TORONTO, Feb. 27, 2014 /CNW/ - The Law Society of Upper Canada's board of directors approved the launch of a consultation on alternative business structures (ABS), becoming one of the first North American regulators to undertake such an initiative.
"We want to engage the legal profession and other interested stakeholders in a thorough consultation about the concepts put forward by the Law Society's ABS Working Group in its February report to Convocation," says Law Society Treasurer Thomas G. Conway.
"Alternative business structures may be able to provide more options and choices for consumers, thereby improving access to justice. These alternative structures may also lead to more innovation for the profession. Investments in information technology, for example, could create more convenient public access to legal services — and at the same time help lawyers and paralegals develop efficiencies that would enable them to provide services at a lower cost," he says.
"We need to hear from lawyers and paralegals and any other interested groups about these ideas, so we can determine how best to proceed."
The Working Group was established in 2012 to explore various possible options available for the delivery of legal services, including structure, financing and the related regulatory processes — and to recommend specific models and arrangements suitable for Canadian and Ontario contexts.
Following initial research and preliminary consultations with the profession in 2013, the ABS Working Group developed four potential structural and services models for consideration. They consist of business entities that provide:
- legal services only, and allow non-licensees up to 49 per cent ownership.
- legal services only, with no restrictions on ownership by non-licensees.
- both legal and non-legal services, except those identified as posing a regulatory risk, where non-licensees would be permitted up to 49 per cent ownership.
- legal and non-legal services and any other services, except where there is sufficient regulatory risk, where non-licensees would be permitted unlimited ownership.
The Working Group will prepare a report following its consultation, including recommendations, for Convocation's consideration.
Convocation also approved the ABS Working Group's recommendation that the Law Society further develop a framework for the regulation of law and paralegal firms and other business entities that provide legal services.
This would provide the Law Society with greater ability to engage in more proactive and preventive regulation that could increase public protection.
As well, the governing board also approved further exploration and consideration of a compliance-based regulatory regime by the appropriate Law Society committees. Under such a framework, licensees and law firms would be required to have a process in place to respond to complaints.
Additionally, Convocation gave the ABS Working Group approval to consider and propose potential revisions to Law Society rules and bylaws regarding fee-sharing, referral fees, direct supervision and ownership restrictions — to ensure they are proportionate to the risks they are designed to reduce.
"Amendments to our rules and bylaws could provide lawyers and paralegals with greater flexibility, enabling them to find more efficient ways to deliver their services to the public," says Treasurer Conway.
Details about the ABS consultation process will be provided to Convocation at a later date.
The Law Society regulates lawyers and paralegals in Ontario in the public interest. The Law Society has a mandate to protect the public interest, to maintain and advance the cause of justice and the rule of law, to facilitate access to justice for the people of Ontario and act in a timely, open and efficient manner.
SOURCE: The Law Society of Upper Canada
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