Category: Legal Services Regulation

Regulating Contingency Fees: A Consumer Welfare Perspective

Noel Semple

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

Noel Semple

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 “Long Live the Law Practice Program” →

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

Noel Semple

(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

ABS: What Horrors Within?

Noel Semple

Canadian Bar Association National Magazine, December 4, 2014.

“Professor, I was wondering if you could tell us anything about the Chamber of Secrets,” said Hermione in a clear voice… “What exactly do you mean by the ‘horror within’ the Chamber?”

“That is believed to be some sort of monster…” said Professor Binns in his dry, reedy voice.

-J.K. Rowling, Harry Potter and the Chamber of Secrets

An alternative business structure (ABS) is a law firm that includes non-lawyers as investors, managers, or partners. Such arrangements are effectively forbidden throughout Canada today. However prominent voices, such as the CBA Legal Futures Initiative, are now calling for regulators to roll back these rules and welcome ABS firms to our legal landscape.

A future with ABS is a chamber of secrets, rumoured to contain both glittering treasures and savage monsters. The treasures may include enhanced access to justice for clients,and new innovation and flexibility for legal professionals. The value of these treasures cannot be known unless and until we roll back the regulation currently blocking the entrance to the chamber.

However many are reluctant to do so, because two monsters are also said to reside in the chamber. One of these beasts, it is said, eats legal ethics by corrupting lawyers. The other allegedly eats lawyers themselves, by stealing their clients.

While the treasures in the chamber are uncertain, the two monsters are entirely figmentary. Our regulators therefore have nothing to lose–and possibly a great deal to gain—from opening the door to alternative business structures

Full text here.

 

Legal Services Regulation At The Crossroads: Justitia’s Legions

Noel Semple

(2015) Edward Elgar Press, 308 pages.

Available now Edward Elgar Press in hardcover and as an affordable e-book .

“A must read for everyone in North America who is making decisions on regulatory change to the legal services industry.” (Mitch Kowalski’s review in the Financial Post)

Through a comparative study of English-speaking jurisdictions, this book seeks to illuminate the policy choices involved in legal services regulation as well as the important consequences of those choices. Regulation can protect the interests of clients and the public, and reinforce the rule of law. On the other hand, legal services regulation can also undermine access to justice and suppress innovation, while failing to accomplish any of its lofty ambitions. The book seeks a path forward to increasing regulation’s benefits and reducing its burdens for clients and for the public. It proposes a client-centric approach to enhance access to justice and service quality, while revitalizing legal professionalism, self-regulation, and independence.

A Taxonomy of Lawyer Regulation

Noel Semple

by Noel Semple, Russell Pearce, and Renee Knake

Legal Ethics, Vol. 16, No. 2, pp. 258-283(2013) (published 2014).

Full text: http://ssrn.com/abstract=2396041

What explains the dramatic contrast between legal services regulation in the United States and anglophone Canada, on one hand, and England/Wales and Australia, on the other? In order to help explain these divergent regulatory choices, and to further comparative analysis, this Essay proposes a taxonomy of theories of legal services regulation drawn from these common-law jurisdictions.

Continue reading “A Taxonomy of Lawyer Regulation” →