t access the justice system are nearly as impressed with it as you are. So as a layperson I say – why not ABS? How could the access to justice system get any worse? Rather than another polemic, maybe you could offer some grounded examples of easily fixable (albeit long-standing) problems that can be fixed without resorting to ABS?
Hi Brian,
You say, “The strongest argument for ABS is the glacial pace at which entrenched lawyers such as yourself have sought to fix any of the long-standing problems that the public has been complaining about for years – and years. The middle class have been frozen out of the justice system due to off-the-chart legal fees.”
You are not a lawyer so you may be forgiven for not knowing the difference between low-cost lawyers and high-cost lawyers and for making the common mistake of lumping us all into one box. The off-the-chart legal fees are found on the litigation side of the bar and in large firms for such things as mergers and acquisitions. Like so many commentators, you mix solicitors in with barristers. Solicitors, especially small firm solicitors, do prevention law and about 90% of the accounts we send out in a year, from start to finish on the file, are in the two digit and three digit range for the entire file. There is no barrier to justice to obtain real estate services, notarizations, and wills and powers of attorney. Those are available at highly competitive, modest rates. Virtually nobody is frozen out of those services. In real estate files, for example, we charge far less than the government in purchases, and far, far, far less than the real estate agencies in sales. Yet, we are the lynch pin that makes the whole system work. A really well done will is two months’ cable bill, often less, and for that you get a tremendous savings when the estate comes to be administered. It is fantastic value for money.
Please stop lumping low-cost, cost-effective small firm solicitor work in with the horrendously costly services of other areas of practice such as litigation. One of my beefs is that ABS is designed to attack those low-cost services by delivering them into the maw of ever-consolidating corporate cartels. And everywhere that has been tried, the result has been higher, not lower, higher costs to the public.
What does cost a fortune is having to deal with barristers – courtroom lawyers – and big firms for any reason. That is what has been priced out of reach for most people. That is what we need to fix. I do not worry too much about the big firms. They mostly work for wealthy corporations, governments and people. If they want to pay those rates, even though they could very often get the same services for less from a small firm, that is their problem. Furthermore, there is an increasing number of nimble small firms that are poaching work away from big firms. I only worry about big firms if big firms take over the work of small firms, because then the cost of small firm work will rise as surely as Tuesday follows Monday.
Now, you do not know me, but I can tell you I have been saying for years and years that something has to be done about the outrageous time and cost of most litigation. I was even consulted, along with 19 other key members of the Ottawa bar, by the Government of Ontario on ways to cut the cost of litigation services. I offered several sensible solutions. The Government has implemented precisely none of them. Yet, they would work. Instead of dumping on me, go pester the Government to listen to people like me.
ABS will not benefit the public. When I quote English experts who say that the “main” benefit of ABS is to allow access to capital to fund even more consolidations, do people not understand what that means? Consolidation means less competition and less competition means higher prices. People are dazzled by the new toy – ABS – but cannot seem to see dead obvious, major and irreversible problems with it.
Go examine the US conveyancing system where something very similar to an ABS model drove independent lawyers out of the market. Prices there did not drop after the lawyers were killed off by predatory pricing. Instead, prices rose substantially after the brief drop that lasted only long enough to kill the lawyers. Small firm solicitors are the best bargain the public has ever had. Don’t kill us with the lunacy of ABS. Focus on bringing down the cost of litigation, and do everything in your power to stay away from big firms.
In our profession, the larger the law firm, the higher the costs to the public. ABS would bring about a great reduction in small firms and great increase in big firms. Remember, small firms, small costs; big firms, big costs. Why would you want any system that hugely increases the number of big firms and entities at the expense of small ones???
You say, “The system you defend has priced the middle class out of the market – made lawyers unaffordable – and to add insult – now moans about how SRLs are an irritant. ”
I defend only the part of the legal system that does, in fact, deliver excellent services at demonstrably fair fees. I do not defend any part of the system that fails to do that. Please make the distinction before you direct unfair accusations at me. If would be very bad for the public if the baby (the low-cost small solicitor services) were thrown out with the bathwater (the high-cost services that cause the legitimate complaints). ABS would be the means to do just that.
I do not moan about SRLs, so please do not insinuate that I do. I say that if we can cut the cost of the typical litigation file in, say, half (and we can with sufficient political will), then we can make those files affordable to, say, twice as many people. I want SRLs to be able to afford courtroom lawyers. It is ridiculous that so many of them cannot. That is the problem we need to fix, and I have been highlighting it for years.
I have not belittled SRLs. I sympathize with most of them. I say most, because some actually could afford a lawyer but they would rather spend their money on other goods and services. That is their choice, but then they should not complain if their case does not go they way they wanted. Most have a legitimate beef, as I have been at pains to show in many of my writings.
I say ABS is a pig-in-a-poke because experts where it has been in place (1) cannot see any benefits to the public other than the odd example which, upon easy inspection, is easily shown to be achievable without ABS, and (2) do see ABS as chiefly a means for funding consolidations – the very anti-public-interest evolution that you should be very keen to fight.
You say “hop to it”, and “get on with it”. To make the changes to the litigation system that I advocate, we need the Government to agree. On several occasions, we have tried to get the government to make changes that would benefit the public. Sometimes they have tried. More often they have ignored us. Go lobby them. But make no mistake. ABS is no panacea. It is not the answer. Selling ownership of the legal profession is certain to do one thing – very, very badly worsen the situation whether through destroying the cost-effective lawyers or by compromising our independence in favour of the profit imperatives of the non-lawyer owners or by severely over time reducing competition as a result of the consolidations that ABS is specifically designed to bring about.
You say, “why not ABS? How could the access to justice system get any worse?” And you accuse me of being impressed with the justice system. In terms of cost of access to the litigation system (which is what people mean when they say justice system), I am anything but impressed with the justice system. I am, however, impressed with those areas of legal practice that deliver excellent services at costs that are so modest and so competitive that the lawyers who practice in those areas can only retire well into their 70s and in considerably less security than a school teacher. Most lawyers do not make the money you think we make. Even the Chief Justice of the Supreme Court of Canada gives speeches about lawyers’ incomes without first deducting the overhead costs. Talk about frustrating. Across the profession, overhead takes about 55% of all fees. We literally earn half what you think we earn. I favour reducing overhead with technology. I have done it myself whenever I can. So have many law firms, and it is increasing all the time, and it is happening without ABS. We do not need ABS to do it at all. Not at all. Yes, some lawyers make a killing, but most do not. Most lawyers make decent incomes but not as much as you think.
Why not ABS? Because absolutely the situation can get worse with ABS. Indeed, it is certain to get worse with ABS. Most people, including many supporters of ABS, do not even know what it entails. Consolidations paid for by gargantuan companies with head offices half a world away or down south are guaranteed to worsen the situation. Do you think that the American or German or Australian or Chinese CEO of a $200,000,000,000 (that billions) corporation headquartered in Switzerland, Barbados or Beijing is going to put the best interests of the Ontario public at the top of his or her list of concerns?? Or do you think he or she will be more focused on the profit margin of the empire on which his or her bonus depends??
You say, “maybe you could offer some grounded examples of easily fixable (albeit long-standing) problems that can be fixed without resorting to ABS”. Gladly. First, for services such as real estate conveyancing, wills, powers of attorney and the like, those services are already offered at fixed fees in a ferociously competitive market and the lawyers in those practice areas are not getting rich. As I have said, the lawyers in those areas would have been far better off financially by becoming elementary school teachers or taking other civil service positions. So do not try to replace the many thousands of independent lawyers delivering those services with an ever-reducing number of giant corporations. You will bitterly regret it if that were to happen.
Second, I say that litigation (which is where, overwhelmingly, the barriers and ruinous costs are found) involves too many stages – pleadings, discoveries, mandatory mediation, pre-trials and trials, not to mention the endless emails and letters between or among the lawyers. Each stage is separated from the previous and next stages by six months. The lawyer is carrying many files. When the next stage in your file arrives, the lawyer has to prepare again because if he shows up unprepared, you will not thank him. Preparation takes time, and time is money. Pleadings and trial stages are essential. Discoveries are useful. Mediations and pre-trials are money burners. I say, get rid of the mediation stage and the pre-trial stage. Reduce discoveries, except in exceptional cases, to one day per side. Require the parties to exchange their best offers to settle. Then, have the lawyers work out the final settlement and, if they fail, have them, just them, appear at an explanation hearing to justify why they have not resolved the case yet, and be faced with costs against them if they have a poor explanation. I also say that on the date the pleadings are issue by the court staff, the court staff should impose a hearing date on the lawyers that is 90 to 18o days away. Resolve the case in that time, at far less cost because of the far less time involved, or explain yourself before a grouchy judge.
I used to do litigation and I have been exposed to all kinds of litigation since as an observer or as an expert witness. Regardless of the sums and issues involved, it is almost never difficult to figure out what a fair and sensible resolution would be at a quite early point in the process. I say get rid of steps that serve only to delay getting to that point. ABS is certainly not the means of producing that result.
We can make the necessary changes, but only with the agreement of the government, without selling our independence to non-lawyer owners (which is what is largely meant by ABS). And believe me, you benefit from the independence of the legal profession in ways that you cannot imagine. Any attempt to compromise that independence is a crime; worse than a crime, it is a blunder, and you, dear public, will pay the price. Do you think that the pushers of ABS expect their incomes to go down if we sell the profession to gargantuan accounting firms, insurance companies, investment houses, and venture capitalists? They sure don’t. So be very wary of claims that ABS will benefit the public when those claims are being made by people who fully expect their incomes to go up under an ABS model.
No offense, but there is too much public ignorance about the issues and even about the differences between solicitors and barristers, and that ignorance is harming you. The media are partly to blame because, whenever they rant on about the high cost of lawyers, the only examples they ever give are the court/litigation based examples (barrister work). The small firm solicitors get tarred with that brush most unfairly and to the immeasurable annoyance of the small firm solicitors.
Lastly, I want to point out that most barristers work themselves to death trying to do the best job they can for their clients. Without barristers, there would be anarchy as the public tried to resolve their disputes with baseball bats. If barristers did not exist, we would have to invent them or call them by some other name. But, and it is a big but, if you have far too many barristers per capita (as they do in the US – a disaster we are hell-bent on copying in Canada), then the cost of each litigation file does not go down. It goes up. The reason is that if you have too many barristers, they each have too few clients (under the current system, the SRLs are not enough to make up the difference), and that means they have to make their livings off too few clients, and the temptation is to drag out the case, and each client ends up paying too much. The barristers do not sit down and callously plot this out. Rather, the system encourages dragging out the files, and the system is set up by the government. The government is also largely to blame for the skyrocketing number of lawyers. The government would prefer to ration doctors and spew out lawyers. Both trends harm the public in ways that would take a book to describe.
Anyway, enough for now. But please stop lumping low cost lawyers in with litigation lawyers, and please do everything you can to ensure that those low cost lawyer do not disappear into the maw of anti-competitive cartels. In other words, fight ABS and lobby the government to reduce the stages and time involved in litigation.
Brad
Brian,
You should also know that the huge rise in SRLs has occurred virtually in lock-step with the huge rise in barristers per capita. They are connected phenomena; yet, the solution advocated by those who do not understand this is to spew out even more lawyers per capita. One of the worst things to befall a society is too few lawyers. Right behind it is too many lawyers. A balance is needed. China, with one lawyer per 50,000 citizens, has not found it. The US, with one lawyer for every 289 citizens, has not found it. Ontario, with one practicing lawyer for every 466 citizens, is in the process of losing it, and no-one is paying any attention. If a very high number of lawyers per capita would bring down the cost of legal services, then the US would have the lowest cost legal services in history because they have the highest number of lawyers per capita in history. Instead, they have the highest cost legal services in history. No-one paid any attention to balance there either.
Also, the Government of Ontario is to be commended for keeping real estate lawyers in the picture. To the very great benefit of the public, the Government refused to allow the billion dollar American title insurers to do purchases and sale. Further, the Government has set up the litigation system with all the stages, to try to encourage settlements without trials. They worry that removing stages will lead to more trials and greater expense to the Government and the taxpayers through an increased need to pay for more judges, more court staff, and more court rooms. I think those objections are addressable, for example, through better use of offers to settle, and by realizing that, even if more judges have to paid for, the real but less easy to measure savings would more than compensate. Those savings include (1) greater workplace productivity on the part of litigants whose stress levels would be significantly reduced by a reduction in the cost and the truncation in the time they spend in the litigation maelstrom, (2) less domestic upset for the same reasons, and (3) fewer visits to health care professionals for stress related issues again for the same reasons. It is human nature to prefer what is regarded as a measurable outcome over a difficult to measure outcome. That does not change the fact that the immeasurable outcomes are as important if not more important than the measurable ones.
Lastly, for today, big box stores can sell widgets, made by uneducated, underpaid, nonunionized Asian workers, and thanks to economies of scale pass along some savings to the North American public. But legal services are not widgets. There are people who do not practice real estate law or wills law who erroneously think that those services can be commoditized. There are even a few people selling those services who claim to believe it too. They are either innocently ignorant or deceptively self-interested. Yes, lawyers can outsource some work such as legal research, and the profession takes advantage of that, to the client’s benefit, where it makes sense to do so. But we do not need ABS to continue to do that. What cannot be outsourced properly is the direct interaction with the client when direct interaction is the best way to provide the needed services, including the aspects of the service that never crossed the mind of the client.
Brad
Hi Brad,
While I appreciate your passion, I believe your concern about cartelization is misguided as it is effectively already happening without ABS. Just look at the regular and ongoing mergers within the legal industry (from local to international markets). What is stopping that?
In addition, whether you are a sole practitioner or a partner in a multinational firm, I can guarantee that money is a focus for each, as it should be or they wouldn’t be in business/practice. I can also guarantee that there are many greedy lawyers in our current non-ABS environment and I fail to see how ABS will make them greedier or create more greedy lawyers. Further, our current non-ABS environment isn’t stopping accounting firms, legal publishers, technology providers, low cost alternatives like Wal-Mart and so on from moving in and taking over work that lawyers have traditionally provided. They, like lawyers, are focused on money and many of them are greedy too – it happens in a capitalist society. If structured properly, ABS could help curb some of the greed.
So, given the evils you are so wary of are already well entrenched, why don’t we focus on tangible issues like figuring out how to address the vast underserved market that lies between the purchasers of your wills and the multinational conglomerates who you seem to believe are price insensitive (I can assure you more and more of them are not and large firms are under mounting pressure to reduce costs).
We are in a mature legal market that isn’t sustainable for many of the reasons you point out. Many changes will be required by many people, in academia, government, private practice, in-house, corporations and the public at large. The inability and/or unwillingness of these stakeholders to work together to identify, craft, accept and embrace much needed change will be the death of the legal profession as we know it. The vultures have already started circling as seen by the many non-traditional providers of legal services that are emerging and thriving to create even more competition for lawyers.
I for one am not willing to close my eyes and cling to the past model in the hopes that the tempest will pass. I am willing to examine all parts of the legal structure and ask why again and again in order to uncover and craft better approaches. I do not accept that lawyers are not clever enough to learn from past mistakes and avoid repeating history. I do not accept that they are all motivated by greed and that greed will prevail.
While you have railed against ABS, I am not swayed by your arguments and respectfully agree to disagree. I for one am happy to explore and consider forms of ABS that, with appropriate protections, may well provide much needed benefits. So I bid adieu as I withdraw from this exchange in order to focus my time and effort on developing and implementing tangible solutions for my clients in particular and the legal industry in general.
Best, Melissa
January 22, 2015
Melissa,
I can prove to you that the American regulators and courts themselves say that an ABS type scenario shoved US lawyers out of real estate to the great profit of the US title insurers and to the great detriment of the US public, but you are not swayed. I can quote you the opinions of the English experts themselves who say there is little or no public benefit from ABS and that what it mostly does is provide funding for ever greater (anti-competitive) consolidations, but you are not swayed. I can explain the dead obvious that the only reason the non-lawyer investors would even invest would be to make a healthy return which does nothing except add a significant cost layer to be borne by the public, but you are not swayed. I can say the dead obvious, historically proven and irresistible truth that, to the extent you give up ownership, you give up independence, partially immediately and increasingly over time, but you are not swayed. I can show that all benefits claimed for ABS are achievable without selling our ownership (so why would we sell?), but you are not swayed. Experts in the jurisdictions that have it have not seen any major benefits to the public, only a tremendous amount of consolidation that far, and dangerously, exceeds the organic consolidation that sometimes occurs and reverses within the legal profession, but you are not swayed. Non-lawyer owners, looking for good returns on their investments, will place ever more pressure on lawyers to generate the cash to fund the returns as proven by economic fact, theory, common sense, and history, but you are not swayed. By all means, respectfully withdraw from the discussion if mountains of evidence, history, and candid comments from profiteering insiders cannot sway you.
Why would we add yet another layer of greed or profit-seeking to what already exists? Walmart does not own the law firm; they are merely renting space to the law firm. Nothing wrong with that. But what if Walmart did own the law firm and then offered (lousy) legal services as loss-leaders to sell more groceries? It will not be litigation services that they will loss leader. Then, along with a handful of other such corporations, having driven the small firm solicitors to extinction – the ones who deliver the most affordable, cost-effective legal services – they will then begin to forever charge far, far more for those same services than the small firm lawyers ever did. What do you say to that? What do you say to the fact that that has already happened in a major area of law in the US? Do you really think that, having given them the wedge, that they would not find ways to widen it to their profit and to the detriment of everybody else?
I do not say that the conglomerates are price insensitive. I say that, as history has shown, they will loss-leader the lawyers out of the way, and then badly overcharge the public ever after. History proves it. Myopia does not disprove it.
I keep making these demonstrable points, and the ABS pushers simply ignore them, so blind are they and so married are they to a terrible position that they are now publically identified with and believe they cannot retreat from.
My eyes are not certainly closed and I am not clinging to the past. I have embraced technology innovations my entire career and look forward to embracing more. I see very well that, other than for misguided true believers, what is really driving ABS is greed by some lawyers who see the killings firms like Slater and Gordon are making, and greed by the corporations who cannot believe we would be so stupid as to turn over our profession to them. You even call them vultures. Do we sell to vultures and allow them to influence us with their vulture ethics, or do we protect our profession from vultures by addressing the one area (litigation) that constitutes 99% of the problem?
OTLA and others have reviewed what is happening in Australia. Great consolidations, with more to come, and minimal public benefit. Even the number of smaller start-ups there have not needed non-lawyer ownership to become nimble competitors. So why would we give up ownership?
I have not met one ABS supporter who thinks ABS will reduce their annual incomes. So who is going to pay for the sustained or increased lawyers’ incomes as well as the new layer of the investor profit takers? You? I don’t think that’s your plan. So who? The public, that’s who. And those profits will mostly go to the nonlawyers. They will see to it. And those nonlawyer investors, for the most part, are 20 times larger than even the largest law firms. Who do really think will control the situation? The puny lawyers in a minor department of the 150 billion dollar multinational? Forgive me but selfishness on the part of short-sighted opportunists is no reason to compromise the hard-won independence of the legal profession.
I agree changes are needed and I have long campaigned for them. They are badly needed in the areas that have proven to be sky-high barriers to access, and those areas are overwhelmingly the litigation areas. I have made numerous calls to the benchers, the Law Society and the profession to apply our talents and resources to solving real problems, not waste our time on fake ones. I have made numerous suggestions on how to reduce the ruinous cost of litigation. I invite you to spend your time dealing with the real problems.
Brad
Hello again Mr. Wright,
RE: “Do we sell to vultures and allow them to influence us with their vulture ethics, or do we protect our profession from vultures by addressing the one area (litigation) that constitutes 99% of the problem? OTLA and others have reviewed what is happening in Australia. “
First, thanks for taking the time to take me to school on the myriad of facts and distinctions that, as a layperson, escape me. Let’s zero in on one area of litigation in the hope of grounding the discussion in real, messy particulars of excessive billing as a serious issue rather than the view from 30,000 feet up. I’m accept your assertion that “the one area that constitutes 99% of the problem is litigation”. I’ll ground my ABS argument in personal injury law – its the only area I know anything about. Here’s the thing: personal injury is a subset of that “one area” you say is causing the lion’s share of the problems. CANLll is awash in cases of aggressive over-billing. The issue has spilled into the mainstream press and more and more often the public, with their Sunday morning coffee, read periodic columns chronicling examples of off-the-chart overbilling replete with “greedy practices”. So what specifically do you suggest ought to be done to reign in this greed? Do you agree with OTLA’s assertion in the current issue of Law Times that there are no access to justice problems in the Ontario personal injury context? That could be, given you say that “OTLA and others” have studied the ABS and use OTLA’s trial lawyers’ stance to support your own – even as you say litigators are the heart of the problem. Do you omit OTLA litigators from your “one percenters”. Here are a few columns written by Alan Shanoff, a legal columnist who contributes to both the Toronto Sun and to Law Times. Many more example can be found on the FAIR (an advocacy group for auto accident victims) website lawyer page. In terms of what you call “vulture ethics” – I wonder if unsophisticated, often highly vulnerable accident victims, would be any worse off if say, Slater Gordon, replaced the personal injury status quo in Ontario. What do you think Mr. Wright? What, short of ABS, should the public (laypersons and potential clients of personal injury litigators) look to as a remedy for the sorts of problems articulated in the columns referenced below? Or is Mr. Shanoff overstating the problem.
http://www.torontosun.com/2013/02/08/legal-fees-out-of-control
http://www.torontosun.com/2013/02/01/contesting-legal-fees-can-be-a-slow-process
http://www.torontosun.com/2011/09/23/the-high-price-of-justice
(http://www.torontosun.com/2014/12/26/lawyers-billing-badly)
Mr. Wright,
In opposition to ABS OTLA argues (in Law Times) that contingency fees are the “ultimate message” for access to justice. But not everyone would agree (see judicial commentary below). Do you think CFA’s are the ultimate fix for excessive billing by litigators. Surely we must listen to the judges who speak to the public through their decisions if there is to be any hope of honest and meaningful dialogue on all manner of access to justice issues – including the cost of personal injury lawyers – including in the context of (not always “fair and reasonable”) CFAs – and including all manner of alternative delivery structures – including ABS.
St. Jean v. Armstrong, 2015 ONSC 13 (CanLII)
[11] Counsel is seeking costs of one-third of the damages awarded in the AB claim and the tort claim pursuant to the contingency fee agreements signed by Claude Pothier on August 1, 2006, and January 30, 2014. This latter agreement expands the original agreement by explaining that the fees on the tort action and the AB claim would be subject to the one-third amount. This results in fees of $466,000, HST of $37,280 and disbursements of $84,510 for a total of $587,790.
[23] I have no hesitation in approving the awards made, both on the tort action and the AB claim. What has concerned me, however, is the amount of fees being suggested by the law firm.
[24] I appreciate that this settlement came about as a result of a global resolution of the tort action and the AB claim. However, this does not mean that I am obliged to award fees on the global resolution.
[34] Considering that these dockets were reconstructed and not made contemporaneously at the time the work was done, little weight can be placed on the estimate of the time involved.
[52] The sum of $280,500 is sought for legal fees in connection with the AB claim pursuant to the contingency fee agreement. Having considered all of the evidence and the legal principles, I conclude that there should be a reduction on the fees proposed on the AB claim. In my view, counsel has not succeeded in proving that the contingency fee agreement was fair and reasonable under the circumstances. Accordingly, fees for the AB claim will be fixed at $170,000, inclusive of HST, and fees for the tort action will be fixed at $183,333, inclusive of HST, for a total of $353,333.
[53] Disbursements are fixed at $84,510, inclusive of HST.
Sealing Order
[55] Wallbridge, Wallbridge also sought an order sealing the notice of motion, the supporting affidavits of Mr. Wallbridge and Mr. Pothier, the minutes of settlement and the judgment. The basis of such a request is solicitor/client privilege and that these matters ought not to be disclosed to the defendants nor to the public.
versus:
http://www.lawtimesnews.com/201501194420/headline-news/why-is-personal-injury-bar-so-against-abs
“The vast majority of personal injury lawyers work on a contingency-fee basis, Gluckstein notes, something he says is “probably the ultimate message for access to justice.”
Mr. Wright,
This last and then no more from me.
Here’s another rampant access to justice issue in the area of personal injury. OTLA argues (below) that personal injury litigation is “inherently expensive” due to “vagaries of the process”. Arguably, one such vagary is the way cases are delayed for years and years due to costly (and probably endless if triers of fact didn’t finally put an end to them) assessment battles between professional vendors of medico-legal opinion evidence. Several years ago Justice Osborne mentioned the “proliferation” of “hired gun” experts in the driving up costs in the Ontario personal injury system as one of many troublesome access to justice issues. Since then there has been periodic hand-wringing in the form of columns about how to fix the problem (“hot-tubbing experts”, etc). But for all the talk nothing ever changes. Consider: several years ago the Medical Post did a series of columns on the Ontario medico-legal expert witness bizz. The point of departure for the first column (Examining the examiners) was a look at the harm suffered by a women who had been put through 48 medical assessments. Now I ask you: where but in the world of costly, protracted litigation do injured patients get examined by forty-seven expensive (“hired gun”) second opinion vendors at the behest of lawyers? So let’s skip forward to the here and now to see how much progress has been made regarding “expert witness battles” as an access to justice problem. Judging by the very recent case (further below) involving “47 reports” – not a lot of progress has been made. Call me overly-cynical but at some point one has to ask if the entrenched regime has the slightest desire to get the costly battle of experts “vagary” under control. So far in this discussion (after 63 posts) I haven’t seen anybody refer to what the judges have to say about any of the array of various long-standing access to justice problems. Surely we should listen to the judges? OTLA has yet to make any efforts to lobby for the purging of rogue experts to lessen litigation delay due to protracted expert battles. This is an issue getting play in the mainstream media (newspaper columns etc.). Only a couple of days ago the CBC’s Ontario Today did a segment entitled “so you think you are covered” and their lines instantly lit up with (former and current) accident victims calling in to complain about the years and years of denial and delay they endured – sometimes over a decade – as there cases dragged on and they were worn down by the “inherently expensive” vagary of medico-legal expert assessment treadmill which drive personal injury litigation. How is one to reconcile all this with OTLA’s assertion that personal injury has no access to justice problems? What’s the point of hoping for fixes from within the system when some fixers within the system (in this case OTLA)argues that there is no access to justice problem needing to be fixed?
http://www.lawtimesnews.com/201501194420/headline-news/why-is-personal-injury-bar-so-against-abs
“Certain litigation is inherently expensive. The costs are driven by protracted timelines and other vagaries of the legal process itself. ABS will not materially contribute to the efficiency of the legal process or reduce the costs inherent in the litigation model, without the nature of litigation changing dramatically.”
…………….
Vadivelu v. Sundaram, 2015 ONSC 331 (CanLII)
[12] During the course of the litigation, 47 reports have been delivered to Mr. Sundaram. Many of these reports reveal that Mr. Vadivelu’s psychiatric or psychological condition was of very serious concern. Dr. Corbin’s Report should have come as no surprise. In my opinion, if Mr. Sundaram had any reason to doubt the various medical assessments about Mr. Vadivelu’s psychological state being delivered during the course of the litigation, Mr. Sundaram knew or ought to have known long before Dr. Corbin’s Report that a defence medical examination would be prudent and necessary
January 23, 2015
Hi Mr. Francis,
It is a fallacy that Australian lawyers are any better or worse than Ontario lawyers. They are as motivated by altruism and greed and everything in between as Ontario lawyers are. Adding an additional layer of people and entities (the outside capital investors) who have to be paid on top of the lawyers who have to be paid does not bode well for reducing costs to the public. Slater and Gordon is making a fortune. Who is paying for that? Their clients. There is no evidence that ABS was needed to assist the clients. All ABS did was allow S&G access to capital which they have used to bloat up in size at a prodigious rate by buying up current and potential competitors. And they make no bones about their continuing efforts to do just that.
Slater & Gordon and just two other Australian firms now have almost 50% of their core (personal injury) market. That has been “achieved” in just a few years. The situation is not in stasis contrary to the, frankly, delusional claims of some ABS supporters who make snapshot analyses and ignore trends (and the trend is clearly toward increased consolidations). In the coming years, by using the money they are raking in, those few firms will continue to buy other firms. It is not unrealistic to suggest that within ten years, there will three or four firms controlling 90% of the Australian personal injury market. What happens to competition then?
In the UK, an early ABS opportunist predicts that in less than ten years, the entire personal injury market will be controlled by six firms, and that is in a market of 60,000,000 people. Our Ontario market is 1/4 that size. How many such firms can Ontario support? Four? Even four might be optimistic. What happens to competition then?
S&G and others like to trumpet “fixed fees”. In practice, the fee is either (1) high enough to ensure that the lawyer will not run out of retainer before the case is resolved, (2) contains qualifications allowing the lawyer to require another fixed fee whenever the first one is getting low, or (3) runs out before the fixed fee paid by the client on the other side runs out leaving the first lawyer with the spectre of having to work for nothing for an indeterminate time. How invested will the first lawyer be if he finds himself working for weeks and weeks for nothing when he has other files with money in the trust account to work on? Does the client benefit from a distracted lawyer who now has a heavy incentive to “recommend” a poorer settlement just to cut his ongoing time losses?
Fixed fees (which are not the same as contingent fees, see below) are largely a gimmick in litigation. In my practice, small firm solicitor (real estate, wills and estates and small business law), 90% of the files I work on feature a fixed fee, but my kind of practice is very different from the open-ended and unpredictable nature of litigation.
I know there are problems in the costs of litigation. We all do. I and many others have been calling for something to be done about them literally for years. But selling ownership of the legal profession to nonlawyers who want hefty returns on their investments is most certainly not the answer considering that it will worsen, not improve, worsen the profit motivations/greed in the process (more layers of entities to pay), and considering that it will most certainly weaken the independence of the legal profession to the profound detriment of society, and considering that the access to outside capital will serve only to greatly accelerate anti-competitive concentrations (a trend various ABS insiders and observers in the UK candidly admit is happening and one they candidly admit that they are working hard to accelerate).
In personal injury law, more and more of it is being done on a contingency basis. Therefore, the cut of the law firm is a pre-determined percentage based on the amount of the recovery. In those arrangements, the client can have no complaint. If there are personal injury firms gouging the public, they are not going to last in the face of competition from increasing numbers of firms willing to do the work on a contingency basis. We do not need to sell out the profession to achieve that. One way to help vulnerable clients is for the Law Society to enhance its public education initiatives so that people will learn, before they even become vulnerable, that there are options such as contingency fees available.
As an aside, you should know that what contingency fees do is transfer more money from the public and the insurance industry into the hands of the legal profession. In Canada, we have not had the length of experience with contingency fees as Americans have had. In the US, there are 40,000,000 Americans who cannot afford to pay for medical insurance. Do you know why? It is because the insurance premiums are so high. Do you know why they are so high? It is due to the contingency fee world in US tort law. There, the courts have to award much higher amounts (close to double) to ensure that the client gets what the client needs because the courts know that a very large percentage (nearly half) is going to the lawyers. Who pays for those much higher court awards? Mostly the insurance companies. Where do the insurance companies get the money? From the premiums. Who pays the premiums? The public. Who was high contingency fees supposed to benefit? The public. Who has a hard time paying the high insurance premiums? The public. American health care costs would plummet if the Americans reduced contingency fee percentages (our rate is already about 40% lower), put a cap on general pain and suffering damages (we have a cap in Canada of about a quarter million dollars), and otherwise amended the tort system to shorten the time and stages it takes to resolve the cases.
So, not even contingency fees are the best answer to the high cost of litigation. The best answer, by far, indeed, really the only answer, is to reduce the time and therefore the cost of resolving litigation disputes. See below.
I continue to maintain that we need to be applying our time, talents and resources to dealing with exactly the concerns you have. Instead, we have been wasting our time on unnecessary, irreversible and provably harmful ABS schemes.
If it were not for the ruinous cost of litigation, the conversation about access to justice would not even be happening. ABS does little if anything to bring down those costs. What it does do is attack the low-cost services of small firm solicitors, allows giant entities to, perhaps slowly at first but with increasing speed, wipe the market clean of all those pesky, independent little law firms, and then grossly overcharge the public for those services forevermore (i.e., exactly what the US title insurers did to the US lawyers and then to the US public – why in God’s name would we want that here?).
You ask for my solution. Here it is.
The only effective way to bring down the cost of litigation (the barrier to access to justice that dwarfs all other real and imagined barriers by a factor of at least 200 to 1) is to shorten the time it takes to resolve the cases. As long as the system remains the way it is, players in the system will use (take advantage?) of the system, and if that means spending prodigious amounts of time navigating the system, well, it’s what the government, elected by the people, wants, isn’t it? Can’t be all that bad a system if the government, elected by the people, refuses to do anything about it? Right? Note that the people who set up the system have not done so with malice or mischief in their hearts. They really thought they were setting up a good and defendable system.
Shortening the time can only be done by eliminating various of the stages required by the Rules (set up by the government by legislation and regulations) between opening the file and having a judge pronounce on it. That can only be done, realistically, by having the Law Society strike an effective committee to come up with effective recommendations to take to the government. I believe the government would listen to the Law Society if we (I am a life (non-voting) governor of the Law Society) were to show them how to change the system to reduce the cost (time and stages) of litigation.
But here is the problem. The Law Society is governed overwhelmingly by litigation lawyers (and a super-good bunch they are too both as people and as lawyers). Thanks not to so much as a smidgen of evil intent but to normal, understandable human nature, they do not really see, when push comes to shove, the need to do much about the litigation system. Without malice, too many of them (there are several heartwarming exceptions) see ABS as a way of being seen to be doing “something” about access to justice but without having to tamper with the real barrier and, well, if the low-cost small firm solicitors are badly harmed, well, they didn’t really mean to do it and it wasn’t their fault, and, well, that’s progress isn’t it?
Some members (again, there are heartwarming exceptions) of another group, who tend to have government paycheques, guaranteed life-long fully indexed incomes, pensions and benefits, and have never spent one minute working in a small law firm, support ABS. Why? It is a mystery to me. Many of them self-identify with the Left; yet, there they are supporting the deliverance of the legal profession into the hands of gargantuan, multi-national, largely foreign controlled and foreign incentivized corporations and venture capitalists on the delusion that legal services is the one area of activity where those mega-corporations and venturers will not behave (or can somehow be forever stopped from behaving) the way they behave in every other area they are active in. Talk about helping the 1% become the .1%. But, while I have usually admired their idealism, I have long ago given up trying to understand the “logic” of the far Left. Too often, their idealism coupled with their poor analysis have paradoxically harmed the very people they sought to assist. Their hearts are in the right place, but they badly damage their intended beneficiaries. Think of the decision by the Ontario NDP government to reduce the number of medical students as a way to enhance the delivery of health care! Even as the boomers are aging! Despite their good intentions, they have caused more medical suffering (by impairing access to doctors for the better part of a generation) than any government in Ontario history. I think of such harmful do-gooders as Saintly Sadists.
By the way, I am as socially liberal as they come (let gays marry – they are not hurting anyone; legalize drugs and spend the savings on treatment; keep non-violent criminals out of jail as much as possible and make them pay off their debt to the victims and society, and so on). I am, however, a fiscal conservative, and I prefer to base my analyses on real logic grounded in the real world.
By the way, when the NDP cut the number of medical students, the universities turned to their law schools and told them to stop failing any law students to make up for the lost tuition and grant revenue (and the law schools collective bloated up in size to more than make up for the lost medical school revenues). As a result of the hideous decision to reduce medical school enrolment, we now have far too few doctors per capita and far too many lawyers per capita, and both situations are demonstrably very harmful to the public and our society. Maybe we get the government we deserve, but that is not a topic for today.
Thanks for writing.
Brad
This thread has got to have set a record.
66 comments?!
Getting through this debate is like moving a mountain with a wheel barrow. The blog forum can hardly sustain the sheer mass of this discussion.
I just pasted Mitch’s original post into Word to see a word-count. 952 words is a moderate length blog. It fills about 2.5 pages in Times New Roman 12 pt font, 1.5 line spaced—the same specs as required for printed documents at the Supreme Court of Canada.
Can you guess how many words the aggregate comments amount to (including time stamps and names)?
49,052 words.
114 pages similarly formatted. That’s about three times longer than your typical factum.
Indeed, nothing like a rambling 114 page digression on the taxies, walmart, the magna carta, international capitalism, prohibition and NDP health policy to really drill down on the issues around allowing law firms to adopt mainstream business structures. Glad to see that the people regulating our profession have such clear-headed thinking on the subject.
Mr. Wright,
You write “As a result of the hideous decision to reduce medical school enrolment, we now have far too few doctors per capita and far too many lawyers per capita, and both situations are demonstrably very harmful to the public and our society.”
And yet in another forum (Law Times) where a simultaneous (albeit much briefer) ABS discussion is taking place – the most “liked” comment – comes from the OTLA camp: “increase the number of lawyers” as a “solution” to access to justice issues (scroll to bottom).
I agree with you that more lawyers won’t help. I agree with you that changes are needed to speed up the process – but nothing is being done to clean up the proliferation of doctors who live in a witness box – one of the biggest causes of litigation delay and spiralling costs . Perhaps we could solve the “too few doctors” problem if the system purged some of the hired gun expert witnesses who prostitute their medical licences to personal injury defence and plaintiff lawyers. For many of these vendors of expert medico-legal opinion evidence – actually treating a patient (versus selling second opinions to third parties) – is a distant memory. Alas, in the personal injury system – vendors of medico-legal accusations of malingering (no matter how flawed) are cash cows for the lawyers. They give rise to protracted litigation via duelling experts by the score. There is no desire on the part of lawyers to lobby seriously and vigorously to clean up the Ontario IME/IE expert witness system. In fact, the Ontario personal injury auto insurance system has become so bogged down with delay that the Ontario government now seeks to curb access to the courts for injured auto accident victims Bill 15). The irony is that their plaintiff lawyer indifference to languishing cases has finally come back to bite them in the ass. Not surprisingly OTLA camp has just announced a constitutional challenge. The willingness of personal injury plaintiff and defence lawyers to let cases languish in the system for so long is what prompted the government’s move to restructure the FSCO adjudication system. Seems to me the personal injury lawyers are the authors of their own (their clients’ actually) misfortune. Yet injured claimants are now asked to believe the simplistic notion that the Liberal government is the bad guy and that OTLA lawyers are their “fearless champions”.
It would be one thing if, in the personal injury context, excessive fees were reserved for stellar lawyering. But some of the worst CANLll examples of overbilling are the culmination of poor lawyering. You and I come at this from very different perspectives. I think you are right when you say that ABS won’t put an end to off-the-chart billing by litigators (including the OTLA lawyers who inhabit your 1% of lawyers causing the lion’s share of the problems). That said – I still like the Walmart option for ABS as an alternative to the current personal injury law delivery system. Why? Because then people shopping for a personal injury lawyer wouldn’t be fooled into believing that the current personal injury delivery system is guided by professional and ethical standards rather than the unbridled drive for ever-greater profit. Walmart doesn’t pretend to have some higher, loftier motive. Walmart would say – here’s how much lawyers in this aisle cost – they are non-returnable and non-refundable. It’s buyer beware at Walmart and nobody pretends otherwise. That alone would be a refreshing change from the current scenario in which injured accident victims now pay about the same as what the ABS Walmart folks would charge. And Walmart wouldn’t pretend that their unsophisticated injured clients need not worry about excessive billing (due to promised LSUC oversight or ethical prohibitions). Prospective clients at Walmart would know that shopping there for a personal injury lawyer is a “buyer beware” enterprise. Hell, I’d be willing to pay more just for Walmart’s refreshing absence of hypocrisy.
http://www.lawtimesnews.com/201501194420/headline-news/why-is-personal-injury-bar-so-against-abs
Bob Munroe 2015-01-19 13:28
ABS is being proposed as a solution for “access to justice” issues but there is no evidence to support this. The LSUC should focus its energy on lobbying for increased legal aid funding, student loans for law students to increase the number of lawyers and simplification of procedures to help self represented people. ABS is about “access to profits” for giant off-shore law firms and their investors not about “access to justice”.
Nate Russell and Bob Smith are right. And most of these ramblings comes from one poster, Bradley Wright. I think that his strategy is to drown out everyone else with treatises on the entire history of the judicial system, beginning with, as others have mentioned, the magna carta. Oh, what stunning relevance the Magna Carta has to an access to justice debate in 2015!
I’d also mention that, lost in all of the irrelevant ramblings, is Mr. Wright’s “solution” to the problem:
“That can only be done, realistically, by having the Law Society strike an effective committee to come up with effective recommendations to take to the government. I believe the government would listen to the Law Society if we (I am a life (non-voting) governor of the Law Society) were to show them how to change the system to reduce the cost (time and stages) of litigation.”
Yes, Mr. Wright’s idea is to strike a committee. That seems to be the only thing Law Societies are good at, so why not?
There are plenty of law graduates in Ontario who can’t get articles, and plenty of new calls with very little to do. Assuming we all manage to retrain ourselves to be personal injury sole practitioners (I do, admittedly, have the time), I’m not sure how that’s going to pay off our debt any time soon. If anything it would probably increase it in the medium term.
Dear Mr. Russell,
49,052 words are a lot, but it is the most important issue to come along in over a century. How about these words? Defeat ABS for the colossal error that it is.
Not enough words? Try:
ABS is an irreversible blunder of stunning proportions that will do nothing for the public except to harm them thanks to increasingly anti-competitive concentrations and loss of independence for the legal profession. It should be seen for what it truly is – the worst idea to hit the profession in centuries and a means for an increasingly small number of people to rake in cash at the expense of everybody else. The real problems, as opposed to the fake problems, can be addressed only by tackling the ruinous cost of litigation and that can best be addressed by shortening the time to resolve litigious disputes. By all means, let us work to reduce that time, whether by removing unnecessary stages in the process or by reducing the use of 47 experts per case. To do that, we need a committee dedicated to producing that result and to making workable, sensible recommendations to the government. To date, we do not have such a committee, making it virtually impossible to get the government to budge. In the meantime, we can improve our public education initiatives including advising the public on how to find the majority of lawyers who do great work for their clients at reasonable fees, how to recognize and avoid the minority of lawyers who either do lousy work or who overcharge, and how do deal with lawyers who have overcharged.
Mr. Smith, you are a tax lawyer in a big firm. Therefore, you are not accessible to 99% of the corporate and individual population of Ontario. You have a whopping big billing target to hit, and your firm likely has a significant litigation department that benefits from the all steps and stages, delays and costs inherent in the litigation system.
Clearly, some big firms foresee themselves as being able to bloat up and profit as Slater and Gordon have done, and that is the extent of their thinking on the issue. I cite you the Volstead Act as one example of a terrible change in the law, and you miss the point and pooh-pooh it. That is typical of ABS supporters. They cannot deal with the legitimate criticisms of it, so they pooh-pooh them. You are also guilty of snapshot analysis when you earlier said that the number of current consolidations was not evidence that great consolidations would continue. You wish to stop the trend on the day of your analysis without considering that the trend will continue, and without bothering to acknowledge that the UK experts, including some big winners out of ABS, predict that the trend will continue and that they are working hard to accelerate it.
If you do not understand how hard it was for the legal profession to achieve independence and how hard it is too keep it (it is in the process of being lost in two common law jurisdictions already), then you cannot be expected to understand just how easily it can be lost. Such myopia is hard to deal with.
You say, “Indeed, nothing like a rambling 114 page digression on the taxies, walmart, the magna carta, international capitalism, prohibition and NDP health policy to really drill down on the issues around allowing law firms to adopt mainstream business structures. Glad to see that the people regulating our profession have such clear-headed thinking on the subject.”
First, the 114 pages are not all mine. What I am doing is addressing the mountains of misinformation, ghastly logical and factual errors, and, frankly, the self-interest of some, put forth by others. You miss the point of the taxi analogy. You miss the point of the Walmart references. You discount the power of money in eroding our independence. You do not care that major decisions affecting the legal and societal needs of the citizens Ontario will be made by managers in other countries who have different agendas and interests to those of our public. You miss the point of the example of prohibition, namely, that an initiative that the promoters truly thought was good turned out to be so permanently and deeply damaging. You dismiss another example of well-intentioned people who absolutely and badly harmed thousands of our citizens with their short-sighted doctor reduction policies, and you say law firms must adopt mainstream business structures. What do you mean by ‘mainstream’? Corporations which, by law, must act in the best interests of their shareholders? Where is the benefit in that to the clients of lawyers who, by law, must act in the best interests of the clients (and most of us do though probably to a far greater extent than lawyers in giant firms with their mindboggling billing targets)?
One commentator said that the demise of Heenan Blaikie “proved” that the law firm model was a failure and that we should adopt corporate structures. I pointed out that we rarely have large scale law firm failures but that we see on a regular basis a large number of large scale corporate failures, and that maybe the corporate world should learn from us, not the other way around. All I got were gibes about failing to recognize the many successful businesses. All I was doing was pointing out that the commentator had failed to recognize the many law firm successes and observing that our rate of success and failure is better than the rate of success and failure in the, as you would put it, mainstream business world.
You missed the point that our structure works better than corporate structures, at least in our field.
You also miss the point that nothing has ever stopped law firms from innovating, and we do it all the time. Instead, we are faced with the empty claim that we cannot innovate. I sit in my office examining how different just my little practice is compared to when I started and how keen I am (and just about every lawyer I know is) for any improvements, and I realize just how fatuous the claim is. I see amazing innovations going on, and I see nimble young lawyers exploiting technology on remarkable scales. I notice that none of that needed ABS, so I ask again, why in the name of all things holy would we ever sell our ownership of the no-worse-than-second-most-important profession in the World to an extra layer of entirely profit motived remote investors when (a) we do not have to, (b) every last benefit claimed for ABS can be achieved without ABS, and (c) it would be utterly irreversible when it proves to be, as it most assuredly will prove to be, the most colossal, short-sighted, cynical, profiteering at the expense of the public, and unnecessary blunder in the history of the legal profession dating back 800 years? I know that you certainly do not have the answers.
I no longer think it is necessary to sugarcoat it. Any document that harms our independence in this myopic, profiteering way will indeed be regarded by knowledgeable historians as Puny Carta, Lazy Carta, Bootlicks to Big Business Carta, and just about any other pejorative epithet you want to label it with. ABS is a mind-bogglingly bad idea. For Pete’s sake, let us deal with the real access to justice problems, problems that ABS has proven almost entirely incapable of dealing with. Stop helping slavering mega-dollar corporations from taking us over. Put your time toward figuring out ways to cut the time and therefore the cost of litigation. That is what will help the public, not adding layer upon layer of profit-seekers who, by law, do not share the ethos that, by law, most of us in fact take seriously.
Something else you could do is figuring out a way for the ordinary public to be able to afford you. After all, with only odd exceptions, the bigger the firm, the higher the per file cost to the client. For example, all the big firms could move to the distant suburbs where rents are lower. For another, you could cap partners’ earnings at, say, $300,000 per year (still an extraordinarily generous rate of annual pay – well above the 1% threshold of $210,000) and return all revenues above that rate to the clients. I’ll bet the partners at all of Canada’s large law firms could reduce their hourly rates by 50% and still make far, far more than the lawyers in the average small firm.
For another, you could sell the art work on the walls in the big firms and donate the proceeds to Legal Aid. Actually, I do not care what rental rate you want to pay, or what you and your partners earn (sincerely, good for you, I am not jealous), or what you spend on art work and golf club memberships. The people and businesses who hire you must be able to afford you or they would not go to you. Many of them do not need to go to you as there excellent tax lawyers in smaller firms with lower overheads but they choose to go to you. Good for you and good for them. But stop trying to help giant companies from attacking low-cost lawyers just because some of the big companies who are clients of your firm stand to profit from the stupidity of selling ourselves to them.
Brad
Dear Brian Francis,
I am glad you agree that there are too many lawyers because, as the US experience has shown, that is part of the problem. I am glad you agree that changes are needed to speed up the [litigation] process. So please help in bringing about those changes. Let us do something about the proliferation of doctors in the witness box. Let us deal with malingering being a cash cow to lawyers. Let us get rid of duelling experts. Perhaps the government could keep a roster of completely independent experts who are officers of the court and not the hired guns of the litigants. Those are solutions to real problems, and they do not require ABS to implement.
You say that “There is no desire on the part of lawyers to lobby seriously and vigorously to clean up the Ontario IME/IE expert witness system. In fact, the Ontario personal injury auto insurance system has become so bogged down with delay that the Ontario government now seeks to curb access to the courts for injured auto accident victims Bill 15). The irony is that their plaintiff lawyer indifference to languishing cases has finally come back to bite them in the ass.”
I do not dispute what you say. I am not a defender of the high cost of litigation in any way. I do defend the many, many excellent barristers who work themselves to death on behalf of their clients. But I also note that the system the personal injury lawyers live in was set up by the government. It is not going to change unless the government changes it. Litigation lawyers are not going to change it on their own. I see that all around me when, for example, a litigation bencher blathers on endlessly and fatuously about the cost of a will but not once ever puts forth a suggestion on how to reduce the cost of litigation. That is why we need benchers who put the public interest ahead of the interests of the litigation bar. And not even the experts in the two ABS jurisdictions claim that ABS does much to deal with the problems endemic in the system.
You mention “languishing” in the litigation system. That is the very type of problem we should be addressing, not whether a bank can sell a will.
As for the cases of overbilling, they hide the fact that, in the vast majority of cases, the lawyers did not overbill, at least in the context of the current system. In fact, it is hard to build a practice if your local reputation is that of an overbilling gouger. Most lawyers build their practices by doing very good work for fees that provide value to their clients. Certainly, that is the case on the solicitor, prevention law side. To bring that value more into line with client expectations on the litigation side, then we must, there is no other way, reduce the time and therefore the cost of resolving litigation disputes. ABS does not do that. It just adds another layer of profit-seekers.
I am glad that you think I am right when I say that ABS won’t put an end to off-the-chart billing by litigators.
Then you say that you like the Walmart option for ABS as an alternative to the current personal injury law delivery system.
But what is that option? You are wrong if you think that Walmart law for personal injury or any litigation is going to be cheaper than going to any one of the large number of independent small firm litigation lawyers. The lawyers there would be just as sunk in the current litigation system as any other lawyer.
I cannot believe that you would say that the clients “shopping for a personal injury lawyer wouldn’t be fooled into believing that the current personal injury delivery system is guided by professional and ethical standards rather than the unbridled drive for ever-greater profit.”
For one thing, the current firm at the Walmarts is not an ABS. It is not owned by Walmart. But if it were, you can be sure that a Walmart-owned legal entity is not going to take on litigation. As long as the system requires so much time to be spent on the stages, experts, etc., then there is no possible way that a Walmart-owned firm could make money without charging more than enough to cover the costs of that protracted system and make a profit – a profit that would have to cover not only all the expenses of running the law department and paying the lawyers in it, but also producing a return on investment to the shareholders of Walmart for their foray into legal services. If anything, the costs would go up. Do you think Walmart would take the risk of a big case being lost with no recovery? Maybe if they could use their undereducated, underpaid, non-unionized Third World workers to do the motions and trials. Otherwise, I doubt it. If the Walmart law firm agreed to some low fixed fee, what are going to do? Not show up at the next motion when the money runs out? Keep showing up even though there is not money in it for them?
You are right when you say that “Walmart doesn’t pretend to have some higher, loftier motive”. Only lawyers have a loftier motive, one that that the majority of lawyers, in fact, do take seriously whether you want to believe it or not.
You are right when you say it would be “buyer beware at Walmart”. In my practice, I see wills done from kits bought from stores like Walmart. They, along with the home-made wills, are the most lucrative estate files I ever get.
You say, “That alone would be a refreshing change from the current scenario in which injured accident victims now pay about the same as what the ABS Walmart folks would charge.” How is paying the same a refreshing change? With the added cost of paying the return on investment to Walmart’s shareholders, then the only way to keep the cost to the client the same is to pay their lawyers less. That means the lousiest lawyers would end up working at Walmart. So you would pay the same, but get a substandard lawyer. Buyer beware indeed.
You say, “And Walmart wouldn’t pretend that their unsophisticated injured clients need not worry about excessive billing (due to promised LSUC oversight or ethical prohibitions).
We have that oversight now. And aggrieved clients take advantage of it whenever they are motivated to do so. So how does allowing a Walmart to own lawyers make any difference?
You say, “Hell, I’d be willing to pay more just for Walmart’s refreshing absence of hypocrisy.” Actually, you will pay through the nose if nonlawyer ownership of the legal profession takes hold. And while you may wish to dismiss the entire legal profession for hypocrisy, that is grossly unfair when the vast majority of us slip disks bending over backwards to do excellent work for our clients and, in most areas of the law, charge them in a highly competitive market fees that demonstrably provide excellent value for the client.
Here is one of the essential flaws with ABS. It will do precious little to bring down the cost of almost all litigation because it can do nothing about the stages, steps, and other delays and costs inherent in the system. What it will mostly do is siphon away from thousands and thousands of small, independent, high quality, low cost solicitor firms the work that they do, and deliver it into the maw of the ever-cartelizing behemoths who will then, in turn, having swept the market clean of the hordes of independents, and having oligarched themselves into dominance, will soak the public forever more (see the US title insurance predations of the US real estate lawyers to the permanent and high detriment of the public purse and public interest). I do not think we should be striving to bring that model here. Instead, we should be doing something to truncate the time and cost of those areas of practice that represent 99% of the problem – litigation areas.
Lastly, you included in your post the following:
“Bob Munroe 2015-01-19 13:28
ABS is being proposed as a solution for “access to justice” issues but there is no evidence to support this. The LSUC should focus its energy on lobbying for increased legal aid funding, student loans for law students to increase the number of lawyers and simplification of procedures to help self represented people. ABS is about “access to profits” for giant off-shore law firms and their investors not about “access to justice”.”
Bob Munroe is right when he says that there is no evidence that ABS is a solution to access to justice. Further, while increasing funding for legal aid is a nice goal, it is a drop in the bucket, and the government is too cash-strapped to do anything about it. He is wrong about increasing the number of lawyers. Part of the problem is that we have too many litigation lawyers who have too few litigation clients and have to charge those too few clients too much money in order to make, for most of them, merely a decent living. Forget about the millionaire partners in the big firms. They are a small percentage of all the litigation lawyers. Most of them make livings that will not allow them to retire in the same security as a teacher, or anywhere near as early.
Mr. Munroe is right about simplifying the litigation procedures. I say that such simplification would bring down the cost of litigation, allowing more self-represented people to afford knowledgeable advice, and, by, say, doubling the number of files a lawyer can handle for, say, half the price, then, say, twice as many citizens could afford the lawyer, and the lawyer would not suffer a loss of income either. If that also allows more SLRs to represent themselves without making, as many of them now do, such a hash of their cases, then that looks like a Win, Win, Win, it seems to me. But it can only happen if effective steps are taken to truncate the time and cost of resolving litigious disputes, and only the government has the power to do it.
(I suppose some parties could agree to bypass the government`s litigation and court system, and agree to go to something like go to binding arbitration such as currently offered by private courts. But they are not cheap either. But if they are a viable alternative, then people are welcome to go there. Many such private courts feature retired judges on their rosters. And I suppose some groups could bypass the system and resort to religious courts, but they have proven to be highly problematic. But the private arbitration chambers and the religious courts make no more than a dent in the scope of the problem. That means we are back to the only solution that will have enough of an impact – a radical overhaul of the current litigation system to drastically reduce the stages, delays, costs and time required to be spent in the current system. ABS does nothing there.)
And Bob Munroe hits the nail on the head when he says, “ABS is about “access to profits” for giant off-shore law firms and their investors not about “access to justice”.” I would merely add, `and some giant, home-grown law firms and their investors`.
Brad
Mr. Wright,
Thanks for taking the time to help me more fully understand ABS – and for addressing my (layperson) concerns. Turns out we agree on far more than we disagree on. It was never my intention to be critical of all lawyers. I’m only critical of personal injury lawyers who strive to create lengthy medico-legal expert witness battles that give rise to protracted litigation thus further driving up litigation costs – or who fail to challenge even completely unqualified insurer defence “experts” because by purging them from the system there loss would result in far less (predictable) accusations of opportunistic malingering requiring litigation. I don’t for a minute think all personal injury lawyers do this sort of thing. But many do. And the ones who do suffer no displeasure expressed by either OTLA or LSUC. You would think the very worst offenders – chronicled in the press for their ridiculous billing – might be turfed from OTLA for sullying the reputation of all. But no. So while it may be the minority of personal injury litigators who let their cases languish – or who contrive to create expert witness battles that can go on for a decade or more – the vast(?) majority of “good guys” in the personal injury bar sit silently on the sidelines. And in the battle to fix some of these enduring problems – like languishing cases with 47 experts per case – silence isn’t a neutral position. It is a vote for the continuation of the “vulture ethics” of the “one percenters”.
Thanks for not just blowing me off like I’m some sort of idiot malcontent from the layperson lunatic fringe.
Dear Mr. Patrick,
You greatly disserve the issue by calling my posts `ramblings`. I may be one poster currently, but there are a lot of people who recognize ABS for the poison apple it really is. You might over-react to the following analogy but I use it only in a very limited sense and that is to show that the many are not always right, and the few are often right. In the 1930s, Winston Churchill persisted in warning everyone within earshot that Hitler and naziism were extremely dangerous. The vast majority of the very smart people around him, cabinet ministers and the like, ignored him and jibed him for his concerns. I assume you know who was right. Besides, I am far, far from alone. There is a lot of support for the position I have taken the trouble to blog about. To cite one example, I attended a meeting of a cross-section of people (lawyers, paralegals, academics, lay persons) two nights ago. There were scores of people there. From the comments and questions and discussions afterwards, it was crystal clear that a large majority of these public-spirited people are increasingly wary of and opposed to ABS. They see for what it really is, not what the misguided or self-serving pushers say it is. If Churchill had had as many like-minded people around him as people like me do, WWII might have been avoided. (Do not accuse me of over-reaching. The analogy is to illustrate only one point.)
It is unfair of you to claim that my strategy is to `drown out` anyone; it is to expose the unsupported and erroneous nature of the arguments in favour of ABS, to expose the stupidities of attacking low cost legal services and turning them over to anti-competitive cartels while leaving untouched high cost legal services, and to put forth constructive arguments in favour of real and beneficial changes to where the real problems are.
When I show, simply by examining what the US regulators and reputable commentators such as the Government of California, the Supreme Court of Iowa, Fitch Inc. and numerous academics, commentators and authors have said, that a cartel of four US title insurers virtually wiped out the US real estate bar with predatory pricing that lasted only a short time and was followed by a permanent huge increase in pricing to the US public, and you dismiss it as rambling, it sounds as though you prefer simply to ignore reality. That is putting your head in the sand.
You claim that Magna Carta has no relevance to access to justice today. Well, championing the ignorance of history is one way to avoid having to deal with its lessons, I suppose.
First, Magna Carta does have relevance today because it shows that the desire of litigants to have their disputes resolved in a more timely (and thus less costly) way (clause 18) has existed for these past 800 years. The reason it is still a problem is that every government between then and now has created a litigation system that throws unnecessary hurdles in the way of getting the case before a judge. They reason they do that is because they, short-sightedly, do not want to pay for more judges, court rooms and court staff out of the public purse (especially if doing so would cost the current members of the government a slice of their future income increases). As a result, a section of the legal profession (the barrister bar) finds itself working in a ridiculously complicated system set up by others for reasons that make sense to the others. While many barristers really do try to keep the costs down, the system and the smaller number of greedy or desperate (from having too few clients) barristers militate against it. The simplest litigation involves four parties – the plaintiff or applicant, his lawyer, the defendant or respondent, and her lawyer. It only takes one of the four, acting unreasonably or selfishly or maliciously or misguidedly, to turn the litigation into a long, expensive nightmare. Magna Carta is most definitely relevant today. But then, I find, and I mean no personal disrespect, that many ABS pushers have little or no understanding of history, and, interestingly, they do not want to know. That`s too bad. If they did, they would be far more likely to be on the side of the debate that I and many others espouse.
Further, Magna Carta began the long, slow, very slow, evolution toward a legal profession that became fully independent of government. The only way to be fully independent is to be beholden to no-one other than the clients. Let us assume that the legal profession also desires to make a living. Then there are two groups the profession is beholden to – the clients and themselves. That is enough. When you add a third group – nonlawyer investors motivated solely by hefty returns on their investments – then you fracture the legal profession`s independence. Into that fracture will step greater and greater government interference in the legal profession – a very, very bad thing. As Churchill said, `the price of democracy is eternal vigilance`. He meant vigilance against increasing government encroachments on our freedoms. The legal profession, with a little help from a free media, is the great bulwark protecting our citizens from government over-reach. ABS would weaken that bulwark by compromising our ability to stand up and say, We are beholden to no-one but our clients (and, if you want to be cynical about it by citing some examples, to ourselves). We cannot make that assertion when we are owned by MegaCorp, headquartered in Zurich, run by a board (most of whose members could not find Ontario on a map with a pin sticking out of Toronto) that is lawfully required to maximize returns to its shareholders in the US, Brazil, Germany and China. The government would be sure to step into the fracture. They already have to quite an extent in Aus and the UK. Once in, never removed. Once in, always seeking to widen the breach. That is how governments overwhelmingly tend to behave. Check your histories.
Anything that reverses the evolution to independence is a very, very bad thing, and a desecration of what was begun with Magna Carta.
Then you dismiss my solution to the problem:
“That can only be done, realistically, by having the Law Society strike an effective committee to come up with effective recommendations to take to the government. I believe the government would listen to the Law Society if we (I am a life (non-voting) governor of the Law Society) were to show them how to change the system to reduce the cost (time and stages) of litigation.”
And you say, “Yes, Mr. Wright’s idea is to strike a committee. That seems to be the only thing Law Societies are good at, so why not?”
First, what do you know about what the Law Society is good at?. As it happens, they are very good at a lot of beneficial things. Could they be better? Sure, and it strives to be.
But, okay, Mr. Patrick. Explain what you would do. Since ABS does next to nothing and perhaps nothing about the time and cost of litigation, and since that is where the real barrier to access to justice lies, explain what you would do to deal with the time and cost of litigation. The reality is that only the government can change the system that the government itself set up. They will only change it if a sound report from a reputable source is put before it sufficient to engage their political will. The report would have to show that the government and its taxpayers would benefit from the small risk that more judges would be needed following the changes. I say we need a system that puts a huge onus on the lawyers to produce a fair result for their clients at a far earlier stage than under the present system. I say that that can be done without a hiring frenzy of judges. I go on to say that, even if more judges were needed, it would still be cost-effective in terms of reduced stress on the litigants and the consequent improved rates of workplace productivity and reduced rates of domestic stress.
For such a report to be generated, a mechanism is needed. I suggest a Law Society committee made up of well-motivated lawyers, members of the public and any other useful contributors, and tasked with coming up with workable, realistic and effective ways to truncate the time and cost of litigation, to bring down the sky-high barrier. The government respects the Law Society. Imagine if the Law Society, the Law Society!, approached the government with concrete proposals to reduce lawyer time in each and every litigation file. The government would most certainly listen. If you can think of a better mechanism, I would be glad to hear it.
So instead of denigrating my contributions while making none of your own except to toss peanuts from the gallery, I sincerely invite you to work with me to create a mechanism to convince the government to implement serious and beneficial changes to the barriers endemic in the litigation system. I would welcome your sincere and positive assistance.
Thank you.
Brad
After decades of silence – talk about legal fees and access to justice in the Ontario personal injury litigation context are erupting everywhere at once:
“Changes that support permanent fixes to Ontario auto system needed”
Canadian Underwriter-11 hours ago
Progress on the Ontario insurance product will continue to stall out without changes to clarify injury definitions and to enhance transparency in the tort system, …
“Constitutional Challenge Launched Against Flawed Ontario Liberal …”
Canada NewsWire (press release)-10 hours ago
Constitutional Challenge Launched Against Flawed Ontario Liberal Government Automobile Insurance Legislation- Discriminatory and Unconstitutional.
Mr. Wright, we share many concerns. I respect your evident dedication.
Self regulation is a buttress to the Rule of Law. If ABS threatens lawyerly independence, we should be wary.
Still… 76 comments in, I doubt there exist ten people who’ve read half of what’s been written. Brevity requires ruthlessness in wringing out everything that doesn’t substantially further the case: “sentences that are unnecessary elaboration; words and phrases that add nothing but length.” Antonin Scalia’s words.
Or as one Canadian jurist spoke it:
“There are four lessons I’d like to offer:
1. Remember you’re a lawyer, not a magician.
2. Don’t be like Chicken Little.
3. Don’t drown the fish.
4. Don’t adhere to schools of advocacy that should be closed.”
Honorable Justice Thomas A. Cromwell might agree that parallels to the Third Reich are a tad alarmist.
Hi Nate,
Re Churchill, as I made crystal clear, I was only referring to his experience for the limited purpose of showing that a minority can certainly be right in the face of a larger number who history proves wrong. Besides, based on attending meetings and talking to people, it is apparent that more and more people are adding themselves to those who were opposed to ABS in the first place, as well they should. Some people who are quite enthusiastic about ABS have changed their minds 180 degrees. Another, who still thinks that some good can come of it, says that his thinking today is not what it was a year ago. Let us hope that more and more past supporters will have the courage of epiphany and (1) give up trying to deliver ownership of our profession to those who do not and cannot share our ethos, and (2) work toward improving access to justice by tackling the real problems.
As for Churchill, here is something he said in 1933: “The worst difficulties from which we suffer do not come from without. They come from within…They come from a peculiar type of brainy people always found in our country who, if they add something to its culture, take much from its strength. [They] come from the mood of unwarrantable self-abasement into which we have been cast by [some] of our own intellectuals. They come from the acceptance of defeatist doctrines by a…proportion of our politicians.”
In this context, for “intellectuals” and “politicians”, think “supporters of ABS” and for “defeatist doctrines” think of the nonsense “selling out to cartels because we can’t innovate by ourselves”.
As for brevity, boy!, do I ever wish this could have been brief. This is what should have happened in Australia:
The Muser: Giddeye Mites. Whaddya think about allowing nonlawyers and profit-seeking investment houses to own law firms?
The Multitude: What!? Are ya friggin’ nuts???
End of issue.
Hi Brian,
You posted: “After decades of silence – talk about legal fees and access to justice in the Ontario personal injury litigation context are erupting everywhere at once…”
Thank Heaven for that. And that you and many others for being thoughtful, if sometimes in error, contributors to that talk.
And the talk needs to expand to include all areas of litigation. Such widespread and detailed discussions leading to truly effective improvements to the litigation system are long overdue. The discussions now need to be focused on how to bring about realistic, effective and achievable changes. That means the Law Society (a body highly respected by the government) has to approach the government with concrete proposals for those needed changes, and the government has to understand that the changes will benefit the government and the citizenry. If it is done right, it will even benefit, or at least not hurt, the profession (twice as many files taking half the time produces the same annual income).
The only point to add is that ABS is utterly unnecessary to bring about the needed changes. Indeed, the venturers would probably not be interested in proposals that would lower the costs to the public because that would impact the return on their investments. The venturers, if anything, would work to derail such salutary changes.
Think of it this way: the cartel of real estate agencies deliberately keep four times as many agents on staff as are necessary to do the work (several excellent agents have told me that over the years). That keeps the commission rate mostly at 5% (half of which goes to the cartels’ head offices) so that the large number of agents can make a decent living handling a relatively small number of transactions per year. But if 75% of the agents moved into other careers leaving the 25% to do the work, the 25% could make the same (actually better) livings they make now at 2% commissions. Ah, but the cut going to the head offices would drop from 2.5% to 1% and the head offices are not interested in that. That is a similar analysis to what the nonlawyer investors in law firms would apply to the ability to obtain a higher return on their investments – the more the clients pay, either in fees or shares of recoveries, the better the return to the investors. Nonlawyer investors would, therefore, have a great interest in a litigation system that engenders higher costs – the very evil, the exact high barrier, that we need to deal with.
No, there is nothing good about selling the legal profession to nonlawyers.
Brad
Mr. Russell,
“I’m tired. Tired of ABS fear-mongering.” That’s the line that started this record-breaking Slaw discussion. Now it sounds as if you are tired – tired of listening. You write: “If ABS threatens lawyerly independence, we should be wary”. Of course you should – nobody would quibble with that – but how does stating the obvious help inform the discussion – a discussion which began with Mr. Kowalski’s invitation to OTLA to elaborate on its ardent anti-ABS stance and to offer up alternative solutions to the array of problems undermining access to justice. As important as some (eg. Mr. Wright) say the ABS issue is – 78 posts in – I see nothing anywhere in this Slaw conversation by way of contribution from any of OTLA’s 1,300 members. Clearly, OTLA’s intent is to ignore Mr. Kowalski. As a result of OTLA’s absence and indifference we must import its voice from Law Times. You will be pleased to hear that it can be summed up with the ruthless brevity you say is the mark of any good litigator: ABS solves no access to justice issues – ABS is an “attack on profits” – Ontario personal injury litigation will be one of the most vulnerable areas of practice to this (real or imagined) attack on profits by private/non-layer interests. End of story?
I take it you think that about covers it – and that the entire argument can by condensed to this: ABS are suspicious because they threaten lawyerly independence and are likely to rob lawyers of their profits. Not so fast. What’s missing here is what OTLA offers by way of suggestions to improve access to justice (within its own turf) short of turning over its members’ profits to private offshore monster interests (whoever they may be). OTLA offers nothing – not a word. What about the out-of-control length of litigation in the Ontario auto insurance context? OTLA offers nothing by way of proposed solutions to that access to justice issue. What about the proliferation of rogue experts who flourish within OTLA’s turf? OTLA has never offered up any ideas on how to fix that problem either. In fact, despite widespread and growing discontent with the perpetually vexed expert witness system in the Ontario auto insurance system – OTLA has never shown up at any of the many media battles over systemic shoddy IMEs/IEs which morph into flawed expert opinion evidence (substandard “expert” opinion evidence is as common as dirt in the Ontario personal injury context). Systemic languishing (for a decade and more) of injury cases within OTLA’s turf exacerbated by endless costly expert witness battles (sometimes involving nearly fifty combatants) make the Ontario auto insurance system the prototypical example of litigation gone awry . Little wonder the Ontario personal injury system is so profitable for plaintiff lawyers. [As for Ontario auto insurer defence lawyers – the profit picture is more murky. It is unclear if they profit from the glacial pace at which injury cases move through the courts and FSCO’s Arbitration Unit). This week the IBC told the CBC that Ontario auto insurers’ defence lawyers get paid the same amount no matter how quickly or slowly their cases are resolved. Can that be true?] Bottom line – that OTLA lawyers aren’t eager to give up their handsome profits to private interests they say would gobble up their firms in an ABS world comes as no surprise.
What is surprising is that faced with such a threat – OTLA continues to suggest nothing by way of concrete steps that could be taken to clean up the perpetually vexed expert witness system plaguing its injured clients and driving up litigation costs by causing case litigation delay ad nauseum. Why not? Because OTLA likes expert witness battles and likes lengthy cases. They are profitable. So again: in the absence of any contribution from OTLA it is fair to assume that a ruthlessly brief synopsis of its position is this: we want to keep our profits – we want Ontario personal injury litigation to continue to be highly profitable – but we don’t want to join with lawyers such as Mr. Wright who talks about the need find ways to reduce the cost of litigation – the need find ways to curb expert witness battles – the need to find ways to purge the “hired gun rogue experts” from the system – and the need to find ways to quit letting cases languish for over a decade in the system (investing in decent tickler systems would be a good start). To the extent that it is correct to say (as some here have said) that access to justice problems reside primarily in litigation – or at least are highly amplified by the one percent of lawyers who are litigators – then offering up solutions to these problems would go a long way to undercutting Mr. Kowalski’s “we need ABS stance.” Alas all we hear from OTLA litigators on these perennial personal injury access to justice issues is silence.
But silence isn’t working out t0o well for OTLA. The Ontario auto insurance litigation status quo stands on the precipice. OTLA’s perpetual inaction in terms of stalled case resolution and bringing down litigation costs has drawn fire from various quarters – including from on-shore, non-lawyer, private interests . While OTLA laments the threat of ABS and myopically fears reduced profits by threats from abroad – the litigation landscape is shifting under its feet – and the threat is from the provincial government. OTLA lawyers may be married to the status quo but Ontario’s nine million motorists (OTLA’s client base) aren’t at all pleased to be held hostage. The IBC insurance lobby has cashed in on auto insurance discontent and convinced the government that the best way to reduce costs and speed up Ontario auto insurance litigation – so as to reduce premiums – is to reduce access to the courts and adopt/expand more expedient quasi-judicial avenue of recourse. Of course OTLA is enraged by this governmental intrusion on their litigation turf – an intrusion guaranteed to lead to diminished profits. In contrast to OTLA’s doing nothing in twenty years to improve access to justice for injured Ontario auto accident victims (only a fool would argue that CFAs by themselves make OTLA lawyers the poster boys and girls for affordable, quality lawyering) the OTLA machine has almost over-night ramped up a constitutional challenge to this private-interest (big insurance) home-grown governmental attack on its profits. OTLA will no doubt portray this slug-fest as one in which OTLA’s “fearless champions” of Ontario’s innocent accident victims are fighting private interests (insurers) looking to strip injured claimants of their right to their day in court. If only it were a day and not a decade. A charitable person would agree that that is part of it – but what has captured OTLA’s attention in a way that no other access to justice issue hurting its clients ever has is the fact that this is an attack on their profits.
OTLA litigators are a microcosm of the 1% of litigators whose “vulture ethics” (Mr. Wright’s term) have prompted some to suggest ABS as a viable access to justice solution. It is clear that the highly profitable yet highly inefficient OTLA litigation delivery system is under threat – from both within (in the form of curbed access to the courts resulting in curbed OTLA profits) and from without (ABS attacks on OTLA profits ).
It has taken a long time to get to this place. OTLA is between the rock (ABS) and the hard place (reduced access to the courts). It didn’t have to come to this. OTLA could have stepped up years ago and addressed the outrageous expert witness problems repeatedly chronicled in the press – but chose to ignore the problem and let it fester – in preference for its costly, business-as-usual, glacial pace of litigation which drowns its vulnerable clients in expert battles that hurt them badly (financially , emotionally and even physically).
“I’m tired” too. Tired of waiting for OTLA to articulate solutions for the access to justice problems it has so studiously ignored for two decades…but which have been crystalized in this discussion (see Mr. Wrights comments/suggestions). Unwilling to fight for incremental change that would have alleviated some of the access to justice problems in the Ontario auto insurance – OTLA’s profits have been put at risk by transformational change – by legislated changes to access to the Ontario courts – and by potential changes to the structure of law firm ownership.
It didn’t have to come to this. For example, OTLA could have joined with others (FAIR for example) in fighting to find ways to clean up Ontario’s IME/IE expert witness system. Doing so would have brought down the costs of litigation which in turn would have denied the insurance lobby the opportunity to attack plaintiff lawyer profits by lobbying for reduced access to the courts. Put simply – OTLA could have protected its profits (from the Bill 15 threat and the ABS threat) by fighting to protect its clients from a medico-legal expert witness system that is (according to the Medical Post) inflicting great harm on its clients – and forcing them to wait years to get the policy benefits and treatment they need. One law professor likened full-time vendors of medico-legal evidence as providing the “grease” that allows the personal injury system to slowly but surely grind up those it purports to serve – with boiler-plate reports and assessments being churned out by the pound rather than the page. Turns out the costly delays due to the inevitable expert witness battles are a threat to OTLA profits – a threat that unlike the IBC – OTLA didn’t see coming.
If the Ontario personal injury lawyers are successful in turning back the Wynne government’s attack on their profits – they might want to reach out to folks like Mr. Wright and finally get busy fighting for solutions to blatantly obvious access to justice problems rife in their turf. Continued refusal will likely mean that sooner or later those ABS omnipresent off-shore private interest monsters will get the opportunity to gobble up whatever profits the Ontario government doesn’t steal away by continually chipping away access to the courts for injured auto accident victims. Change is inevitable. OTLA can either get pro-active and fight for changes that will help their clients – or it can continue to sit quietly on the sidelines while others (the IBC and the “specialists” in “insurance medicine” and the Liberal government) continue to push for changes that hurt OTLA’s clients. Ontario accident victims are tired of waiting for OTLA litigators to step up and live up to the “fearless champions” mantle they so long ago bestowed upon themselves. If OTLA continues to dither on the access to justice front – it deserves to lose a chunk of its profits. It matters not to me, nor I suspect to most injured accident victims, whether those profits losses are the result of governmental restructuring of its litigation landscape or the result of off-shore, private interest, non-lawyer buy-outs.
January 25, 2015
Two brief corrections. Where I wrote, And that you…for being thoughtful…, I meant thank you…. And where I wrote, Some people who are quite enthusiastic about ABS, I meant …who were quite enthusiastic…
Also, note that the individual real estate agents are not to blame for the high commissions. They did not create them and they are not the ones keeping them mostly in place. The culprits are the policies from on high of the giant agencies. Just as the head offices of the nonlawyer cartels would dictate prices and billing targets to their local employee lawyers.
Dear Brian,
Thank you for another thoughtful post. And thank you for putting me firmly in the camp of those who want to improve the system. That is where I reside. Some thoughts though…
First, it is not the case that 1% of lawyers are litigators. About 50% of the practicing bar are litigators; i.e., barristers – the high-cost cure side of the bar. The other half are solicitors – the low-cost prevention side of the bar.
The fact that there are so many barristers per capita in the US and increasingly in Canada is a major reason why the cost to the public for barrister services is so high – too few clients per barrister such that each client has to pay more to give the barristers an income sufficient to retire at 75 in less security than teachers and civil servants with university degrees. Remember that the rise in SRLs has risen virtually in lock-step with the rise in the number of barristers per capita.
Another major reason is, of course, the unnecessary complexity and systemic delays built into the justice system as set up by a series of governments.
The first problem can be solved by doing actuarial analyses on how many lawyers per capita is optimum for society and then calibrating law school enrolments and graduation rates accordingly (exactly what the dentists and, to some extent, the accountants do, by the way). The second problem can be solved by amending the litigation system, as I and many others have been advocating for quite some time.
Second, the term “vulture ethics” was in response to Melissa LaFlair who referred to (nonlawyer) “vultures circling the legal profession”. I replied, in essence, that if she thought bringing those nonlawyer vultures into the ownership structure would ease any problems, she was very much mistaken. Most lawyers truly are not vultures (some are), but all nonlawyer owners and their executives would be, in furtherance of their profit seeking, their duties to their shareholders and their desires for the cushiest perks possible. Nonlawyer ownership would simply increase the percentage of vultures in the ownership structure of the legal profession – a very bad thing.
Third, let us assume for the moment your notion that OTLA’s members just want to preserve their profits and not have outsiders get their hands on major portions of those profits. However bad you see the profit motive of the personal injury bar, it would only worsen if they had to share those profits with nonlawyer investors. For one thing, the nonlawyers would profit just as much from the costly delays and driven-up costs that are possible and sometimes exploited under the current litigation system. The nonlawyers would have no interest at all in bringing down the costs of justice as doing so would eat into the pot from which their returns on investment would come. Indeed, given that the lawyers would not want to see their cut reduced and given that the investors would demand a hefty return on investment, adding another layer of ownership can produce only one result – higher costs to the public.
Some ABS pushers seem to think that a group of profit-motivated global corporations is going to treat the Ontario consumers of legal services better than the group of Ontario lawyers does. That is an incredibly naïve and erroneous view to take when endless historical examples, virtually all reality-grounded economic theory and practice, and common sense dictate otherwise. I raise again, ad nauseam, the experience in the US when a handful of giant corporations swept away thousands of small independent real estate law firms. The US public lost, the bar lost, and only the handful of big companies won.
Yes it is the case that, to the extent that the profit-motivated global corporations take over ever more of solicitor services, the one and only inevitable result is excessive and aggressive cartelization and ever higher prices to the public.
Fourth, let us also assume that OTLA is advocating solely on behalf of its members. Any organization that is not the Law Society is free, and usually does, advocate on behalf of its members. That is their role. Only the Law Society is required by law, and does, regulate the legal profession in the public interest. That is its role. That is why I say that the Law Society is the best entity to strike the best committee to come up with the best recommendations that would actually, not delusionally but actually, benefit the public by bringing down barriers to access to justice, which are found, on any objective analysis, overwhelmingly (which is not strong enough a word) on the litigation side of the equation. Note that such a Law Society committee would consult widely, including with the public. Given that so much is known about the issues already, it should take only a reasonable time to reach the recommendations stage.
You say, “OTLA will no doubt portray this slug-fest as one in which OTLA’s “fearless champions” of Ontario’s innocent accident victims are fighting private interests (insurers) looking to strip injured claimants of their right to their day in court. If only it were a day and not a decade.”
I have sympathy for OTLA`s position that having insurers strip claimants of their right to their day in court is not the best move. The reasons are that I do not trust the insurers to put their profit motive aside enough when lobbying to structure any such no-lawyer system, and I do not trust the government to calibrate any such no-lawyer system properly. The insurance industry would want to cut its payout costs and the government would not fund it properly (see legal aid) causing no end of delays and heartaches. The end result would come at the detriment of the claimants. Lawyers really are the best advocates for their claimant clients especially when they are operating in a fair, sensible, responsible system – a system that contains no incentives to drag matters out and run up costs.
But I agree with you wholeheartedly that the current system, featuring, as it does, horrendous amounts of time, too many stages and such cost escalators as Invasions of the Battling Experts, is horribly out of sync with what is truly needed to reach fair and early resolutions of the vast majority of the claims. So, we are back to finding a way to reduce the time, stages and other costs of the litigation process.
You posit that offering up solutions to the litigation access problems would go a long way to undercutting Mr. Kowalski’s “we need ABS” stance. You are correct, but I submit that the “we need ABS” stance has had, analytically anyway, its legs cut off already. Its pushers cannot win the analysis and are left with (a) accusing the clear-thinkers of fear-mongering, (b) stubbornly trying to offer up disprovable benefits, and (c) ignoring the increasingly apparent harms and problems (which, in the UK, are candidly admitted to by various ABSers and correctly observed by impartial experts).
You say, “It matters not to me, nor I suspect to most injured accident victims, whether those profits losses are the result of governmental restructuring of its litigation landscape or the result of off-shore, private interest, non-lawyer buy-outs.”
With great respect, I say it should matter to you very, very much whether the improvements come about as the result of governmental restructuring of the litigation landscape or as a result of nonlawyer ownership of the legal profession.
For one thing, I submit that it is now beyond doubt that ABS is not the answer, and that, far from being the Panacea in Nirvana that its supporters dream it is, it is a sugar-coated poisoned apple that would in reality, from the start and increasingly, far worsen the situation.
That leaves two routes: (1) voluntary change from within the practicing bar and (2) government restructuring of the litigation system. The first will not happen on its own (not because of malice but because of human nature and a dearth of leadership); the second will only happen if there is sufficient political will on the part of the government; and the political will can best, and perhaps only, be engendered by an excellent set of recommendations put forth by the Law Society (which is where the problem of a dearth of leadership can and must be solved).
For another thing, I say ABS would throw the baby out with the bathwater by irreversibly mowing down the highly competitive, low cost solicitor bar.
And for another, I say ABS would gravely and increasingly endanger the independence of the bar, an independence that is of immeasurable benefit to society.
(The preceding was one sentence; yet, it contains the most important of all the issues.)
Lastly, I have criticized the government for its negligent misallocation of scarce education resources and for putting in place a litigation gauntlet that serves mainly to grind down litigants with excessive costs in an attempt to deflect as many people as possible from adding to the government`s potential cost of having to hire more judges and so on. While it is likely that some government planners make mistakes like that with the full knowledge of what they are doing, I believe that most government planners were and are truly trying to sculpt a beneficial system. They truly believed that inserting the mandatory mediation stage and the pre-trial stage would serve to encourage settlements thereby saving the parties the cost of a trial. And I am sure that statistics can be proffered up that seem to support that. I just think that they are mistaken in thinking that so many stages and delays are beneficial. I believe that their analyses stopped too early. I believe that, with a beautiful push from the Law Society, these well-intentioned government planners would be happy to improve the litigation system. I believe it can be done without bowling over the litigation lawyers (again, twice as many files earning half the fees per file equals the same income (and twice as many grateful clients and hordes of happy judges no longer having to deal with so many SRLs)). I would like to see all of us work toward it, Mitch Kowalski, Bob Smith, Melissa, OTLA, the Law Society, everybody.
Note also that the Law Society`s current Treasurer, Janet Minor, comes from a distinguished career in Government. To her very great credit, she slowed down the pell-mell drive to approve ABS, gave more time for submissions to be made, and has made it clear that more consultations will be held before any decision is made. If I were in her shoes, my feet would hurt and people would look at me funny. No, no, silly me. I mean if I had her job, I would desperately want to delay any adoption of ABS to my successor`s term because I would not want to go down in history as the person at the helm when Pusillanimous Carta was adopted. Her caution on the issue is very wise. Actually, she has a chance to go down in history as the person at the helm when the great steps were taken to make the Ontario litigation system the best in history, the model later gratefully adopted by the Country, the Commonwealth, the US, China, the former East Bloc…..Wouldn’t we love to see that. The document that produced that would be regarded by future generations with the same reverence as Magna Carta is today (even if it came to be known as Minor Carta!).
The ABS Task Force should jettison its poisoned apple and reconstitute itself, or be reconstituted, as the Litigation System Improvement Task Force. Interestingly, the benchers on the ABS Task Force have the brilliance, experience, energy and public spirit to be superb contributors to improving the litigation system. If only they would. If only they were asked to.
Brad
How does extending the two-year limit (LT below) square with the recommendation to pick up the pace of litigation so often recommended in the improving“access to justice” chatter ? For that matter how does Shanoff’s Sunday column (further below) fit within the “access to justice” lexicon here on Slaw? Access to justice for Ontario’s injured motorists is circling the toilet. The system is so bad (and getting worse in fact) that while off-shore ownership of personal injury firms might hurt the lawyers plaintiff lawyer profits – their clients might hardly notice the difference.
http://www.lawtimesnews.com/201501264439/headline-news/two-year-trial-deadline-repealed-under-new-rule-change
Murray says while the two-year limit might have worked in some areas, it was particularly problematic for lawyers practising personal injury law.“It failed to take into account that oftentimes, counsel do know what they’re doing,…”
“Personal injury ligation and litigation of all kinds is messy. It’s not a very nice business because people are fighting, and to expect them to wake up one day on Year 2 and say, ‘By the way, we’re not fighting anymore, we’re going to move along,’ is totally unrealistic.”
Murray says the fact the new rules mean automatic dismissal after five years without further notice is both positive and negative in some ways. On the one hand, he says the change eliminates court time often spent on determining whether there was proper notice before dismissal. But on the other hand, lawyers who don’t have the proper time tickers may find their cases dismissed without their knowledge.
Two brief corrections. On January 24, where I wrote, “And that you…for being thoughtful…”, I meant thank you…. And where I wrote, “Some people who are quite enthusiastic about ABS”, I meant …who were quite enthusiastic…Also, note that the individual real estate agents are not to blame for the high commissions. They did not create them and they are not the ones keeping them mostly in place. The culprits are the policies from on high of the giant agencies. Just as the head offices of the nonlawyer cartels would dictate prices and billing targets to their local employee lawyers.
Dear Brian,
Thank you for another thoughtful post. And thank you for putting me firmly in the camp of those who want to improve the system. That is where I reside. Some thoughts though…
First, it is not the case that 1% of lawyers are litigators. About 50% of the practicing bar are litigators; i.e., barristers – the high-cost cure side of the bar. The other half are solicitors – the low-cost prevention side of the bar.
The fact that there are so many barristers per capita in the US and increasingly in Canada is a major reason why the cost to the public for barrister services is so high – too few clients per barrister such that each client has to pay more to give the barristers an income sufficient to retire at 75 in less security than teachers and civil servants with university degrees. Remember that the rise in SRLs has risen virtually in lock-step with the rise in the number of barristers per capita.
Another major reason is, of course, the unnecessary complexity and systemic delays built into the justice system as set up by a series of governments.
The first problem can be solved by doing actuarial analyses on how many lawyers per capita is optimum for society and then calibrating law school enrolments and graduation rates accordingly (which is what the dentists and, to some extent, the accountants do, by the way). The second problem can be solved by amending the litigation system, as so many of us have been advocating for quite some time.
Second, the term “vulture ethics” was in response to Melissa LaFlair who referred to [nonlawyer] “vultures circling the legal profession”. I replied, in essence, that if she thought bringing those nonlawyer vultures into the ownership structure would ease any problems, she was mistaken. Most lawyers truly are not vultures (some are), but all nonlawyer owners and their executives would be, in furtherance of their profit seeking, their duties to their shareholders and their desires for the cushiest executive perks possible. Nonlawyer ownership would simply increase the percentage of vultures in the ownership structure of the legal profession – a very bad thing.
Third, let us assume for the moment your notion that OTLA’s members just want to preserve their profits and not have outsiders get their hands on major portions of those profits. However bad you see the profit motive of the personal injury bar, it would only worsen if they had to share those profits with nonlawyer investors. For one thing, the nonlawyers would profit just as much from the costly delays and driven-up costs that are possible and sometimes exploited under the current litigation system. The nonlawyers would have no interest at all in bringing down the costs of justice as doing so would eat into the pot from which their returns on investment would come. Indeed, given that the lawyers would not want to see their cut reduced and given that the investors would demand a hefty return on investment, adding another layer of ownership can produce only one result – higher costs to the public.
Some ABS pushers seem to think that a group of profit-motivated global corporations is going to treat the Ontario consumers of legal services better than the group of Ontario lawyers does. That is an incredibly naïve and erroneous view to take when endless historical examples, virtually all reality-grounded economic theory and practice, and common sense dictate otherwise. I raise again, ad nauseam, the experience in the US when a handful of giant corporations swept away thousands of small independent real estate law firms. The US public lost, the bar lost, and only the handful of big companies won.
Yes it is the case that, to the extent that the profit-motivated global corporations take over ever more of solicitor services, the one and only inevitable result is excessive and aggressive cartelization and ever higher prices to the public.
Fourth, let us also assume that OTLA is advocating solely on behalf of its members. Any organization that is not the Law Society is free, and usually does, advocate on behalf of its members. That is their role. Only the Law Society is required by law, and does, regulate the legal profession in the public interest. That is its role. That is why I say that the Law Society is the best entity to strike the best committee to come up with the best recommendations that would actually, not delusionally, best benefit the public by bringing down barriers to access to justice, which barriers are found, on any objective analysis, overwhelmingly on the litigation side of the equation. Note that such a Law Society committee would consult widely, including with the public. Given that so much is known about the issues already, it should take only a reasonable time to reach the recommendations stage.
You say, “OTLA will no doubt portray this slug-fest as one in which OTLA’s “fearless champions” of Ontario’s innocent accident victims are fighting private interests (insurers) looking to strip injured claimants of their right to their day in court. If only it were a day and not a decade.”
I have sympathy for OTLA`s position that stripping claimants of their right to their day in court may not be the best move. The reasons are that I do not trust the insurers to put their profit motive aside enough when lobbying for any such no-lawyer system, and I do not trust the government to calibrate any such no-lawyer system properly. The insurance industry would want to cut its payout costs and the government would not fund it properly (see legal aid) causing no end of delays and heartaches. The end result would come at the detriment of the claimants. Lawyers really are the best advocates for their claimant clients especially when they are able to operate in a fair, sensible, responsible system – a system that contains no incentives to drag matters out and run up costs.
But I agree with you wholeheartedly that the current system, featuring, as it does, horrendous amounts of time, too many stages and such cost escalators as Invasions of the Battling Experts, is horribly out of sync with what is truly needed to reach fair and early resolutions of the vast majority of the claims. So, we are back to finding a way to reduce the time, stages and other costs of the litigation process.
You posit that offering up solutions to the litigation access problems would go a long way to undercutting Mr. Kowalski’s “we need ABS” stance. You are correct, but I submit that the “we need ABS” stance has had, analytically anyway, its legs cut off already. Its pushers cannot win the analysis and are left with (a) accusing the clear-thinkers of fear-mongering, (b) stubbornly trying to offer up disprovable benefits, and (c) ignoring the increasingly apparent harms and problems (which, in the UK, are candidly admitted to by various ABSers and correctly observed by impartial experts).
You say, “It matters not to me, nor I suspect to most injured accident victims, whether those profits losses are the result of governmental restructuring of its litigation landscape or the result of off-shore, private interest, non-lawyer buy-outs.”
With great respect, I say it should matter to you very, very much whether the improvements come about as the result of governmental restructuring of the litigation landscape or as a result of nonlawyer ownership of the legal profession.
For one thing, I submit that it is now beyond doubt that ABS is not the answer, and that, far from being the Panacea in Nirvana that its supporters dream it is, it is a sugar-coated poisoned apple that would in reality, from the start and increasingly, far worsen the situation.
That leaves two routes: (1) voluntary change from within the practicing bar and (2) government restructuring of the litigation system. The first will not happen on its own (not because of malice but because of human nature and a dearth of focused leadership); the second will only happen if there is sufficient political will on the part of the government; and the political will can best, and perhaps only, be engendered by an excellent set of recommendations put forth by the Law Society (which is where the problem of a dearth of leadership focused on this issue can and must be solved).
For another thing, I say, no, I know, that ABS would throw the baby out with the bathwater by irreversibly mowing down the highly competitive, low cost solicitor bar.
And for another, I say ABS would gravely and increasingly endanger the independence of the bar, an independence that is of immeasurable benefit to society.
(The preceding was one sentence; yet, it contains the most important of all the issues.)
Lastly, I have rightly criticized the government for its negligent misallocation of scarce education resources and for putting in place a litigation gauntlet that serves mainly to grind down litigants with excessive costs in an attempt to deflect as many people as possible from adding to the government`s potential cost of having to hire more judges and so on. While it is likely that some government planners make mistakes like that with the full knowledge of what they are doing, I believe that most government planners were and are truly trying to sculpt a beneficial system. They truly believed that inserting the mandatory mediation stage and the pre-trial stage would serve to encourage settlements thereby saving the parties (and the government) the cost of a trial. And I am sure that statistics can be proffered up that seem to support that. I just think that they are mistaken in thinking that so many stages and delays are beneficial. I believe that their analyses stopped too early. I believe that, with a beautiful push from the Law Society, these well-intentioned government planners would be happy to improve the litigation system. I believe it can be done without bowling over the litigation bar (again: twice as many files earning half the fees per file equals the same income (and twice as many grateful clients and hordes of happy judges no longer having to deal with so many SRLs)). I would like to see all of us work toward it, Mitch Kowalski, Bob Smith, Melissa, OTLA, the Law Society, everybody.
Note also that the Law Society`s current Treasurer, Janet Minor, comes from a distinguished career in Government. To her very great credit, she slowed down the pell-mell drive to approve ABS, gave more time for submissions to be made, and has made it clear that more consultations will be held before any decision is made. If I were in her shoes, my feet would hurt and people would look at me funny. No, no, silly me. I mean if I had her job, I would desperately want to delay any adoption of ABS to my successor`s term because I would not want to go down in history as the person at the helm when Pusillanimous Carta was adopted. Her caution on the issue is very wise. Actually, she has a chance to go down in history as the person at the helm when the great steps were taken to make the Ontario litigation system the best in history, the model later gratefully adopted by the Country, the Commonwealth, the US, even China, and maybe others. Wouldn’t we love to see that. The document that produced that would be regarded by future generations with the same reverence as Magna Carta is today (even if it came to be known as Minor Carta!).
The ABS Task Force should jettison its poisoned apple and reconstitute itself, or be reconstituted, as the Litigation System Improvement Task Force. Interestingly, the benchers on the ABS Task Force have the brilliance, experience, energy and public spirit to be superb contributors to improving the litigation system. If only they would. If only they were asked to.
Brad
Mr. Wright,
Part of the problem is that this Slaw access to justice discussion is so rarely grounded in anything concrete. But today’s Law Times column (below) on access to justice issues (two year versus five year deadline – pace of litigation – consequent cost of languishing cases- going paperless – tickler systems – is more grounded. See my comments at bottom and you will see why it is hard, for me at least, too put much stock in anything OTLA lawyers say about these concrete access to justice issues. And why is it that every issue is a special problem for OTLA litigators -from ABS and to filing deadlines)? Are they more special than other litigators? And what is the standard of practice in this area of litigation? Is it that personal injury lawyers “oftentimes” know what they are doing”? This Slaw discussion is too full of abstracts and platitudes. If we take personal injury litigation as an illustration – and if we juxtapose what is being said over there (LT) with what is being floated over here (Slaw) by you and others – things start to fall apart very quickly. Put simply, these competing and often self-contradictory OTLA truth claims on access to justice issues can’t all simultaneously be true. For Ontario auto accident victims and Ontario’s nine million motorists the pace of litigation is getting slower and access to the courts is getting more tenuous. That much is true.
Two-year trial deadline repealed under new rule change Featured
Monday, 26 January 2015 08:00 | Written By Yamri Taddese | Print | Email
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inShare.Some lawyers are expressing relief following the repeal of rules that automatically dismissed actions for delay after two years if they hadn’t made their way onto a trial list.
Rule 48 was particularly problematic for personal injury law, says Andrew Murray.
Rule 48 was particularly problematic for personal injury law, says Andrew Murray.
“It’s an improvement on a situation that became unworkable not only for lawyers facing dismissals but also for the courts, for master courts that have had to deal with the ramifications of those automatic dismissals,” says Andrew Murray, a partner at Lerners LLP.
As of this year, parties have five years to set an action down for trial. “As of January 1st, 2015, Rule 48.15 [of the Rules of Civil Procedure] is repealed entirely,” wrote Superior Court Master Donald Short in Humphrey v. Screemers Inc.
“Rule 48.14 is also repealed and replaced with a simpler rule with longer time frames,” he added.
“Under the new rule, each statement of claim in the boilerplate portion at the outset of that document will contain a notice that the action will be dismissed five years after it is commenced unless it has been set down for trial or otherwise disposed of or there is an order extending the time. The dismissal will be automatic with no further notice.”
Some lawyers say Rule 48 was a bad idea to begin with. The two-year deadline under Rule 48, which allowed for quicker dismissals of dormant actions, dates back to 2009. At the time, the changes meant the court would dismiss several cases by Jan. 1, 2012. Besides the deadline itself, there were concerns about confusion arising from the wording of the rules.
While some lawyers call the new provisions an improvement, others say Rule 48 was a smokescreen for inefficiencies in the court system that the government has yet to resolve. “I’ve always thought Rule 48 was the attorney general’s failure to actually get enough resources from cabinet to allow him or her to build a modern [court] technology infrastructure in Ontario,” says Lou Ferro of Ferro & Co. in Hamilton, Ont.
“When the government started to worry about all the paper they have to store, the obvious solution would have been to put some technology in place,” he adds.
“The whole world understands that you can’t maintain a paper file anymore.”
Lawyers simply became political scapegoats for cases thrown out of the court system, according to Ferro.
“Instead of fixing the problem with technology, more judges, and better system design, they lashed out and said, ‘Oh well, we’re going to have a system called Justice on Target and we’re going to measure the length of time it takes from start to finish and, by the way, if you don’t fall in line with what we think is the proper timeline, we’re going to throw out your case,’” he says.
The rule failed to create efficiencies, adds Ferro, who notes it in fact did the opposite. When the court threw out a case after two years for delay, it was unlikely a lawyer would accept the dismissal without a fight, he suggests, noting followup motions seeking to set aside administrative dismissals only added to court time.
“You can’t just admit that your case is thrown out because you’ll get sued,” he says.
“You have to go back and get it reinstated. So instead of shortening the process, [the two-year restriction] has increased the process and the cost of the process.”
But the problem remains, according to Ferro. “As it turned out, in hindsight, none of it worked,” he says.
“Now all of a sudden they’ve gone from two years to five years, but it’s still the same problem.”
Murray says while the two-year limit might have worked in some areas, it was particularly problematic for lawyers practising personal injury law.
“It failed to take into account that oftentimes, counsel do know what they’re doing, the direction that a file is taking, the time that it’s taking, and there [could be] multiple good reasons as to why a case wasn’t set down for trial or even sometimes why there wasn’t a statement of defence,” says Murray.
Lawyers could be dealing with a minor or someone whose medical condition needs to stabilize before setting a trial date, he notes.
Ferro, too, says the previous rule had “an unrealistic expectation.”
“It’s an unrealistic expectation because the work I do is messy,” he says.
“Personal injury ligation and litigation of all kinds is messy. It’s not a very nice business because people are fighting, and to expect them to wake up one day on Year 2 and say, ‘By the way, we’re not fighting anymore, we’re going to move along,’ is totally unrealistic.”
Murray says the fact the new rules mean automatic dismissal after five years without further notice is both positive and negative in some ways. On the one hand, he says the change eliminates court time often spent on determining whether there was proper notice before dismissal. But on the other hand, lawyers who don’t have the proper time tickers may find their cases dismissed without their knowledge.
And while the switch to a five-year deadline may be good in complex matters, in other cases it will mean simpler files will drag on for far too long, says Kevin Toyne of Brauti Thorning Zibarras LLP. “In some cases, I think the change to five years is going to be helpful; in other cases, you may see the case languish without moving forward with the kind of speed that it should. So it’s really going to depend on the nature of the issues in the case.”
For more, see “Master calls for flexibility over Rule 48” and “Court gives civil lawyers reprieve from dismissal threat.”
Comments # brian francis 2015-01-26 10:56
So, for the AG the paperless solution is the obvious one but for the profession the paperless solution is a risky one. Have I got it right?
Ferro in today’s LT:
“When the government started to worry about all the paper they have to store, the obvious solution would have been to put some technology in place,” he adds. “The whole world understands that you can’t maintain a paper file anymore.”
http://www.lawtimesnews.com/201501264439/headline-news/two-year-trial-deadline-repealed-under-new-rule-change
Ferro two weeks ago in LT:
In a statement to Law Times, Ferro said the Hernandez file was “in its prime” while the firm was in the process of transferring all of its paper files to an electronic filing system.
“The profession should be warned that the transfer from paper to electronic format comes with its risks,” he wrote.
http://www.lawtimesnews.com/201501124402/headline-news/critical-rulings-show-risks-of-going-paperless-lawyer-says
Reply | Reply with quote | Quote
# brian francis 2015-01-26 11:11
RE: “So instead of shortening the process, [the two-year restriction] has increased the process and the cost of the process.”
How does one reconcile this observation with the on-going Slaw stream of rhetoric on “access to justice” arguing that by implementing changes which speed up the litigation process (so as to reduce costs) there would be no need for (some say) “extreme” access to justice solutions – likes ABS?
OTLA wants a slower, more leisurely pace of litigation no matter the cost – but doesn’t want the threat ABS poses of non-lawyer buy-outs of their highly profitable firms. I can see how this argument makes fiscal sense for OTLA lawyers – but how does it solve access to justice problems (eg. languishing cases) suffered by injured Ontario auto accident victims?
“’Personal injury lawyers are one of the few players in the auto insurance system with no regulatory oversight over their pricing scheme.”
Mr. Wright – What about regulatory oversight of the Ontario auto insurer defence lawyers’ pricing scheme? Is there any? And why is the insurer defence lawyer pricing scheme so opaque (CBC Ontario today podcast on deny/delay) ? And is regulatory oversight of lawyer fees a good idea – in any area of practice? As you can see – access to justice issues get real messy real quick once we move from polemics to particulars.
http://www.insurancebusiness.ca/news/ibcs-taylor-identifies-strong-opponents-to-insurance-187438.aspx
IBC’s Taylor identifies ‘strong opponents’ to insurance
The ABS debate is shaping up to be a generational one, so the words of David Bowie seem most appropriate:
and these children that you spit on,
as they try to change their worlds,
are immune to your consultations,
they’re quite aware of what they’re going through.
Mr. Wright,
So what about this: OTLA hates ABS threat to profits. But OTLA has no self-restraint when it comes to its “pricing scheme. So how about some governmental oversight? I’m guessing neither you nor OTLA would want that either. CFA’s (according to triers of fact) aren’t the complete answer. They are often unfair and have even gave rise to at least one class action against an OTLA lawyer. So other than asking Ontario’s nine million motorists – 60,000 of whom will be in accidents each year – many needing an OTLA lawyer to handle their injury case – what do you suggest? Trusting in their self-proclaimed high ethical and professional standards isn’t working out too well judging by the widespread dissatisfaction with the plaintiff bar of injured claimants/clients who have been put through the auto insurance litigation wringer. They are like lambs being led to slaughter – fleeced very step of the way. Are you in favour of governmental over-sight of OTLA pricing? If not that – then what?
…………………..
“’Personal injury lawyers are one of the few players in the auto insurance system with no regulatory oversight over their pricing scheme.”
http://www.insurancebusiness.ca/news/ibcs-taylor-identifies-strong-opponents-to-insurance-187438.aspx
Mitch,
I am not sure what the David Bowie lyric is about. If you mean that some young lawyers want ABS because they have been duped into thinking it is a magic elixir, they will be in for a shock when they discover that their jobs have been taken over by minions who, while less educated than lawyers and doing a lousy job, will nevertheless charge the public more to cover the increased risk that their megacorp employer is incurring by having so few qualified and hands-on lawyers on staff. They will suffer a further shock when they realize that, if they have a job a megacorp, they have to hit horrible billing targets to feed and water all the profit-takers above them they will never meet, and that a good chunk of that profit-taking is coming out of their incomes (the higher prices to the public will flow right through their fingers and land in the vaults of the profit-takers above them). They will wonder why they bothered going to law school in the first place. The smart ones will realize that they did not have to sell one cent of the ownership of their practice to build a successful practice and will wonder how they ever let themselves get hoodwinked into doing so.
You would sell out the independence of the legal profession for ephemeral, imagined benefits that are wholly unnecessary, and downright harmful, to the process of dealing with the one sky-high barrier to access to justice. The groups that did it in Aus and the UK will be doomed by history. It is too bad that you stubbornly want to bring that cesspool here.
Here is the quote from Jeff Winn in Britain’s The Lawyer magazine as follows: “We will continue to invest and aim for 30 per cent growth until that dies,” says Winn. “There will be great consolidation in the market and it would not surprise me if there are just six to ten personal injury firms that dominate 70 per cent of the market in two to three years’ time.”
He was referring to a market featuring 60 million people; i.e., at best one firm for every 6 million Englishmen and Welshmen. Ontario’s market is 13 million people. Mr. Winn’s model would support here only about two or three, at most four personal injury firms. So much for competition in that world.
Here is another example of an ABS insider making no bones about the impact of ABS. Dan Fitz is the head of BT Law, a law firm owned by the giant British Telecom conglomerate. In March 2014, he was quoted as saying, “This represents a big threat for small and medium-sized firms…[but]…there will always be demand for the services the top firms provide for bet-the-company matters*. We think there is potential [for us] there. Our philosophy is that as long as the risk and potential liabilities aren’t too high, then we’ll give it a try and see what happens.”
*in other words: We in the big firm world are going to be all right, Jack, and too bad so sad for everyone else. And, we don’t mind giving something irreversible a try, and if it turns out to be a colossal blunder, we can ride it out and too bad for everyone else.
Then there is the observation of four UK experts who said that the main “benefit” of ABS is that it provides access to capital to fund consolidations in the legal marketplace, and that there is no evidence that the public has benefited from ABS.
Then there is Slater and Gordon from Australia. After arriving in the UK, between just 2013 and 2014, it more than doubled in size with revenues of more than $150,000,000.00. Who is paying for that? The public. They have been buying firms in the UK right, left and centre, reducing competition everywhere they go. Now they are in talks to acquire Quindells. According to one report, they are targeting over 400 law firms. In Aus, the partial list of, apparently, well known firms they have gobbled up in just a few years is over 20. Imagine if, in Toronto, the 25 biggest firms were consolidated into three. Slater and Gordon have, with just two other firms, grown to command 45% of their core market, with no end in sight to their ambitions. Who is paying for that? The public. There is not a shred of evidence that the public is benefiting from that any more than they would have benefited from less consolidation, less cartelization.
ABS is really about two things. One, a handful of giant firms will become absolute behemoths beholden in reality to outsider investors who do not and cannot share our central ethos, and, two, the government will use that as an excuse to take self-regulation away from the legal profession. (They took it away in Aus and the UK for reasons that do not exist here; but it will not matter.)
The history of market domination by a small number of large entities in areas closely related to legal services is not a happy one for the public. What makes you think it would be any different in the legal services world?
If you (generically speaking) care about the public interest and wish to save the public from the anti-competitive fall-out of substantially reduced competition, you oppose ABS. If you care about the long-term health and independence of the whole legal profession, you oppose ABS. If you care about our ability to maintain self-regulation after we make ourselves beholden to profiteering paymasters whose returns on investment we would then be responsible for, you oppose ABS. If you do not want to see the 1% get richer, heck, make that the 0.1%, get richer at the expense of hollowing out the great middle of the profession, you oppose ABS. If you are blind to those issues, if you lack the courage to admit that an early infatuation with ABS was unwarranted, if you cannot accept the reality on the ground as candidly described by the insiders in the UK, if you prefer to cling to failed theories, or if you expect to personally profit from ABS and to hell with the greater social good, then you support ABS. Simple as that.
Brian,
You do not have to convince me that significant changes are required to the litigation system. I do not think that tinkering around the edges by fiddling with limitation dates does anything truly useful in this regard. What is needed in an overhaul, designed by a duly-constituted LSUC committee that would then work with the government to achieve it. All we need is courage and wisdom. Do we have those two qualities? I think so.
But if we both adopt ABS and do nothing effective about the time and cost of litigation (and ABS militates against doing anything effective about the time and cost of litigation by incentivizing another layer of profit-takers to work to ensure that the litigation system remains costly to enhance the percentage returns), then I will be proven wrong, and I will feel bottomless shame for myself, for my otherwise great fellow benchers, for three institutions that I love – Convocation, the Law Society, and the legal profession – and for the Government. And when the public then points their fingers at us and shouts, “How could you have done this to us!”, I will have to hang my head because I will not have an adequate answer.
Brad
Mr. Wright, I hope the following “less educated than lawyers” is no indication of how you and your profession view the lay persons you either work with or come into contact with — your non-lawyer clients as well. How does this reflect on your views of the public whose interest you are suppose to uphold? Is this also a reflection of how lay staff are treated and regarded in law firms — they’ve nothing of worth to contribute and you’ve nothing to learn from them. Are the lay benchers who serve with you also a part of this “less educated than lawyers” notion? Is this a reflection of the profession’s culture and “tradition”? I appreciate your passion, however, I also believe everyone has something to contribute whether they be trained in the law or not in reforming the profession and the justice system as a whole.
You say an “overhaul” rather than tinkering” is needed fix the litigation system. You may be right – I don’t know. You say “all we need is courage and wisdom”. In the Ontario personal injury context I think that those “two qualities” come in a distant second and third to the desire for ever-greater profit – no matter the cost. So much so that the OTLA has never spoken out about the need to remove even the most outrageously unqualified Ontario auto insurance medico-legal “experts” . For years Dr. James N. Sears (aka “Dimitri the Lover”) was totted out in Canadian Underwriter as Ontario’s top medical authority on casualty claims in Ontario’s auto insurance litigation regime. Dr. Sears (http://www.secondopinion.ca/) was for several years the architect of industry attacks on OTLA clients writing article after article on fraudulent malingering – even influencing legislation (attacking Bill 59). Never once during the years Sears plied his trade as an unquestioned “medical authority” did OTLA point out that Dr. Sears wasn’t an expert at all – and didn’t even have a medical licence – and that the CPSO had revoked his licence to practice medicine before he became Ontario’s “top medical authority” on symptom exaggeration, pain magnification and malingering in the auto insurance context. From a macro-economic perspective – insurer defence experts and IME vendors the likes of Dr. Sears are cash cows for lawyers. The more accusations of malingering they generate – the more need for litigation – the greater OLA’s profits. Why else, but for profits, did OTLA allow Dr. James N. Sears to work for nearly a decade in the Ontario auto insurance context – pose as a licenced doctor – and sell “mobile treatment” and “in-home surveillance” to auto insurers and defence lawyers – without a single word by way of protestation? Dr. Sears’ attitudes and actions generated a lot of work for OTLA lawyers – but isn’t there ever a time when in the interest of the (public) safety of vulnerable litigants and in the interests of preserving the integrity (is there any?) of Ontario auto insurance personal injury litigation system – bogus ”experts” (cash cows for litigators) must be purged from the system? Shouldn’t a litigation system that permits this sort of outrageous (some might argue illegal) abuse be ashamed? Yet OTLA never acknowledges the rogue expert problem – much less tries to solve it. Purging the rogue experts from the Ontario auto insurance system would reduce cost and delay – thus decreasing OTLA profits. That much is obvious. OTLA has chosen to do nothing about the likes of “expert” cost-drivers like Sears. Yet you are asking me to believe OTLA will get behind your “overhaul” of their litigation turf. What specifically would comprise this “overhaul” as it applies to OTLA’s turf? And why should anyone believe that OTLA will suddenly jump on the access to justice band wagon – and embark on a “litigation overhaul” when it hasn’t and too often still doesn’t challenge even the unqualified “experts” inhabiting its litigation system. Surely we could get rid of “experts” the likes of Dr. Sears without completely destroying profit margins. Nothing now stands in the way of taking this baby-step toward improving access to justice in the personal injury litigation system. Yet it remains a step yet to be taken. So I need something more concrete from you – I need you to crystallize/ground this “overhaul” of yours with one or two specific steps which you (or this LSUC Committee) would recommend toward improving litigation and access to justice in the Ontario personal injury context. It seems to me that when a dangerous fake doctor can function as “medical authority” in Ontario’s personal injury system – it ought not require a “duly-constituted LSUC committee” to point out that things need to change. Perhaps that is the real “shame” – that this hasn’t been obvious. Bottom line, if your “overhaul” of the litigation system includes reigning in “expert battles” and taking concrete steps so that – a fake doctor who by day acts as medico-legal expert while by night acts as (“Dimitri the Lover”) – can no longer do so – then I’m all for your “overhaul”.
January 27, 2015
Verna,
I do not think it is controversial to say that a person with at most a two-year college diploma is less educated in legal studies than someone with first an undergraduate university degree followed by a law degree followed by a bar exam process followed by a post-call learning process that is more intense than the post-degree learning process of a non-lawyer.
I did not say, and would not say, that they are less wise, less decent, less in any way, but the truth is that they are less educated than lawyers in the law. Some may have PhDs in other fields. Some may have more common sense than some lawyers I know, but overall, they are not going to be as educated in the law as lawyers.
I act for and know a large number of people, virtually all of whom are more educated, knowledgeable and skilled in their fields than I am in theirs. I go to them for medical help, accounting help, plumbing help, electrical help, home renovation help, car repair help, investment advice, new shoes and skates advice, and on and on and on. I respect them and their expertise. And the reason they come to me and other lawyers is because we are more educated than they in the law. I also call other lawyers for advice, and I am called by other lawyers for advice. But for advice in the law above traffic tickets, I call only other lawyers.
Megacorps running increasing aspects of legal services are not going to be interested in hiring very many of the better educated legal service providers. In hiring the less educated, they are going to increase the risk of problems. In so doing, they are going to factor into their fees the cost of the increased risks. They will also want to maximize their returns on investments. They will do that by paying their legal service provider staff less (the minimum they can get away with) and charging the public more for the services, to the detriment of everybody except themselves. This is not controversial. This is Economics 101.
Further, I was thinking of the companies that took over real estate conveyancing in the US who use staff who know very little about real property law. A lawyer in Florida who was put out of business, along with every other real estate lawyer in her city, by a six-month long (that is all it took) campaign of predatory pricing, and who, needing to make a living, then took a job with that industry (but is no longer doing much law), went on to describe the level of service (despite the now four times greater cost than the lawyers ever charged) that her new employer and its non-competitors now deliver to the public as shit (her word).
Further, on the blessedly few occasions when I have to contact one of the American title insurers operating in Ontario, the person on the other end of the phone has barely minimal knowledge, if even that, about real property law. And yet, the title insurance industry would have you believe that they are somehow more important in maintaining the integrity of the client’s title in the property than the lawyers are. What demonstrable nonsense. That industry is busily encouraging a serious deterioration in the quality of titles in their naked self-interest.
There are people who cannot fathom that practicing law is not easy, that there are innumerable complications coming at you like crazed black flies from across the seamless web of the law, and who believe that huge, important swaths of the law should be turned over to nonlawyers. Yet, where it has been tried, the result has been harm to the public. Everybody else’s job seems so easy from the outside. Why not let everyone who wants to be a doctor, because they were inspired by House, become a doctor? Why have standards of any kind for any profession? We now have a society where no-one is allowed to fail, and where it is someone else’s fault if your dream does not come true.
Even within the legal profession there are lawyers who think that areas they do not practice in are simple or commodities or (as one barrister who should have known better put it) conducted by mere technicians. They have never done it, they do not know what they are talking about, but they feel free to believe that somehow they are the only real lawyers. I normally do not mind that attitude. Litigators have to have healthy egos if they are going to remain litigators. I admire them for taking on the battles. But I do mind it when they suddenly appear to be willing to sacrifice small-firm solicitor work lest they be asked to help reduce the time and cost of litigation.
Brad
Verna, you also said, “Are the lay benchers who serve with you also a part of this “less educated than lawyers” notion? Is this a reflection of the profession’s culture and “tradition”? I appreciate your passion, however, I also believe everyone has something to contribute whether they be trained in the law or not in reforming the profession and the justice system as a whole.”
I agree with you wholeheartedly, and it is obvious that I do, that useful contributions come from anywhere and everyone. If the contributions are useful, I want to know about them. I do not care a jot where the good idea comes from, as long as it is a good idea. That has been my policy my whole life.
As for the lay benchers, the government has sent us over the years, a superb group, and their contributions to the Law Society are absolutely invaluable, and they know that all the lawyer benchers feel just as strongly about that as I do. Yet, none of the lay benchers has ever claimed to be as knowledgeable in the law as the lawyer benchers. Sometimes a lay bencher will preface their remarks by saying, “I am not a lawyer but…” We tend to drown that out because we revere their perspectives and contributions. When I have chaired discipline panels and a lay bencher says something like that, I always make it clear that their perspective is tremendously valuable, every bit as valuable as the perspective of the lawyers on the panel. And I always ask the lay member of the panel for their views first because I do not want the lay member to feel at a disadvantage if the two lawyers on the panel speak first.
There is no “culture or tradition” of the type you intimated. Quite the contrary.
Brad
I’m glad to hear that I don’t have to convince you that their are problems in the litigation system. If only the same were true of OTLA. I have no idea of the specifics in your suggested “overhaul” of the system. I only ask this: that it include something that will end the complete mess in the Ontario auto insurance expert witness system where general practitioners can easily pass as orthopaedic surgeons (so as to fool triers of fact to put greater weight on their opinion evidence) – where completely unqualified psychologists (according to their own regulator) can somehow get away with proffering unchallenged, unqualified expert” testimony in hundreds of brain injury cases – and where doctors who have lost their licence can then become medico-legal experts/authorities on casualty fraud in Ontario. I could send you cases involving/illustrating this sort of stuff all day – Hell – it would take me all week. I’m not asking for an “overhaul” or some huge transformation in the litigation process. I’m only asking that you folks figure out how to fix things so that what the system says happens actually happens. The Rules of Civil Procedure promise impartial and well qualified experts. Judges and arbitrators are the gatekeeper of who gets to proffer “expert” opinion evidence. But how can they if the lawyers don’t bother to check with the CPSO to see if the insurer defence expert is the orthopaedic surgeon/specialist he says he is – or is in fact a generalist. Because to many lawyers have chosen not to phone the CPO to check that the insurer defence expert is authorized by the College to practice in the area of neuropsychology and to proffer opinion evidence regarding brain injury – hundreds of brain injured accident victims cases have been tainted by unchallenged unqualified “expert testimony. I’d be happy to see this kind of thing fixed by an LSUC committee – but I’m not holding my breath. The LSUC says that lawyers have a professional to check the qualifications of opposing medico-legal experts – and to challenge them whenever it is appropriate to do so. Why then dos this happen so rarely in the Ontario auto insurance personal injury litigation context? Surely this isn’t too much to ask? Surely this doesn’t require study by an LSUC Committee?
Mr. Wright, thanks for your responses. However, although my comments might have appeared as such my intention was not to suggest that “lay” persons should practice law or do the work of lawyers that decision would be entirely up to the legislators (who may or may not be influenced by potential non-lawyer owners). What I had intended is that lay persons may be just as well-suited as lawyers to manage the business of a firm and leave the lawyers to practice law whether they should be owners/partners is an entirely different issue which may also in the end be decided by government intervention/policy. ABS could be used as the political answer to job creation and an access to justice solution (not to suggest that it is necessarily the right solution) if the issues of a2j and high employment especially among recent graduates aren’t addressed and remedied sooner rather than later and are seen to be a political liability.
And, although “none of the lay benchers has ever claimed to be as knowledgeable in the law as the lawyer bencher” it’s nice to know that special effort is given to allowing them to have some input.
Btw, in case it wasn’t clear, I would certainly consult paralegals in areas of their expertise, and I have sent clients to paralegals when it has made sense to do so. I was also an immediate proponent of bringing paralegals into the regulatory framework of the Law Society and served on the first paralegal committee. Paralegals are invaluable in many areas of legal services, but the case has never been made that they could do small firm solicitor work either better or cheaper than small firm solicitors. Instead, history has shown that when that work is taken from small firm solicitors, the costs have gone up and the standards have gone down.
Lay persons may be very well-suited to managing the business of a law firm, but they should never become owners of the law firm. They can be well compensated by salary and bonuses based on both their own performance and the performance of the firm. Very high quality managers are available for hire on just such arrangements without compromising the independence of the legal profession.
If the government were to regard ABS as some sort of job creation scheme, they will be sorely mistaken. ABSs will be far more likely to trim staffing to the bone to ramp up the returns on their investments. The government can address high unemployment among recent law school graduates by reducing the number of unneeded law students and putting the money toward more doctors, nurses and skilled tradespeople.
Brad
Verna, you mentioned in your last paragraph, “it’s nice to know that special effort is given to allowing them [the lay benchers] to have some input”.
It does not take “special effort”. They feel no constraints at all, because there are none, when making their contributions. It is part of the DNA of Convocation. And they have more than just “some input”. Their contributions are invaluable, and for that and other reasons, highly valued.
Brad