2017: Regulating Law Firm Culture
As we say goodbye to 2016, it’s time to embrace 2017. For 2017, law societies should place an emphasis on regulating law firms.
A law firm’s culture seeps into the very make-up of its constituent lawyers. An unethical culture breeds unethical lawyers. An ethical culture breeds ethical lawyers.
In “Regulating Law Firms in Canada“, Professor Adam Dodek states that the absence of law firm regulation undermines the legitimacy of law societies. I agree.
Under the pressure from law firms to meet deadlines, win cases, win motions, appease clients, and surrounded by a certain firm culture, lawyers may find themselves suddenly doing things they never thought possible. For example, a mid-level associate in a large firm may fail to disclose a potential conflict of interest. But by disciplining only that individual lawyer, law societies “miss part of the story of how the practice of law operates and how it should be regulated.”
Professor Dodek explains:
Law firms are front and center in the lawyer-client relationship. As Lucie Lauzière has written, “[t]he law firm is now the intermediary between client and lawyer.” This is certainly true in terms of advertising, solicitation, client intake, conflicts of interest, retainer agreements, billings and many other interactions that clients and potential clients have with the delivery of legal services via “the firm.” With larger law firms, the influence of a collective culture may be even stronger.
Law Societies should regulate law firms because of the enormous power that law firms exert over the behaviour of its constituents. Behaviour once seen as obscene, now normalized by a law firm’s culture, may become second nature to its lawyers. Through the regulation of law firms, law societies can promulgate ethical standards.
There are many ways to regulate law firms. The three most powerful ways to do so are licensing, audits, and discipline. First, law societies should license law firms. This should include a vetting process. Second, law societies should audit law firms as a whole. The audits should include looking at professional conduct practices. Third, law societies should discipline law firms for the behaviour of its lawyers. The discipline of law firms can include fines, suspension of license for the firm, revocation of license for the firm, the imposition of policies, and announcements to the profession of “bad” behaviour of the firm.
Firms need to take responsibility for their individual lawyers. Not every bad apple is a rogue apple. And its time for our law societies to go beyond the individual and take a hard look at the law firms themselves.
A movement to do regulate firms has been afoot for some time, and has slowly gained momentum with amendments to various legal professions acts to set up the necessary authority for benchers. Nova Scotia, Quebec, Ontario, Alberta, Saskatchewan, Manitoba and British Columbia are all at various stages of developing their own frameworks. A good source of information is the Law Society of British Columbia’s Interim Report of the Law Firm Regulation Task Force: https://www.lawsociety.bc.ca/docs/publications/reports/LawFirmRegulation-2016.pdf. In addition to discussing BC, it surveys the state of play in Canada, England and Australia. The report is a consultation document, but makes recommendations to support what it characterizes as “a proactive, principled, outcomes-based regulatory structure that is supported by a limited number of prescriptive elements designed to strengthen compliance.”