I came across two blog entries today that deal with the issue of buying links, so I thought I’d touch upon them here.

The idea of buying links goes as follows: among many other factors, Google uses links to determine if a website should be ranked higher on its indexed pages.  The idea is that links are the relationships of the world wide web and the more popular your particular page is (because the more links it has), the more relevant it is and hence the higher it should appear for its targeted keywords.

Now what some people – and particularly SEO or Search Engine Optimization companies – offer and do is a service whereby they build dummy website that link to your site.  In effect, they are trying to trick the search engines to ranking a particular website higher because it has links.  By relying on these kinds of links, websites are disregarding the quality of the links, the sources, and the long-term impact it will have on their websites.

I liked Robert Guest’s Dallas Criminal Defense Lawyer Blog, wherein he talked about his experience with phony links and SEO companies.  In one particular example, he discussed a spam comment that had been made under one of his blog entries.  It turned out to be his own writing and it actually linked back to a prominent DWI law firm’s web site!  What had happened was that a spam comment bot just copied and pasted his own materials in the comments, but then linked back to the law firm.  All of this was done to trick Google to rank the page higher.

Another example I came across was more eye-opening.  A blog in Lead-Gen SEO described how, in the summer of 2008, popular lawyer referral service FindLaw had been caught selling links to its clients in a bid to increase their search engine rankings.  An email had been sent out – likely without being cleared by FindLaw’s inhouse counsel – that gave a message to the tune of “buy super-link-juice-passing text links from Findlaw and get top rankings in Google”.  The big problem with FindLaw’s actions was that it was also selling web development services; hence, its clients may not have realized the risk they ran (i.e. in case Google decided to punish them) by engaging in FindLaw’s services.

Overall, buying paid links on dummy websites as a form to cheat the system is against Google’s Webmaster Guidelines.  Google can (and probably should) be punishing those websites that engage in such conduct and put warnings up not to deal with certain SEO companies who engage in these depective practices.

written by admin \\ tags: google, lawyers, paid links, rankings, referrals, search engine, search engine optimization companies, seo

There are many avenues for average Torontonians to find not only a lawyer, but the right lawyer for their particular case.  Unfortunately, most of these avenues are inconvenient and sometimes very costly (e.g. an initial meeting with a lawyer could run you a few hundred bucks!).

More often than not, people find a lawyer through word of mouth referrals from family, friends, colleagues, or other professionals they do know (e.g. bankers, accountants, consultants, real estate agents, insurance agents, paralegals, other lawyers they know, etc.).  This, in fact, is how most lawyers find their clients.

Alternatively, people may turn to the Yellow Pages and simply pick an advertisement and make a phone call.  I’ve been told that people tend to pick the biggest advertisement because they somehow believe that the bigger the ad, the more successful the lawyer or law firm.

They may even turn to the Law Society of Upper Canada’s Lawyer Referral Service, which charges users $6 for a 30-minute conversation with one lawyer.

The point here is that finding the right lawyer for you is an important undertaking.  You don’t want to have the lawyer who drafted your will or acted on your house deal to represent you in a criminal case: they may not be up-to-date on court room procedure or have experience cross-examining adverse parties.

Torontonians generally only need a lawyer for a limited time and have a limited budget for such engagements. Yet it is hard for these people to distinguish lawyers and law firms from each other, especially given that many small and medium law firms have a general practice. It may also be intimidating for them to approach lawyers with their legal issues, given that doing so may cost money (e.g. $500 for the initial hour visit) and ultimately retaining a lawyer could be very expensive given the uncertainty of hourly billings.

These factors make ordinary Torontonians shy away from seeking or hiring lawyers. Those sophisticated Torontonians who surf the Web looking for a lawyer are hungry for more information than what is provided in the YellowPages or a newspaper advertisement. They are doing a Google or Yahoo search to seek out a particular type of attorney in a particular field in a particular area. They are also looking for testimonials and looking for the experience of a lawyer.

All in all, it makes perfect sense for users facing these challenges to turn to Dynamic Lawyers as a way of finding the right lawyer for the right price.  Making a post is free and anonymous, posts remain on the website for up to 45 days, and users have the opportunity to receive information and multiple quotes from local lawyers specializing in the area of law requested.  Comparing answers and then following up with the lawyer of your choice is just plain smart – particularly in a field where it is hard to compare one service provider from the next.  All in all, a very good deal…

So now that you have found the right avenue to find a lawyer in a convenient and cost-effective manner: what next?  Well, let’s talk about legal fees.  Many lawyers will charge you a fixed fee for the first consultation.  At this meeting, they’ll ask you questions about yourself and your situation.  The lawyer is trying to understand the legal issues so that he can offer you some type of recommendation on how to proceed.  If the meeting goes well, you may end up signing the lawyer’s retainer agreement, which stipulates the services that are going to be offered and the fees that are going to be charged.  The fees are typically hourly fees ranging from $200 to upwards of $1000 / hour, depending on the size of the law firm, where it’s located (and it’s physical appearance and amenities), and the particular lawyer’s expertise and reputation.

At the first meeting with the lawyer, you should ask some basic questions related to:

1. What services will the lawyer specifically provide;
2. Billing, costs and budget;
3. Time line;
4. Communication (e.g. by phone, e-mail, etc. and how regularly);
5. Past Experience in a particular field;
6. Strategy;
7. Style (e.g. aggressive trial lawyer or alternative dispute resolution lawyer); and
8. Terminating the retainer (e.g. failure to pay, failure to act, breakdown in the relationship, loss of confidence, etc.).

written by admin \\ tags: breach of contract, charity status, Civil Litigation, commercial agreements, company intellectual property, criminal case, criminal offence, divisional court, employment agreement, family friends, finding the right lawyer, government action, government need, human rights and freedoms, landlord and tenant, law firms, law firms toronto law office toronto, law society of upper canada, lawyer referral service, lawyers, lawyers in Toronto, legal claim, legal toronto, notarize, referrals, small claims court, support government, toronto law firms, toronto lawyer, toronto legal services, Wills and Estates

In his blog (“the [non] billable hour“), Matthew Homann (lawyer, mediator, blogger and entrepreneur) recently wrote a blog entitled “Let Your Clients Decide Your Price” (March 9, 2009).  In that blog, Matthew challenged lawyers to let their clients set the price of the work they do – after it is done!

This is revolutionary, not only for the legal industry, but in virtually every industry I can think of.  Matthew says he uses this pricing model for all of his consulting work.  He even provides a sample invoice which he uses for his own clients.  Clients decide, no questions asked!  Matthew states that, even though his clients decide how much to pay, he requires payment and feedback within 21 days after clients receive the invoice.

Now I’ve been trying to think of where else this kind of billing alternative exists.  Nothing comes to my mind immediately.  Rather, as they taught me in business school and in the school of life, suppliers of goods and services set their prices beforehand.  They do so in light of their own costs (the bottom), competitor costs (the middle), and any premium they can charge because of some kind of competitive advantage (the top).  Prices are set so that clients can shop around as well to figure out what exactly is the market value of the thing they’re purchasing.  So in certain industries, it’s clear that his recommended model may not work.

Now what about the potential disadvantages with Matthew’s model.  I’m sure he knows them well.  What if clients continue to take advantage of the service provider?  What if clients don’t pay (hence, lawyers take retainers up front to help them ensured getting paid and having reserves for when future legal services are needed)?  What if there is bickering at the end about the true value of the legal services provided?  Is this going to get us any closer to determining what’s a fair billing model in the eyes of both the lawyer and the client?

Granted, Matthew’s model may make sense in certain industries where it’s relatively easy for the consumer to determine what the price is of the thing they’re purchasing.  They can shop around, get a sense, and then make a judgment call.  They can punish you by giving you less.  They might even reward you by giving you more.  Maybe it’s better for established clientelle who have no difficulty paying and who appreciate the value of your services.  I’d be more comfortable doing something like what Matthew recommends in these limited circumstances.  But I wouldn’t open up my entire practice to this billing model any time soon…

Remember that not everyone is at the same stage in their life.  Some of us are just starting out our practices and will have some hard lessons to learn along the way.  Some of us have decades worth of experience, a solid reputation, established clientele and a large referral base, etc.  So I would take what Matthew says with a grain of salt before diving in too soon…

written by admin \\ tags: alternative billing, billable hour, blog, business school, competition, competitive advantage, competitor, entrepreneur, ger, homann, lawyer, lawyers, Let your clients decide your price, mediator, pricing model, referrals, reputation, retainers, s, sample invoice, sampling, service provider, true value

Before opening up my own practice, Carabash Law, I relied on Michael Porter’s 5 Forces Model (Competitive Strategy: Techniques for Analyzing Industries and Competitors) – which is used to assess the attractiveness of any given industry using five separate perspectives – to analyze the solo/small law firm industry in and around where I live.  Each of these 5 factors will be examined in turn.  This analysis also helped me to identify the key success factors for that industry (which I will discuss in the next blog).

1. Threats of New Entrants: Moderate
“The threat of entry into an industry depends on the barriers to entry that are present, coupled with the reaction from existing competitors that the entrant can expect. If barriers are high and/or the newcomer can expect sharp retaliation from entrenched competitors, the threat of entry is low” (source:  Competitive Strategy: Techniques for Analyzing Industries and Competitors, p. 27). Factors affecting the threat of new entrants in the targeted law firm industry primarily include the fear of “hanging out one’s shingle” and “going it alone”, the lack of legal and business management skills, knowledge, and experience, necessary operating costs and capital expenditures on office equipment/layout and information technology systems (e.g. research, documentation, billing, etc.), and accessibility to new clients.

The threat of new entrants into the targeted law firm industry seems relatively low. To establish a law firm, lawyers need to be licensed member in good standing of the Law Society of Upper Canada (which required getting into and completing law school, passing the Bar Admissions tests, and articling for 10-months), which acts as a significant first barrier to entering the industry. Throughout their minimum 7 years of university studies, law students accumulate large student loans and debts, which may take years to repay. Furthermore, many articling students and lawyers do not have the sufficient legal research, writing, presentation, and inter-personal skills to effectively market their services to the public in a meaningful way.

Establishing and managing a business also involves risk, time, expenses, and patience – something many people may not be fortunate to have in their lives (e.g. they may have a mortgage, be married with kids, have car payments to make, etc.).

Indeed, establishing a new business – but perhaps even more so a legal business which involves regulatory oversight from the Law Society of Upper Canada – involves a lot of additional management considerations which lawyers may be unfamiliar with and scared of. Lawyers may not, for example, understand or properly execute organizational theory, supply chain management, information technology systems, human resources managing, advertising and promotion, accounting and finance – in other words, areas of business management which affect their clients’ and their own practice.

Start-up costs are relatively low. Such costs typically include rent, a computer with internet access, a telephone/fax and related services, business cards, and other stationary (e.g. letterhead, paper, pens, stapler, etc.).

A successful firm will also require a steady stream of clients – something which is not guaranteed. Accessibility to clients may depend on word of mouth advertising, a convenient location, being situated near target markets, etc. A new firm would also have to coerce clients of existing law firms to switch over – something they may be reluctant to do because of their affiliation and sense of loyalty to one particular lawyer/firm.

Another factor affecting the threat of new entrants is the accessibility that potential entrants would have to the necessary labour pool. This, however, is not likely to create a high barrier to entry because the availability of administrative staff seems to be in abundance.

Finally, given the fragmentation and diversity of the targeted legal industry, newcomers need not expect swift or sweeping retaliation from established competitors in the form of price wars and special promotions and programs.

2. Bargaining Power of Suppliers: Moderately low
“Suppliers can exert bargaining power over participants in an industry by threatening to raise prices or reduce the quality of purchased goods and services. Powerful suppliers can thereby squeeze profitability out of an industry unable to recover cost increases in its own prices” (source: Porter, Michael E., “How Competitive Forces Shape Strategy” (Jul-Aug 1997), Harvard Business Review, p. 5). A supplier group is generally powerful if it is dominated by a few companies and is more concentrated than the industry it sells to.

The bargaining power of suppliers in the targeted law firm industry is moderately low. While some suppliers (e.g. of stationary) can be easily replaced with little transaction costs, other suppliers (e.g. application software, information management systems, research databases, etc.) can be difficult not to rely on. That being said, there are my alternative and sometimes free sources which can be used as a substitute to those suppliers. Moreover, suppliers of utilities (e.g. hydro, electricity, telephone, gas, internet, etc.), labour, and various services (e.g. cleaning, repair, vending, etc.) are generally either too small, widespread, or do not differentiate between this and other industries.

3. Bargaining Power of Buyers: Moderately low
“Buyers compete with the industry by forcing down prices, bargaining for higher quality or more services, and playing competitors against each other – all at the expense of industry profitability” (source: Competitive Strategy: Techniques for Analyzing Industries and Competitors, p. 24) .

The bargaining power of buyers in the targeted law firm industry seems to be moderately low. Granted, lawyers do offer some services for which only they can deliver (e.g. representation before a court, public notary/commissioner for taking affidavits, etc.). Yet competitors such as other law firms, consulting companies, and paralegal firms can perform legal services but at a cheaper rate. Moreover, access to information through the internet may allow potential clients to engage in self-help (e.g. drafting a commercial agreement, registering a corporation, filing a divorce, etc.) or conduct their own legal research (e.g. www.canlii.org). These things being said, the firms in the targeted legal industry do not advertise their prices and individuals may not be able to distinguish one firm from another – ultimately hiring the first lawyer they find or are referred to. When it comes to promoting and protecting one’s legal rights and obligations, people may not be as open to shopping around because legal services may be seen as more than a commodity and more of a value-added service. Also, law firms impose relatively high switching costs (e.g. lawyers may demand payment for switching before handing the client’s file over to them) for clients who decide to take an active matter elsewhere before it is finally resolved.

Ultimately, buyers may not do as much shopping around for legal services as they might for retail products because of the lack of meaningful information available to them. Typically, clients hire a lawyer through word-of-mouth referrals, which means that they have little purchasing power.

4. Threat of Substitute Services: High
“Substitutes limit the potential returns of an industry by placing a ceiling on the prices firms in the industry can profitably charge. The more attractive the price-performance alternative offered by substitutes, the firmer the lid on industry profits” (source: Competitive Strategy: Techniques for Analyzing Industries and Competitors,p. 23).

The threat of substitute services is somewhat high: primary competitors can be found in thousands, while secondary competitors (such as consulting companies and paralegal firms) promote themselves for low-cost alternative legal services.

5. Intensity of Rivalry among Competitors: Low
“Rivalry among existing competitors takes the familiar form of jockeying for position – using tactics like price competition, advertising battles, product introductions, and increased customer service or warranties” (source: , p. 17).

The primary and secondary competitors generally have not distinguished themselves from one another and, as such, do not have an effective strategy. They do not seem, in their advertisements or other marketing communications materials, to understand or appreciate what the competition is doing to win clients over. And because they do not openly advertise their fees or offer warranties to compete, the intensity is relatively low. Given that most of the competitors can offer the same fitness classes and programs, they can only distinguish from one another based on price and non-price factors (e.g. quality of services, environment, brand image, etc.).

Michael Porter’s 5 Forces Model Conclusion
This 5 Forces analysis indicates that, overall, the attractiveness of the targeted law firm industry is considered moderately high. Despite the relatively low start up costs, low supplier and purchaser power, and low intensity among rivals, developing and managing a successful law firm has significantly high start-up costs which cannot be easily learned or accumulated.

written by admin \\ tags: 10 months, 5 forces analysis, admissions tests, affiliations, attractiveness, bar admissions, bargaining power, barriers to entry, blog, business management skills, capital expenditures, commissioners, competition, competitive strategy, competitor, court, equipment layout, information technology systems, key success factors, law society of upper canada, law students, lawyer, lawyers, low Michael Porter, Michael Porter, newcomer, notary, paralegal, paralegals, passing the bar, practitioner, referrals, research documentation, retaliation, s and marketing, separation, shingle, solo, start up costs, start-up, student loans, supplier power, technology, threat of new entrants, threat of rivals, threatening

It’s probably safe to suggest that most ordinary Torontonians do not personally know or have immediate access to a lawyer to help resolve their legal issues.

Rather, they may depend on their friends, colleagues, or other professionals they do know (e.g. bankers, accountants, consultants, real estate agents, insurance agents, paralegals, other lawyers they know, etc.) to refer them to a good lawyer who specializes in the field they require.

They may turn to the Yellow Pages (either online or the big yellow book) and simply pick an advertisement and make a phone call.  I’ve been told that people tend to pick the biggest advertisement because they somehow believe that the bigger the ad, the more successful the lawyer or law firm.

They may even turn to the Law Society of Upper Canada’s Lawyer Referral Service, which charges users $6 for a 30-minute conversation with one lawyer.

Alternatively, they may try to resolve their own legal issues.

Torontonians generally only need a lawyer for a limited time and have a limited budget for such engagements. Yet it is hard for these people to distinguish lawyers and law firms from each other, especially given that many small and medium law firms have a general practice. It may also be intimidating for them to approach lawyers with their legal issues, given that doing so may cost money (e.g. $500 for the initial hour visit) and ultimately retaining a lawyer could be very expensive given the uncertainty of hourly billings.

These factors make ordinary Torontonians shy away from seeking or hiring lawyers. Those sophisticated Torontonians who surf the Web looking for a lawyer are hungry for more information than what is provided in the YellowPages or a newspaper advertisement. They are doing a Google or Yahoo search to seek out a particular type of attorney in a particular field in a particular area. They are also looking for testimonials and looking for the experience of a lawyer.

According to the Kelsey Group, provider of strategic research and analysis, data and competitive metrics on the Yellow Pages, and electronic directories, in a survey released in 2005, more adults are using the Internet to research shopping than they are the Yellow Pages.  According to the study, use of the Yellow Pages sharply declined in homes with Internet access, but alarmingly, remained flat in homes without Internet access. This suggests that the average consumer is loath to flip through hundreds of ads in a book, and more likely to tap‐tap‐ tap a few keys to find the information that they need (“Dramatic Shift in consumer practices forces legal industry to re‐ think advertising options”, Canada NewsWire (Ottawa: Mar 1, 2006), pg. 1.).

All in all, it makes perfect sense for users facing these challenges to turn to Dynamic Lawyers as a way of finding the right lawyer for the right price.  Making a post is free and anonymous, posts remain on the website for up to 45 days, and users have the opportunity to receive information and multiple quotes from local lawyers specializing in the area of law requested.  All in all, a very good deal…

written by admin \\ tags: ads, competition, Dynamic Lawyers, engagements, finding the right hourly rates, google, lawyer, lawyers, LSUC Lawyer Referral Service, money, newspapers, paralegal, paralegals, quotes, referrals, retainers, toronto, word of mouth, yahoo, Yellow Pages

I’m often asked how Dynamic Lawyers would work in reality. Here’s a quick and real example: I received a phone call the other day from a referral who wanted to know how to go about transferring their home into their spouses name. This is not something I’ve dealt with. I’m not a real estate lawyer. Rather than waste time and jeopardize doing something wrong, I directed the referral to Dynamic Lawyers to put their question out there for lawyers who focus on this area.

All lawyers who are registered with Dynamic Lawyers could search for and find this post. Also, if the lawyers has indicated in their account info that they practice “Real Estate” or “Tax” law (depending on how the user identified the legal area in the post), they would receive the post instantly in their online account and in their email account – to which they could respond. If the post is marked “public”, then everyone visiting the website would be able to search for the post. If the post is marked “private”, then only lawyers who are signed in and searching for the post or who have received the post in their account or inbox would be able to view and respond to it.

If you appreciate visuals, then check out this one page document entitled “How Dynamic Lawyers Works”.

written by admin \\ tags: accountants, Dynamic Lawyers, how does it work, lawyer, lawyers, make a post, publicity, referrals

I am a sole practitioner here in Toronto. I established my practice straight after articling and getting called to the bar (June 2008). People like me often don’t know where their next client is going to come from (typically referrals). But I started getting a client here and there from craiglist.org (I would just respond to individuals who were posting their legal problems).

That gave me an idea: I wanted to come up with a website like www.craigslist.org but which focuses on legal services.

That’s why I created Dynamic Lawyers.

The idea is simple: allow ordinary people to freely and anonymously explain, through an online post (which can be public or private), why they need a lawyer and then receive quick and multiple e-mail responses and quotes from local lawyers. For their part, lawyers specializing in the legal areas sought after would be able to directly and effectively market their services to the public. I believe that this website will simultaneously satisfy two pressing needs by bringing prospective lawyers and clients together.

While the idea is not necessarily new (see www.craigslist.org, www.kijiji.ca, www.lawyerahead.ca, www.canlaw.com, etc.), the way we are going about it is different. We are focusing initially on Toronto. We are focusing on certain legal areas (i.e. high volume transactions with fixed costs). We are not going to litter the website with ads or peripheral services. We are focusing solely on “Need a Toronto Lawyer? Make a Post. Get FREE Quotes!. We are not trying to be everything to everyone. Nor is this service going to be expensive for lawyers who wish to register: we’ve been giving lawyers 2 months free to try it out and we only charge $30 per month after that. My motivation is simple: I don’t like being charged a lot (particularly since it cost me about $15,000-$20,000 to set up my practice with no advertising), so I don’t want to charge individuals in my position a lot either. Finally, the website is going to be very much like a cross between www.google.ca and www.craigslist.ca (clean, simple, and easy to navigate).

Lawyers who have an account also receive new posts in their e-mails and will be able to instantly respond.  The posts are e-mailed out to lawyers based on certain criteria – namely, their geographic area (e.g. Toronto), legal area (e.g. criminal law), and matter (e.g. theft under $5,000). I figure that lawyers like me don’t have all the time in the world to roam the net or the website for clients, so why not just get notifications in my inbox when a new post has been made?

written by admin \\ tags: ads, criminal, Dynamic Lawyers, dynamics.com, lawyer, lawyers, Michael Carabash, motivations, need aaccountants, practitioner, publicity, quotes, referrals, toronto

As with lawyers, the end of Realtors is often prophesized through the advent of sell-by-owner websites that cut out the 6% commission which Realtors and brokerages charge for a typical transaction.   The idea behind the website is simple: allow owners and sellers to negotiate a purchase and sale agreement for property without involving the middlemen.  This  trend has been ongoing for some time now and there are a number of websites dedicated to squeezing out Realtors, such as For Sale By Owner.

It is interesting to note that although this trend is currently being experienced in its infancy in the legal industry (i.e. where disruptive technologies like Dynamic Lawyers, automated document generation, etc. are making legal services more accessible, affordable, and expedient), there are many difference between Realtors and lawyers which would make Realtors in their traditional form much more obsolete and faster.

To begin, the barriers to entry to becoming a lawyer are much greater than they are to becoming a Realtor (which does not require years spent at university, articling, etc.).  Second, there is a real access to lawyer problem: affordable lawyer specializing in certain legal areas are somewhat hard to find (e.g. Lawyer Referral Service? YellowPages?  Friends and Family?  Who do you turn to?).  There is no such access to Realtors problem: everyone and their uncle knows of a realtor they can turn to in order to sell their home or help them buy a new one.  Moreover, Realtors spend an exuberant amount of money advertising their services in a cut-throat market.  Third, lawyers must often specialize in certain complicated legal areas which take years of experience and know-how to develop expertise in.  For the most part, all Realtors can provide the same basic services – whether it be assisting clients in buying, selling, or leasing a home, commercial office, farm, etc.  If there is specialization in the real estate industry, it is likely confined to geographic areas and types of homes; this doesn’t take away from the fact that all Realtors are capable of doing the same thing (i.e. filling in paperwork, negotiating, and finalizing a deal).  These three differences reveal that lawyers – particularly those who specialize in a complicated legal area such as tax litigation or commercial law – are and will continue to be in high demand and, as such, safe and secure from disruptive technologies that will take business away from other types of lawyers.

Overall, given the low barriers to becoming a realtor, the market prevalence and accessibility to Realtors, and the fact that they can all pretty much perform the same services to assist clients, I envision the end of traditional Realtors happening on a wider scale much quicker than it would for traditional lawyers.

written by admin \\ tags: agreement, continuings, end of realtors, end of s, for sale by owner, lawyer, lawyers, litigants, litigation, money, negotiating, Negotiations, purchaser, referrals, technology, Toronto lawyer Michael Carabash

A while back, I looked into what was required to form a multi-disciplinary partnership with non-lawyers (e.g. accountants, bankers, insurance agents, consultants, Realtors, etc.) to offer legal services.  I thought it would be great to have connections with professionals who could provide me with constant and good quality referrals.

But I quickly dropped the idea after discovering a simple truth: compliance with the Law Society of Upper Canada Rules of Professional Conduct and By Law 7 was more than I imagined I could handle!  Being a sole practitioner as it is – with trust fund accounting, insurance and law society filings, etc. – is already burdensome enough when compared with other occupations and professions.  But it’s got to be down-right scary for lawyers (in my humble opinion) in my position who are considering forming affiliations and multi-disciplinary associations/partnerships with non-lawyers.   Here’s why…

For starters, lawyers are ethically and legally not permitted to share, divide, or otherwise split any revenue, cash flows, or profits with non-lawyers generated in the context of providing legal services (LSUC, Rules of Professional Conduct, Rule 2.08(8); see also LSUC, Knowledge Tree, “Fees, Billings and Collection: Referral Fees, Fee Splitting and Division of Fees”).  Lawyers can do so through multi-disciplinary partnership, but not through affiliations or multi-disciplinary associations.

Affiliations

So what if a lawyer or law firm started paying non-lawyers for certain business services that facilitated the delivering/promoting of the former’s services?  Well this business structure could lead to an “affiliation” under the LSUC’s Rules of Professional Conduct (Rule 1.02) and By Law 7.  Simply put, an affiliation exists where one entity (e.g. person, business, organization, etc.) joins a lawyer or law firm to deliver/promote the latter’s services.  If this is the case, then the lawyer or law firm would still not be able to share, divide, or otherwise split revenue, cash flow, or profit generated in the context of providing legal services to the affiliated entity (LSUC, Rule 2.08(9)).

Furthermore, the lawyer or law firm would be subject to additional onerous ethical/professional obligations and reporting requirements, such as:

• Informing clients about the nature and scope of the lawyer or law firm’s affiliation with the affiliated entity and obtain their consent to proceed (Rules 2.04(10.1 ) and (10.2));
• Establish a system to search for conflicts of interest with the affiliated entity (Rules 2.04(10.1 ) and (10.3));
• Ensure that the lawyer or law firm’s advertisements do not mislead the public about who is providing the legal services (Rules 3.04(3), Commentary);
• Ensure that the lawyer or law firm own and maintain control over the law practice and that such practice is not operated on premises used by the affiliated entity for the delivery of the affiliated entity’s non-legal services (By-Law 7, s. 32); and
• Disclose to the LSUC a report disclosing information between the lawyer or law practice and the affiliated entity with respect to financial agreements, ownership/control/management of the law practice, the lawyer’s compliance with conflict-of-interest requirements, and the lawyer’s compliance with confidentiality requirements (By Law 7, s. 33(2)).

The bottom line is that forming an affiliation with non-lawyers is too burdensome and not worth it (because fees cannot be split).

What about a multi-disciplinary association? Well, if non-lawyers teamed up with lawyers to support/supplement the latter’s provision of legal services to clients, then the Law Society of Upper Canada’s multi-discipline rules could be triggered.  Such rules impose obligations on all of the members of the association.  For example, the non-lawyers would:

• Not be able to practice their profession, trade, or occupation except to support/supplement the lawyer or law firm in providing client services (By Law 7, s. 18(2)(1)).
• Have to give effective control to the lawyer or law firm over its practice of its profession, trade, or occupation (By Law 7, s. 18(2)3);
• Not be able to practice its profession, trade, or occupation independent of its agreement with the lawyer or law practice on the premises used by the association (By Law 7, s. 18(2)5); and
• Have to agree to be bound by the Law Society of Upper Canada’s Rules, Guidelines, By-Laws, etc. (By Law 7, ss. 18(2)2).

For their part, the lawyer or law practice would have to agree to comply with various onerous obligations, such as being responsible for ensuring that the non-lawyer members of the association use appropriate skill, judgment, and competence in performing its profession, trade, or occupation and in complying with the Law Society of Upper Canada’s Rules, Guidelines, By-Laws, etc. (By Law 7, s. 19).  As aformentioned, lawyers would not be able to split or share their revenues, cash flows, or net income with the non-lawyer members of the multi-disciplinary association.  So again, the costs far outweigh the advantages of this structure.

So that leaves us with the Multi-Discipline Partnership

A multi-disciplinary partnership involves non-lawyers supporting/supplementing lawyers in providing legal services to clients.  The non-lawyer members of the partnership would, once again, have to comply with the same onerous conditions as non-lawyer members of a multi-disciplinary association.   And so too would the lawyer .  The only difference is that lawyers and non-lawyers would be able to share revenues, cash flows, and profits through the partnership.

Overall, if non-lawyers are going to get involved in promoting and delivering legal services, then the Law Society of Upper Canada is going to have to re-tool its Rules and By Laws to open up the market.  We’ve already seen the large Bay St. law firms hire business managers to help run their law practices more as businesses than as legal professions; let’s keep moving down that road so that we can make legal services more accessible to the general public.

written by admin \\ tags: accountants, advertising, affiliations, agreement, association, associations, confidentiality, insurance, law society of upper canada, lawyer, lawyers, multi-disciplinary sharing profits, partnership, practitioner, publicity, referrals

The Law Society of Upper Canada’s (“LSUC“) Lawyer Referral Services (“LRS“) has been around for some time now and it is well promoted.  For $6, anyone can call 1-900-565-4577 and be connected to a local lawyer who will speak to them for 30 minutes about their case.  I believe the time has come for the LSUC’s LRS to embrace technology and make it free and more convenient for users to get in touch with the right local lawyers.  To this end, I mailed a letter dated November 25, 2008 to John Peddie, manager of the LSUC LRS.   I stated in that letter:

“I’m writing to you because I believe there may be possible opportunities/synergies between the LSUC’s Lawyer Referral Service and www.DynamicLawyers.com.  Our website is completely free for users, posts are made on an anonymous basis, and users are capable of obtaining information from multiple lawyers who focus in the area of law requested.  Please have a look at the website and let me know what you think”.

A few weeks after sending the letter, I received a generic letter from the LSUC LRS, asking me to sign up for their services.  I’m still waiting for their response to my letter…

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