Shareholder Agreement Template

Please keep in mind that this is not legal advice.  The information provided herein is for educational purposes only. If you would like to get in touch with a lawyer to help you draft, interpret, negotiate or resolve a dispute about a shareholders agreement or unanimous shareholder agreement, then you are encouraged to seek a professional (e.g. make a post on Dynamic Lawyers).  We have Ontario lawyers who can assist you in this regard (I would know, I’m one of them!).  If you want to get in touch with me directly, feel free to email me directly to discuss all your shareholder agreements needs!

So this is a follow up to my recent post about Shareholder Agreements in Ontario.  In this blog, I’ll be talking about some of the nuances of a typical shareholders agreement.

Shares, Shareholders, and Shareholders Agreements
So lets start off with the basics, shall we?  Corporations are separate legal persons.  They are separate from their owners (called shareholders) and managers (typically, the officers, directors, and employees).  They have their own rights, duties, etc.

Now, whoever owns the shares of the corporation owns the corporation.  These persons – who can be individuals, corporations, partnerships, etc. – are called shareholders.  There may be different types of shareholders, depending on how the corporation was initially structured.  For example, if the corporation wanted SOME people to control it, then those people would have VOTING shares.  Other people who owned part of the corporation but did not have control over it would have NON-VOTING shares.  The VOTING shares are used at shareholder meetings to vote in a board of directors (who appoint the officers) to manage the corporation.  Those with NON-VOTING shares don’t get to vote anyone in.  If you want to know more about the rights, privileges, conditions, etc. of shares, you can skim through my other blogs about corporate shares here and classes and series of shares here.

Now, upon dissolution, the assets of the corporation will be liquidated and paid out to creditors and shareholders.  Certain shareholders may have priority over other shareholders.

There may also be restrictions on a shareholder’s ability to transfer the shares.  For example, the consent of the board of directors or the shareholders may be required to do so.  There may be other kinds of restrictions or obligations you want to attach to the shares.  These things (among other things) can be taken care of through a SHAREHOLDERS AGREEMENT.

When are they used?
Shareholders Agreements are typically used when parties are either first starting a company and want to outline their respective rights, privileges, duties, etc. or when parties are admitting new shareholders to the corporation.  The latter is typically the case when venture capitalists (financiers) want to help get the corporation’s business up and running.  The purpose of the shareholders’ agreement is to govern the relationship between the shareholders.  Without one, there can be many disputes that arise and which get resolved in a costly and time consuming manner: namely, court!  So having certainty over many of the important issues found in a  shareholders agreement CAN actually help to avoid or mitigate future disputes since everyone will (or at least “should”) know what they’re getting into.

They are private and comprehensive
Remember: a shareholders agreement is generally a private agreement which is not in the public realm (unless it is disclosed as part of a lawsuit).  This can be contrasted with the articles of incorporation (the document which creates the corporation) which is available to the public and which may also deal with certain things that the shareholders agreement deals with (e.g. restrictions on share transfer) but which is not as comprehensive.  Therefore, for the sake of confidentiality and comprehensiveness, it is recommended to have a shareholders agreement and not simply rely on articles of incorporation!

Shareholders Agreement Typical Structure
So what can a typical shareholders agreement deal with?  Well, a typical shareholders agreement can deal with things like:

1. Control and Management
2. Transferring Shares
3. Valuing Shares
4. Non-Compete and Non-Solicitation
5. Confidentiality
6. Resolving Disputes
7. General Terms

I’ve previously blogged about these things, so I would encourage you to keep reading to educate yourself!

Additional Resources to Learn About Shareholders:

1. Online School – Learn about shareholders and corporations in legal and business classes.
2. Shareholders – Definition

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Please keep in mind that this is not legal advice.  The information provided herein is for educational purposes only. If you would like to get in touch with a lawyer to help you draft, interpret, negotiate or resolve a dispute about a shareholders agreement or unanimous shareholder agreement, then you are encouraged to seek a professional (e.g. make a post on Dynamic Lawyers).  We have Ontario lawyers who can assist you in this regard (I would know, I’m one of them!).  If you want to get in touch with me directly, feel free to email me directly to discuss all your shareholder agreements needs!

Here, I’ll be discussing a basic template and things you should consider/pay attention to when thinking about these types of agreements.  For the purpose of this blog post, I’ll be discussing unanimous shareholder agreements in the context of the Canada Business Corporations Act.  Before diving into the nuts and bolts of the template agreement, however, I think I’ll take a step back to discuss some of the basis about shareholders agreements generally…

What is a Unanimous Shareholder Agreement?
A unanimous shareholder agreement is defined under the Act (s. 146) as a lawful written agreement among the shareholder of a corporation (some or all of them) that restricts, in whole or in part, the powers of the directors to manage or supervise the management of, the business and affairs of the corporation.  So a shareholder agreement is basically an agreement that allows the shareholders to usurp and override the powers of the directors (e.g. the shareholders become the directors or they agree to each appoint 1 director on the board of directors, etc.).

Violation of the agreement on the part of a shareholder can lead to a breach of contract claim.  If and when shareholders take over the power of the directors to manage the corporation, the Act gives them the same rights, power, duties, and liabilities as a director of the corporation.  This is important because generally shareholders’ liability is limited under the Act (in other words, unless a party can pierce the corporate veil, shareholder’s personal liability and personal assets cannot be exposed to having to pay for damages of the corporation, its representatives, agents, employees, directors, etc.).

Shareholder agreements are important to have early on in the corporation’s life because it details the rights and obligations of each shareholder, including management issues and share transfer provisions.  It puts expectations on the table early on.  Shareholder agreements are much harder to enter into between shareholders later on when progress (which carries with it political jealousies and potential infighting) has been made.

Finally worth mentioning is that the Act makes certain corporate requirements and powers subject t0 a shareholder agreement, including:

• Special majorities for director or shareholder votes (s. 6(3));
• The power to borrow and give security (s. 189);
• Issuance of shares (s. 25(1));
• Directors’ ability to manage, or supervise the management of the business and affairs of the corporation (s. 102);
• The making, amending or repealing of by-laws (s. 103);
• The appointing of officers (s. 121);
• Directors and officers compliance with a unanimous shareholders agreement (s. 122(2)); and
• Directors and officers remuneration (s. 125).

A copy of the shareholder agreement must be kept at the corporate head office (along with the other documents in the minute book).

How much does a Shareholder Agreement cost?
Shareholder agreements vary in cost (e.g. from $2,500 to $10,000), depending on the complexity of the provisions in the unanimous shareholder agreement.  For example:

• What will be the business of the corporation?  Will this be restricted?
• Who are the parties (e.g. voting and non-voting shareholders)?
• What mechanism will be used by the shareholders to elect or appoint board members?
• What mechanism will be used by the shareholders to vote their shares?
• What mechanisms will exist for shareholders to sell or transfer their shares (e.g. shotgun, put/call, consent sales, auctions, piggy back, drag a long, etc.)?
• What about compensation for shareholders who become working shareholders/directors?
• What about working shareholders who become inactive?  How will their shares be treated upon inactive?
• What about confidentiality, non-solicitation, and proprietary information provisions?  Are these needed?
• How will the agreement be terminated?  Can dissolution result from a shareholder complaining about a breach of the agreement?
• General provisions such as notice, entire agreement, currency, assignment, severability, waiver, independent legal advice, etc.

So with these things taken care of, let’s get into the real meat and potatoes of a shareholder agreement template, shall we?

Parties
Make sure to properly identify the parties.   You should have the correct spelling of the parties’ names.  Also, identifying features such as “X is a corporation incorporated under the laws of Canada with a mailing address at” is also good.  If you have too many parties, you may want to use a Schedule, where all of the parties for example are holders of a particular class of shares, etc.

Recitals
Here, you’ll want to put some basic information about the corporation, the parties, and the reason for their entering into a unanimous shareholder agreement.   It’s pretty common to see something in this section like:

• The authorized capital of the Corporation is X;
• The issued and outstanding shares of the Corporation is X;
• The parties want to enter into this agreement to fix and determine their respective rights, duties, obligations, etc. with respect to each other and the Corporation.

Preliminary Matters
In the first real section of the unanimous shareholder agreement, you’ll probably want the parties to confirm the truth and completeness of the recitals and define terms used throughout the Agreement.

Business of the Corporation
In this section, you may want to define the business of the corporation.  This will come in handy with respect to non-compete provisions and agreements which restrict parties’ ability to compete with the Corporation in the business (however that is defined).

Operation and Control of the Corporation
Here, it’s typical to find provisions that say that the discretion and powers of the directors to manage and supervise the management of the corporation are being restricted and usurped by the Shareholders.  Essentially, the Shareholders are relieving the Directors of their powers.

The provisions in this section go on to provide details – often akin to the Corporation’s by laws – on how the Shareholders as both the Directors and the Shareholders will conduct meetings (e.g. nominees, notice, quorum, casting votes, elections and appointments, passing resolutions, etc.).

The provisions in this section may also include specific requirements for the Corporation to enter into contracts (e.g. X number of Directors required) or for the Corporation to do things with respect to issuing shares, borrowing money, selling or leasing Corporate property, amending the Corporation’s articles, continuing the Corporation in another jurisdiction, winding up or dissolving the Corporation, etc.  These things may require special majorities (i.e. majorities which are not specified anywhere in the Act).

You’ll also find provisions in this section of the unanimous shareholder agreement dealing with things like who the officers of the Corporation will be, keeping proper books of account, appointing a banker, etc.

Restrictions on the Issue and Transfer of Shares
This is a very important part of any shareholder agreement: restrictions on share transfers.  There are many ways to restrict transfers on shares, some of which include:

• General prohibition against the Corporation and the Directors for issuing new shares.
• General prohibition against existing shareholders from transferring, selling, assigning, etc. their existing shares.
• A requirement that any party that does, through one of the permissible ways of acquiring shares, acquire shares becomes bound to and a party of the unanimous shareholder agreement.

Here are some of the ways in which share transfers are permitted/restricted:

• Consent Sale: a shareholder can transfer their shares after obtaining the consent of a pre-determined number or percentage of other shareholders.
• Right of First Refusal: a shareholder who receives an offer from a third party for the purchase of their shares must first offer the other existing shareholders the opportunity to purchase those same shares on terms, for example, that are equivalent to the third party’s offer.
• Shot Gun Buy-Sell: a shareholder can name a price at which it is willing to either buy or sell its shares.  The offer is then presented to other shareholders who have a specific amount of time to decide whether to accept the offer.
• Right to Come Along (Piggy-Back): when a shareholder who sells to a third party, the other shareholders are entitled to have their shares sold on, for example, the same terms to that third party.
• Right to Take Along (Drag Along): when a shareholder sells to a third party, the other shareholders are forced to have their shares sold on, for example, the same terms, to that third party.
• Option to Purchase (Call Option): this right gives a shareholder/Corporation the option to purchase shares in certain circumstances (these are called Triggering Events) from the Corporation/shareholder.
• Option to Sell (Put Option): this right gives a shareholder/Corporation the option to sell shares in certain circumstances from the Corporation/shareholder.
• Auction: an auction is a mechanism whereby shares are sold to the highest bidder (or on certain terms of the auction) to third parties.

In each of these circumstances, there are a few common variables: timing or an event occurring, valuing the shares, and rights/obligations affecting the other shareholders, closing provisions, identification of the buyer/seller/third parties (if any), etc.

Confidentiality
If a Shareholder receives Confidential Information (which should be a defined term) in the course of being a Shareholder, Director, Officer, employee, etc. then they should be restricted in what they can do with that information.  I’ve previously blogged about confidentiality agreements, so you can refer to that blog for more information about drafting, understanding and negotiating confidentiality agreements here.

Proprietary Rights
This section will deal with things like defining intellectual property rights (remember that there should be a definition for both proprietary rights and developed proprietary rights), who they belong to, the waiving of any moral rights under the Canada Copyright Act, and an agreement to obtain protection of intellectual property rights.

Non Competition
This section will deal with the repercussions, if any, of a Shareholder who starts competing with the corporation in the Business (which should be a defined term).  To make these provisions enforceable, they should be specific enough (e.g. by identifying parties, the Business, a time line, etc.).  I’ve written a lot about restrictive covenants such as non-compete and non-solicitation clauses and I’d encourage you to check them out here (but make sure to contact a lawyer to have them properly drafted!):

• Introduction
• General Overview
• When to sign ‘em (employment context)
• Too vague / unclear
• Justification Test
• Traps to watch out for (employment context)

Dispute Resolution Clauses
If you want to avoid the cost, time, headache, and uncertainty of litigating disputes in respect of the Shareholder Agreement, you might want to include a dispute resolution clause.  These clauses can say something like: the parties agree that any and all disputes and questions that arise between any of the parties in connection with the Shareholder Agreement (or construction or interpretation or application thereof), any section of the Shareholder Agreement, or any document, act, omission, etc. related to the Shareholder Agreement shall be resolved by mediation or arbitration (or perhaps mediation fist, and then arbitration).  In either case, you should specify how many mediator(s) and arbitrator(s) will be appointed, who will pay for them, where the mediation or arbitration will be held, how the procedure will be determined (by the parties or by the mediator or arbitrator?) and whether an appeal is available from the decision of the arbitrator (mediator decisions are generally non-binding).

Termination
Here, provisions may be put in place to initiate termination of the agreement where:

• There is only 1 shareholder left.
• A shareholder dies, becomes disabled, or goes bankrupt, etc.
• There is a breach of the shareholder agreement.
• A specific number or percentage of shareholders mutually agree to terminate the agreement.

General Terms
Here are some of the general terms that I’ve typically found in Shareholder Agreements (and other agreements for that matter):

• Notice (how do the parties give notice under the agreement for things like termination).
• Further Assurance (sometimes, you need the parties to the agreement to give additional representations and warranties such that they say they have all the requisite power and authority to do everything they’ve promised to do under the Agreement and that they will do those things as promised).
• Assignment (e.g. is this to be done by the parties having to consent in writing?).
• Survival of terms (i.e. if a term is found by a court to be void, should the rest of the agreement survive?).
• Governing Law (which jurisdiction governs the interpretation and enforcement of the agreement?).
• Amendment (how is this to be done?).
• Entire Agreement (i.e. this agreement supersedes all other agreements – whether oral or written – relating to the same subject matters in the agreement)
• Waiver (e.g. no failure or delay of a party to enforce or exercise its rights under the agreement constitutes a waiver, etc.).
• Interpretation (singular vs. plural; masculine vs. feminine, section headings, etc.)
• Power of Attorney (shareholders sometimes require that, if any shareholder neglects or refuses or is unable to execute or deliver any document required to be delivered, then they shall be deemed to have appointed the Corporation as his or her lawyer attorney and agent for such purposes).
• Independent Legal Advice (an acknowledgment by the parties that they have been told to and have received independent legal advice concerning the nature and substance of the Shareholder Agreement).
• Severability (in case one provision is struck down and rendered invalid doesn’t mean the rest of the agreement is).
• Currency (in which currency do dollar amounts referenced in the Shareholder Agreement pertain to?).

Please keep in mind that there are many other kinds of terms and conditions you can find in the general terms section of this agreement.  You should consult with a lawyer to address these general terms.

Execution
The final section of the agreement (other than any schedules or exhibits) requires that the parties, or duly authorized representatives of the parties with the power to bind, execute the agreement.  It is sometimes a requirement that witnesses be present and sign their names alongside the parties’.

In conclusion, this blog has discussed a basic unanimous shareholder agreement template.  You should note, however, that the particular details of a unanimous shareholder agreement vary depending on the needs of the shareholders and the business.  These documents should be put together by lawyers (such as myself) who are trained, knowledgeable, and experienced professionals.

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Looking for an Ontario Independent Contractor | Consulting Agreement?  Well, you’ve come to the right place. While it’s not FREE, it’s a sweet deal!  For $97, you get a downloadable, simple to read, and easy to customize legal form.  The legal form is lawyer-prepared and can be opened in various software (e.g. wordperfect, word, text editor) because it comes in .doc, .rtf, and .wpd formats.  Best of all, this legal form comes with a FREE VIDEO GUIDE (watch an example of this legal form can be customized), a 10 page FREE WRITTEN GUIDE (read helpful information about this legal form) and ANOTHER 8 page FREE WRITTEN GUIDE (entitled “Is My Legal Form Valid and Enforceable?”).  ALL FOR $97 plus taxes…that’s a pretty sweet deal…so what are you waiting for?  FYI, if you came to me (or other lawyers for that matter) and asked me to prepare one of these agreements for you from scratch, you’d end up paying hundreds if not a few thousand dollars for the legal form and all the guidance of this one package!

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Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to an Employment Agreement, you should seek professional assistance (e.g. make a post on Dynamic Lawyers). We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario lawyers registered to help you.

This is the eighth of a series of blog posts about Employment Agreements in Ontario. In the first blog, I talked about who is an Employee and how they differ from independent contractors. In the second blog, I discussed why Employment Agreements are used and what makes them different from ordinary commercial agreements. In the third blog, fourth blog, fifth blog, sixth blog and seventh blog I discussed some of the basic terms you will find in a standard contract template for an Employment Agreement with an indefinite term. Here, I’ll be talking about some tips and traps an Employer should be aware of when it comes to drafting, reviewing, and negotiating an Employment Agreement.

Tip #1: Put it in writing!
Wow.  Employers assume things.  They do it all the time.  Who can blame them?  Well, if things go afoul with their employees, they can and should be blaming themselves if they never entered into a written Employment Agreement.  Instead of having a he-said / she-said debate about job title, responsibilities, pay, benefits, termination, and restrictive covenants (which are all very contentious issues), put it in writing from the get go and BEFORE the employee start working.  If you need a lawyer to help you draft a customized employment agreement, you can contact me directly.  You need to define the rights, responsibilities, and duties of the Employer and Employer if you want to avoid costly litigation!

Tip #2: Make sure the Employment Agreement is Clear, Certain, and Complete
Ahhh…the triple C: Clear, Certain, and Complete.  These are general grounds upon which an Employment Agreement can be invalid and unenforceable in whole or in part: it was vague and ambiguous (open to interpretation) and missing certain important terms (e.g. compensation, duties and responsibilities).

Importantly, if certain things are NOT SAID, courts may imply them as terms of the Employment Agreement. For example, Courts will assume that the Term of the Employment Agreement was INDEFINITE (i.e. starts on one day and doesn’t end until the Employee resigns or is terminated) unless the Employment Agreement says in very clear and unequivocal language that it is for a FIXED TERM.  Courts will also assume that, absent a fixed term contract or contractual notice provision, an Employer can dismiss an employee by giving them reasonable notice or payment in lieu of notice.  Furthermore, Employers can also dismiss an employee for Just Cause without paying them notice or payment in lieu thereof.

Finally, if an Employer fails to include certain terms in the Employment Agreement but merely reference them in other documents (e.g. policies, manuals, etc.), then Courts may disregard these external terms and conditions.  For example, in Christensen v. Family Counselling Centre of Sault Ste. Marie & District (2001), 151 O.A.C. 35, the Ontario Court of Appeal found that an Employment Agreement that tried to incorporate termination provisions in a policy manual did not rebut the common law presumption of REASONABLE NOTICE.  Recall that REASONABLE NOTICE is the amount of notice or payment in lieu thereof at common law (i.e. based on judge-made law) which an Employer will be required to give an Employee in order to terminate them.  The Employer can rebut the presumption that they owe the Employer notice or payment in lieu thereof through a clear and unequivocal Employment Agreement.  So in Christensen, the fact that there were too many interpretations of the Employment Agreement concerning whether the termination provisions in the employee manual rebutted the presumption of REASONABLE NOTICE led the court to conclude that id didn’t: it wasn’t clear and unequivocal.  Therefore, they didn’t apply.  OUCH!

Tip #3: The Whole Deal
Employment Agreements – for whatever reason – sometimes fail to include an Entire Agreement clause in the General Terms (that’s where I put this clause, in any event). This clause basically says that the subject matter of Employment Agreement (i.e. the employment) is covered only by the agreement itself and not by external discussions, contracts (oral or written), or understandings.  Those things are superseded and replaced by the Employment Agreement.  Make sure, however, that you don’t accidentally cancel out any required documents like a separate written confidentiality and non-disclosure agreements!  That would be a messy thing if you did…

Tip #4: Contra Proferentem
Since the Employer is the party drafting the Employment Agreement, courts will interpret any ambiguities in favour of the Employee and AGAINST the Employer!  This is the Contra Proferentem doctrine and Employers should be weary of it!  For more information, check out these cases: Machtinger v. HOJ Industries Ltd.[1992] S.C.J. No. 41 (Supreme Court of Canada), Ceccol v. Ontario Gymnastic Federation, [2001] O.J. No. 3488 (Ont. C.A.); and Christensen v. Family Counselling Centre of Sault Ste. Marie & District [2001] O.J. No. 4418 (Ont. C.A.).

Tip #5: Minimum Standards
OK, so you can contract out of the common law when it comes to things like giving notice or payment in lieu thereof (if you need help doing so, consult a lawyer).  But can you contract out of minimal standards legislation like the Employment Standards Act, 2000?  NOPE!  It’s minimum standards legislation for a reason.  Section 5 says:

5. (1) Subject to subsection (2), no employer or agent of an employer and no employee or agent of an employee shall contract out of or waive an employment standard and any such contracting out or waiver is void.

Greater contractual or statutory right
(2) If one or more provisions in an employment contract or in another Act that directly relate to the same subject matter as an employment standard provide a greater benefit to an employee than the employment standard, the provision or provisions in the contract or Act apply and the employment standard does not apply.

So if your Employment Agreement goes against the minimum standards legislation when it comes to things like minimum wage, maximum hours, parental leave, notice, payment in lieu of notice, severance, etc., then it will be INVALID AND UNENFORCEABLE!  The Courts will then turn to the common law doctrine of reasonable notice to determine what the employee ought to have received upon getting terminated.

By the way, if you’re an Employer and looking for an Employment Agreement (indefinite term), then you’ve come to the right place:

Employment Agreement (Client) – Indefinite Term

This Ontario Agreement can be used by an Employer who wants to hire an Employee. The “indefinite term” part means that the Agreement starts on a date provided for in the Agreement and then comes to an end only when the Employee resigns or is terminated by the Employer (by giving notice, payment in lieu of notice, or for Just Cause). Here’s the sample Video Guide that comes with this Employment Agreement – Indefinite Term:

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Toronto personal injury lawyers – are they all the same?  Is there something that distinguishes one law firm from the other?  I challenge Toronto personal injury lawyers to share – in 1-2 sentences – what makes them different from their competitors.  They basically work on contingency fee (i.e. they don’t get paid until they win or the case settles).  If they are all the same, then how are prospective users of personal injury law firms supposed to tell the difference?  Will it matter?  Do most cases settle anyways – to the point where it doesn’t matter which firm you pick because they all do the same service?  I don’t believe so.  Nothing is guaranteed and your case might be the one that goes through a lengthy and complicated trial!  Also, wouldn’t you rather have an good relationship with a personal injury lawyer who responds to your emails and phone calls, updates you on your case, and is actually prepared to go to court to fight for your rights?

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Richard Susskind – the man who influenced me to build and develop Dynamic Lawyers into what it is today – wrote a part in his book (“The End of Lawyers?”) that I want to discuss here for a moment.  That book is almost like a blueprint for me.  Heck, I even take that book when I go to media interviews.

There’s a part in that book that talks about online legal guidance.  He defines this as a disruptive technology that creates a paradigm shift.  Now you’re probably thinking: “What’s a disruptive technology and what’s a paradigm shift?”  Let me explain…  A disruptive technology, as Richard states in his book, is a technology that will disrupt the law firm (not the client).  This technology is new, innovative, and periodically emerge and fundamentally transform companies, industries, and markets.  A paradigm shift is a fundamental shift, transformation, evolution, etc. in the way something is done.  So with those definitions in mind…   Let’s get to the paradigm shift…

Before you would have to have face-to-face consultation with a lawyer (typically at their hourly rate).  So lawyers would have a monopoly over their knowledge and services.  Now, however, online legal guidance can be provided in a way that gives multiple people simultaneous access to a lawyer at a fraction of the cost.  Richard mentions a few examples, such as Linklaters, Clifford Chance, and American pioneer of online legal self-help, Rirchard Granat.

So onto my point…Dynamic Lawyers is offering legal guidance in various ways to compliment traditional legal services for those people who cannot otherwise afford a lawyer.  First, there’s the Craigslist.org-like make a post, get free quotes form local lawyers.  Lawyers compete so you win.  That’s a disruptive technology.  It sure beats having to go through the yellow pages or having to explain yourself on the phone to a lot of different lawyers. Next, there’s the free legal info that’s being provided through the DL Blog, the Legal Areas, the Stats and Reports, and through our affiliations with other websites (e.g. Legalline.ca, AdviceScene.com, IsThatLegal.ca, LegalTree.ca, etc.).  So prospective and actual users of legal services are becoming better educated.  Next, there’s the FREE Legal Health Checkup, an innovative way to check your legal health (and hopefully avoid nasty surprises later on).  Finally, our new Legal Forms + Video Guides project offers customizable and lawyer-prepared legal forms with a ton of guidance!

So there you have it!  We’ve got lots of more ideas, but we’ll focus for the time being on making the ones above even better!

DynamicLawyers truly is a disruptive technology that’s taking advantage of the paradigm shift we’re currently experiencing in the legal industry.

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As a follow up to my last blog about small claims court matters, let’s keep going…Remember: this isn’t legal advice.  It’s legal information.  If you’re looking for a small claims court lawyer in Ontario, make a post on Dynamic Lawyers.

Valuing the Claim
Remember: the amount of damages you suffered must be less than $25,000. If it is over this amount, you will have to reduce your claim to $25,000 exclusive of interest (pre and post judgment) and reimbursement of court costs or legal fees. If you are not prepared to reduce your claim to this limit, then you need to take your case to the Superior Court.

If you claim for more than $25,000 or if you split your claim into smaller portions, each under $25,000 but which altogether are over $25,000, you run the risk of having the Small Claims Court reject your claim, or a party challenging it.

The next question is how to quantify your claim. If your claim is based on an invoice or a contract price or a specific damage that is ascertainable, then you know the value of your claim. Enter this amount on the space provided on page 3 of the Plaintiff’s Claim that says “How Much?” Along with entering the amount of your claim, there is also a space on the form to claim interest. Interest may be based on an agreed upon amount (e.g. as per a contract) or in accordance with the current court rate (as per Courts of Justice Act).

If your claim is not based on an invoice or a contract price and is not readily ascertainable, then you can put down your best estimate of what your total damages will be when the dust settles up to the maximum $25,000. You can also claim interest on this types of damages.

When calculating your damages, some things to keep in mind are: out-of-pocket expenses, lost income, lost opportunities, loss of reputation, loss of value to property, etc. Emotional distress and psychological harm are not easily to quantify and there are stringent legal tests that must be met in order for a court to award damages on that basis. Besides, if you claim these latter types of damages, you may expose yourself to having to open up your medical history through the litigation.

…Next Up: Schedule A…

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Part of the reason why lawyers are not good business-minded people as a profession is because they fail to understand and appreciate what building a brand means.  I’m sure you’ll get the same old boring answers if you ask lawyers what makes them memorable/different when compared to our competitors: “we are committed to client service through the delivery of affordable, practical, timely and exceptional professional solutions”.

But if everyone is saying that, how can you differentiate one lawyer or law firm from the next?  Look at the brand names out there…Davies.  Oslers.  Stikemans.  McMillan.  And the list goes on.  The brands are people’s names.  Some of the people aren’t even alive.  These brands – if you can call them that – don’t signify much to me other than “expensive Bay Street full service law firms which only rich people and big companies can afford”.  So what about the other law firms out there?  What’s their brand all about?  I’ve only heard of Payne Law and Diogardi actively promoting their brands in different media.  That’s why the public turns to them.  Because they remember them!

Some of the law firms out there try to distinguish themselves as specialists in a particular legal area, but that’s as far as it gets.  What the public needs is to be able to easily associate a brand with its people, the type of work they do, the quality of their services, and (perhaps most importantly) some type of niche, gimmick, or idea that distinguishes them from their competitors.  Here’s a few examples of what I’m talking about::

• Yorkville Lawyers.  Slogan: “Shop.  Dine.  Get Legal Advice.”
• PC-Lawyers.  Slogan “Where Lawyers and Tech Companies Connect”.
• Done Deal Real Estate Lawyers.
• Cut-Throat Litigators.  Slogan: “You better have US on YOUR side!”
• E-Lawyers.  Slogan: “We’re Connected and Cost-Effective”.

To repeat myself, law firms have to got to start marketing and promoting themselves ACTIVELY through new mediums that reach out to their target market (e.g. social media, websites, newsletters and articles, public relations events, books or e-books, etc.).  Give a taste of your knowledge and expertise!  For those law firms out there who say, “But my clients don’t come through those mediums”, the reality is that a new breed of clients – sophisticated and information hungry ones – will be familiar with those mediums.  And they will expect you to have a robust presence on the Internet.  Besides, if you’re not there, your competitors will be.  And if anyone writes something bad about you or your law firm, the prevalence of such negative publicity will depend on how active you and your firm are in that same space.  The bottom line is that law firms need to adapt or die out and give rise to a new breed of lawyers and law firms…

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We’re looking for a lawyer who practices wills and estates in the Mississauga/Brampton area.   Someone has made a new public post looking for such a lawyer.  Here’s the nuts and bolts of the post: “How much does it cost to get a Will, Living will, and Power of attorney for a couple? In Mississauga or Brampton.”  If you are a lawyer who can respond to these prospective clients, then you should register asap on Dynamic Lawyers.   Just go here and register as a lawyer.  After payment is processed (it’s only $50/month for the year), your account will be activated and you’ll be able to sign in and respond to these users.

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So after being on Goldhawk Fights Back today (11:30 a.m. to 12:00 p.m. on AM740 Zoomers Radio with Dale Goldhawk), here’s what I have to report…First, it’s always great to get publicity for a worth cause – namely, Dynamic Lawyers (which allows users to freely and anonymously post their legal issue(s) and get information and quotes from local lawyers).  So I must say thanks to Mary and Dale for letting me talk about what I love to talk about – access to justice, empowering the consumer, specific legal issues, etc.  Second, I was impressed and astonished by the calibre of the comments and questions that came through the line.  On the one hand, people have had disastrous experiences with lawyers (problems with communication, billing, fees, representation, etc.).  On the other hand, people had quick and easy resolutions by using lawyers.  Third, the discussion tackled many important legal-related issues, ranging from access to justice, lawyer fees (in the form of the billable hour and alternatives such as fixed fees and barter exchange, etc.), contingency fees, why lawyers charge so much, invoice assessments, initial consultations with lawyers (which I’ve previously blogged about), and use of the website.  So there’s a lot of demand from the public for this and other kind of information that should be readily available.  Overall, I greatly appreciated this opportunity to discuss these important issues.  Thank you Dale GoldHawk and Goldhawk Fights Back!

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