The British Invasion: Legal Services Regulation Edition

Slaw.ca Legal Ethics Column, April 10, 2020.

Found online at: http://www.slaw.ca/2020/04/10/the-british-invasion-legal-services-regulation-edition/

Bringing British things across the pond is a hot Canadian trend. Prince Harry and Megan Markle are now our most famous immigrants. A Canada-U.K. free trade deal has apparently become a post-Brexit priority. And the Downton Abbey movie has raked in hundreds of millions of dollars from my parents and their friends.

While we’re at it, we should copy at least three aspects of legal services regulation as practiced in our erstwhile mother country. The U.K. has swept away many of the outdated and unnecessary restrictions on legal services that we still cling to. The payoff is better access to justice, without any apparent diminution in quality or ethics. Continue reading

Bridges over the Chasm: Licensing Design and the Abolition of Articling

Slaw.ca Legal Ethics Column, July 27, 2018.

Found online at: http://www.slaw.ca/2018/07/27/bridges-over-the-chasm-licensing-design-and-the-abolition-of-articling/

What should people who want to practice law have to do before they are licensed? This perennial debate has bloomed once again. The Law Society of Ontario (LSO) is seeking feedback on its Options for Lawyer Licensing consultation paper (Slaw summary here). Two of the LSO’s four options would abolish articling. Candidates would instead have to pass exams covering both legal skills and substantive knowledge. There would also be a law practice program, either required for all candidates (LSO’s Option 4) or only for those practicing in smaller firms (Option 3).

Thinking of licensing in terms of footbridges over a chasm may help clarify what is at stake, and why the LSO should in fact abolish the articling requirement. Continue reading

Measuring Legal Service Value

(2019) University of British Columbia Law Review, Vol. 52, No. 3.

This article proposes a theoretical foundation for measuring legal service value. It aims to support efforts to compare the value of offerings from different law firms, as well as alternative legal service providers.

The value of any legal service depends on (i) its effectiveness, (ii) its affordability, (iii) the experience it creates for its clients, and (iv) third party effects (the impact the service-provider has on people other than the client).

These four elements of value can be quantified through various metrics applied to firms or entities that provide a given service. Output metrics evaluate either the actual real-world impact of a legal service, or the written and oral work products of the firm. Internal metrics check for processes or structures within a firm that demonstrably support high value outputs. Input metrics focus on the attributes and credentials of the individuals who provide the service.

This article concludes that measuring legal service value is challenging, and may be dangerous if done poorly. Nevertheless, the rewards justify the challenge. Higher quality legal professionalism, more effective and less burdensome regulation, and consumer empowerment are among the payoffs if we can find better ways to measure legal service value.

Full text: https://ssrn.com/abstract=3144771

Mystery Shopping: Demand-Side Phenomena in Markets for Personal Plight Legal Services

International Journal of the Legal Profession, Vol. 25.

“Personal plight” is the sector of the legal services industry in which the clients are individuals, and the legal needs arise from disputes. This article proposes that competition among personal plight law firms is suppressed by three demand-side phenomena. First, consumers confront high search costs. Identifying competing law firms willing and able to provide the needed services often requires significant expenditure of temporal and psychological resources. Second, comparable price and quality information about firms is scarce for consumers. Both of these factors impede comparison shopping and reduce competitive pressure on firms. A third competition-suppressing factor is observed in tort legal service markets, where offerings are typically priced on a contingency basis. Contingency fees have relatively low salience to consumers, and this reduces consumers’ willingness to negotiate and comparison-shop on the basis of price. This analysis is supported by the author’s empirical research with Ontario personal plight lawyers as well as the existing literature. The article concludes by suggesting possible consequences of this analysis for regulatory policy.

Full text: https://www.tandfonline.com/doi/abs/10.1080/09695958.2018.1490292?journalCode=cijl20

Measuring Legal Service Value, Part 2

Slaw.ca Legal Ethics Column, Tuesday June 1, 2018.

Online: http://www.slaw.ca/2018/06/01/measuring-legal-service-value-part-2/.

What makes a great law firm? How can one quantify just how great a firm is, and compare it to its competitors? Last time in this space I suggested that legal service value has four elements (full paper here):

  • To the extent that a firm gets good legal results for its clients, it has effectiveness value.
  • To the extent that the firm’s fees are low and easy to pay, it has affordability value.
  • The more the firm’s practices minimize clients’ time and stress costs, the more client experience value it has.
  • Finally, if the firm’s work has many benefits and few costs for people other than its clients, it has high third party value.

In principle, a firm’s performance on these four elements of value can be quantified. If we could actually create accurate charts like these for legal services providers, we would have more empowered consumers, better self-awareness of strengths and weaknesses within law firms, and more evidence-based regulation. This project can also move us toward a more meritocratic legal profession, in which individual success is less dependent on racial and socioeconomic privilege.

An accurate quantification of value will require multiple metrics, and the array of metrics will depend on the legal niche in question. This column outlines three basic types of metric for quantifying legal service value: output metrics, internal metrics, and input metrics. Output metrics measure what comes out of the legal service provider. Internal metrics examine what happens inside the firm. Finally, input metrics analyze the people who walk in (or log in) to the firm each morning. Continue reading

Measuring Legal Service Value, Part 1

Slaw.ca Legal Ethics Column, Tuesday April 5, 2018.

Online: http://www.slaw.ca/2018/04/05/measuring-legal-service-value-part-1/.

If you work at a law firm, how good is that firm? If you’re a client or potential client, how good are the different legal services providers that you might choose to patronize?

It’s too difficult, at present, to answer these questions in an objective and reliable way. This is most obviously true for individual people with legal needs. They generally confront a mysterious landscape populated with apparently indistinguishable law firms, as well as proliferating alternative sources of legal services.

However, even experienced corporate clients, and lawyers themselves, lack solid information about the respective merits of different legal service providers. To evaluate quality, they must often rely on opaque, methodologically suspect rankings or else anecdotal impressions of firms.

We need better ways to quantify and compare the value propositions offered by different providers of legal services. This column proposes a definition of legal service value, and next time in this space I’ll propose and categorize metrics for quantifying it. A detailed paper on these topics is available here. Continue reading

Contingency Fee Arrangements: Comments on to Law Society of Upper Canada Advertising and Fee Arrangements Working Group.

With Jenna Wright, September 29, 2017.

This is a submission to the Law Society of Upper Canada’s Contingency Fee Arrangements Consultation. In this document, we provide several recommendations in response to the Fifth Report of the Advertising & Fee Arrangements Issues Working Group. The premise behind these recommendations is that contingency fee regulation should seek to maximize consumer welfare. In other words, regulation should advance the interests of clients in (i) low price, (ii) high quality, (iii) fairness and predictability, and (iv) choice. This Submission considers seven issues:
1. Introduce Mandatory Retainer Contract 2
2. Avoid Excessively Low Fee Caps 3
3. Calculation of Contingency Fees 4
4. Regulate Disbursements 6
5. Firm Responsibility for Financial Risk Arising in Civil Litigation 7
6. Advertising 8
7. Moving from “Heavy Hand” to “Light Touch” Regulation 8

Can be found online at: https://ssrn.com/abstract=3045503

Shady Billing: Closing the Hall of Shame

Slaw.ca Legal Ethics Column, Jan. 30 2018

http://www.slaw.ca/2018/01/30/shady-billing-closing-the-hall-of-shame/

Only “fair and reasonable” fees and disbursements can be charged by lawyers to their clients. This rule is uncontroversial, and applies across the country. Nevertheless, the following billing practices are used by some Canadian firms, and not clearly forbidden by regulation:[1]

Continue reading

Legal Services Regulation in Canada: Plus ça change?

In Andy Boon, ed., International Perspectives on the Regulation of Lawyers and Legal Services, (Oxford: Hart Publishing, 2017).

In common law Northern Europe and in Australasia, a wave of reform has been transforming legal services regulation since roughly 1980. Old structures and approaches, based on the principles of professionalism and lawyer independence, are being replaced in these jurisdictions by new ones that prioritize competition and consumer interests. In the United States this has conspicuously not happened, leaving intact a regulatory approach whose broad outlines have changed little in the past 100 years.

Thus, I have argued that the legal services regulatory regimes of the common law world today are bifurcated into (i) a competitive-consumerist paradigm apparent in the UK, in Australia, and in their smaller neighbours, and (ii) a professionalist-independent mode which survives in the United States and a few other places.

Where does Canada fit into this picture? With a view to locating the author’s home and native land on the spectrum between the competitive-consumerist and professionalist-independent traditions, this Chapter reviews key characteristics and important recent developments in Canadian legal services regulation. After providing an overview of the Canadian legal profession, the Chapter proceeds in four sections: (i) Governance and the Role of the State; (ii) Professional Organization and Occupational Unity; (iii) Firm Insulation and Alternative Business Structures, and (iv) Regulatory Focus. I conclude that, in Canada’s common law provinces, legal services regulation remains firmly in the professionalist-independent tradition.

Full text online, SSRN: http://ssrn.com/abstract=2833336.

Regulating Contingency Fees: A Consumer Welfare Perspective

Invited contribution to Trevor Farrow & Les Jacobs eds., The Cost and Value of Justice (Vancouver: University of British Columbia Press, forthcoming 2020).

How can we preserve and extend what’s good about contingency fees, while minimizing the bad and the ugly? In order to identify the regulatory tools best suited to this challenging task, this Chapter proposes a consumer welfare analysis.

The consumers of contingency fee legal services are the individual clients, and the members of classes, represented by law firms working on this basis. These consumers, like other consumers, have interests in:

(i) quality,

(ii) price,

(iii) fairness, and

(iv) choice.

Part 2 of this Chapter will analyze these four sets of consumer interests, all of which are affected by the regulation of contingent fees. Part 3 scrutinizes various regulatory approaches to contingency fees against the consumer welfare criterion. I argue that heavy-handed interventions, such as fee caps and retrospective price review, can do as much harm as good for consumers. “Light touch” alternatives such as disclosure and standardized contracts, and fostering the “invisible hand” of the market, are preferable approaches for a regulators interested in maximizing consumer welfare.

Early draft online: https://ssrn.com/abstract=2959477.

Long Live the Law Practice Program

I am struggling to understand the justification for the recent committee recommendation to end the Law Practice Program. The LPP is the Law Society’s alternative licensing program predominantly used by candidates unable to find articling positions.

The committee‘s central rationale seems to be that the LPP is “perceived as second tier.” They acknowledge that (i) “there is no evidence to suggest that the LPP is in fact second-tier” and (ii) the LPP is “of very high quality and may, in fact, excel over articling in a number of areas” in terms of preparing candidates for practice (para 59).

A regulator ending the LPP because it’s perceived as second tier to articling is like a regulator banning Chevrolets because they are perceived as second tier to Cadillacs. A regulator which does so must, at very least, have a realistic plan to ensure that everyone will be able to drive a Cadillac/get an articling position.  I can’t find any such plan in this Report. Continue reading

Male, Pale, and Stale? Diversity in Lawyers’ Regulatory Leadership

(2016) Canadian Journal of Law and Society, Vol. 31, Issue 3, p. 405.  (Peer-reviewed). Online: Cambridge University Press.

When lawyers elect the leaders of their self-regulatory organizations, what sort of people do they vote for?  How does electoral system design affect the ability of law societies and bar associations to understand and regulate a diverse legal profession? This article quantitatively assesses the demographic and professional diversity of leadership in the Law Society of Upper Canada.  After many years of underrepresentation, in 2015 non-white members and women were elected in numbers proportionate to their shares of Ontario lawyers. Regression analysis suggests that being non-white was not a disadvantage in the 2015 election, and being female actually conferred an advantage in attracting lawyers’ votes. The diverse employment contexts of the province’s lawyers were also represented in the elected group.  However early career lawyers were completely unrepresented.  This is largely a consequence of electoral system design choices, and can be remedied through the implementation of career stage constituencies.

Can be found online at: https://doi.org/10.1017/cls.2016.33

This research was also the subject of an article in the Law Times newspaper: https://www.lawtimesnews.com/news/general/prof-calls-for-reforms-to-boost-youth-presence-at-convocation/261812