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Conway warns of downsides to reform

OTTAWA — Controversial proposals to reinvent the way lawyers deliver services could lead to a decline of less profitable practices and transform law from being a profession to just another business, warns the head of the Law Society of Upper Canada.

Conway warns of downsides to reform
Tom Conway spoke about the future of the legal profession during the University of Ottawa Faculty of Law’s Thomas Feeney annual memorial lecture last week.
Speaking during a discussion with Toronto lawyer Mitch Kowalski at the University of Ottawa on Wednesday, LSUC Treasurer Thomas Conway said he’s concerned by the idea of reducing the profession of law to just another service provider.

Conway said many big law firms have already moved to a corporate structure but noted the idea of outside shareholders presents ethical issues.

As partners start to see themselves more as shareholders, that often means maximizing profits and the temptation to discourage the practice of less profitable areas of law, he said. While once there was “a kind of social compact” that full-service law firms owed a responsibility to provide a wide range of services, that has been changing.

“As the ethos changed and firms became more corporate in their attitudes and wanting to increase profits, the easiest way of doing that was to shed these practices that were not so profitable.”

While it makes business sense, it makes it more difficult for the public to access affordable legal services, said Conway.

“I don’t think that’s a good trend. I’m not sure that’s a trend we should encourage.”

Nevertheless, Conway said the law society has set up a committee to study Kowalski’s proposals.

Conway’s comments came as Kowalski’s controversial proposals to transform legal services in Canada took
centre stage during the University of Ottawa Faculty of Law’s Thomas Feeney annual memorial lecture last week.

In his book Avoiding Extinction: Reimagining Legal Services for the 21st Century, Kowalski argues that the legal profession is undergoing structural change and lawyers have to adapt if the profession is to survive. Options range from scrapping the system of billable hours to outsourcing some services and allowing shares in law firms to be  publicly traded.

“We are now, ladies and gentlemen, in 2013, living in the most disruptive period of time in the history of the legal profession in Ontario, bar none,” Kowalski told an audience of about 200 law students and professors.

In Kowalski’s fictional law firm of the future, lawyers bill by the project, not by the hour. Partnership structures give way to more of a corporate structure. Outside investors can buy shares in law firms. Knowledge management is done in the Philippines. The firm doesn’t take on articling students and none of its lawyers has less than five years’ experience.

“It’s imperative that lawyers stop looking at the present through a rearview mirror,” said Kowalski, who’s currently a visiting professor at the university. “It’s time to stop allowing the past to shape our future. It’s time to ask ourselves why do we deserve to have a monopoly over legal services in this country.”

While panellists agreed with Kowalski that Canada’s legal profession is headed for a transformation, reaction to his proposals varied widely.

University of Ottawa law professor Michael Geist, an expert on the Internet, electronic commerce, and intellectual property, likened the changes coming to the legal profession to those that have been transforming newspapers. If anything, Kowalski understates the extent and the speed of the change the legal profession is about to experience, he said.

“I buy a lot of what Mitch is selling in his book because I think the changes that he talks about are coming. . . . The time to begin to move and reimagine is now.”

Geist said CanLII is making it easier to access legal information. Companies like LegalZoom that handle wills, incorporations, and other types of transactions are attracting new clients, taking business away from existing law firms, and moving up the value chain in terms of the services they offer.

“Those are two million clients that over the last number of years previously would have looked to small- and medium-sized lawyers predominantly to provide those kinds of services and yet they are able to leverage the technology to take that business away the same way Craigslist took away the classified ads from newspapers almost overnight,” said Geist.

For his part, Conway said companies like LegalZoom are a test for law societies.

“Services like LegalZoom . . . present a real challenge for regulators of legal services because you don’t really know who’s there and whether the services are competent and where they are coming from.”

Margaret Ross, a partner at Gowling Lafleur Henderson LLP who focuses on medical litigation, said the key to survival for the legal profession is nurturing the relationship with clients. While many lawyers can do the same job, clients often look for someone who cares about them and their business.

“Ultimately, you are trying to find someone who understands your interests and your problems and your issues and will make them paramount,” she said.

“You want somebody who cares about your problems. Getting and staying retained by clients in my mind is all about earning and keeping that trust.”

Creating efficiencies, consistent training, and rigorous knowledge management are also key, said Ross.

Ross said several of the strategies that Kowalski recommends are already being implemented in many firms.

However, she said she was troubled by the idea of firms not hiring students.

Comments   

0 # Michele Ballagh 2013-01-15 11:26
Good or bad, I think the capital infusion provided by shareholders will become more and more necessary for large firms to compete on the international stage where other international firms have access to such capital. The upside may be that having shareholders will require greater transparency in law firm management.

As for the "social compact" between lawyers and the public, I think the big firms largely abandoned personal services and pro bono services long ago. The availability of such services to the public depend on small firms, sole practitioners and the goodwill of individual lawyers - not large law firms or their corporate structure.
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+2 # Maryellen Symons 2013-01-15 09:56
The law firm of the future "doesn’t take on articling students and none of its lawyers has less than five years’ experience." Where do the lawyers get their five years or more of experience?.
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+1 # Albin 2013-01-14 16:48
The two obvious issues raised by Kowalski's ideas are a) the fiduciary duty to profit owed to as a legal priority to shareholders, in potential conflict with the professional priorities given unprofitable activities like pro bono representation, legal aid, or articling, and b) the historic role of the bar as "officer of the Court" which is an essential aspect of professional self-governance and standards of conduct, that runs up against profit-seeking corporate governance. My guess is that under a corporate structure the "public utility" question would very quickly come up, along with the imperative of appropriate government regulation to ensure the administration of justice.
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