The Law Society of Upper Canada has unveiled its financial data for 2008, tentatively reporting a stable economic position in the midst of a global recession.
“It is incredibly fluid, and so telling you at any one time how we’re doing is, ‘And tomorrow could be different,’” audit committee chairwoman Bencher Beth Symes told April Convocation, in presenting the law society’s audited financial statements for the year ended Dec. 31, 2008.
“All I’m saying and what we want you to know is that so far there is no cause for alarm, and that our performance has in fact recently done better.”
The LSUC’s general fund, which includes various funds such as the society’s operating fund and a number of special purpose funds, finished 2008 with a surplus of $3.938 million. The fund had ended 2007 with a $390,000 deficit.
“So our funds are in good shape,” said Symes.
She noted that the general fund’s performance is reflected by its investment income. It was slightly up over the year, finishing at $4.821 million, slightly above the 2007 total of $4.431 million.
Total revenues also were up for the general fund, to $72.738 million from $65.697 million in 2007. “They’re up because we have 980 more lawyers, and we increased the lawyer fee by $52 in 2008,” said Symes. “The second thing is, that we have the income from the paralegal licensing, where we have over 2,300 paralegal licensees paying dues this year.”
Revenues in the general fund for professional development and competence were up to $14.643 million from $10.824 million in 2007. Symes attributed that increase to $2.8 million in fees from paralegal entrants. Revenue from CLE courses increased by 15 per cent, with the number of lawyers taking CLE courses increased to 18,600 in 2008 from 17,000 the year before.
“What is clear is that [director of professional development and competence] Diana Miles’ team are producing products that lawyers want, need, and are continuing to attend,” said Symes.
On the net expenses side for the general fund, the total rose to $68.8 million in 2008 from $66.087 the year before.
“Generally, those increases are across all of the areas,” said Symes. The biggest changes were in regulation and the new expenses associated with paralegals, she noted.
Symes pointed out that bencher expenses increased to $669,000 in 2008, “which is up about $120,000 from the previous year.”
Information on the general fund’s actual performance in 2008 versus budgetary projections was not made public.
Symes also presented results for the law society’s compensation fund, which is maintained in accordance with the Law Society Act “to relieve and mitigate loss sustained by any person in consequence of dishonesty on the part of a member,” according to the report to Convocation.
That fund’s balance ended 2008 at $19.868 million, down from $21.430 in 2007. In 2008 the fund was divided into different balances for paralegals, which ended the year with a balance of $7,000, and lawyers, which finished with a balance of $19.961 million.
Symes pointed to a pair of factors that led to the deficit of $1.569 from 2007 in the lawyers’ fund. First, there was a decline in investment income to $433,000 in 2008 from $806,000 in 2007. The net grants expense, meanwhile, increased to $3.277 million from $1.326 million the year before.
“The increase in the net grant expenses is attributable to a number of claims that we have received from clients relating to two lawyers,” said Symes. “These are still in the early stages of processing, but these reserves are seen to be prudent given the nature of the claims.”
Funds related to LibraryCo Inc., which manages the Ontario County and District Law Library system on a not-for-profit basis, also were presented. Symes reported a surplus of $57,988 for 2007, versus a $111,299 deficit the year before. She cited an increase in revenue from grants, lower head office expenses, and a reduced need for capital and special needs grants.
Specifically, total revenues for LibraryCo increased to $8.7 million in 2008 from $8.2 million in 2007 due to a larger grant from the LSUC. An increase in costs for electronic products and grants to the country libraries led to an increase in expenses to
$8.6 million from $8.3 million.
The combined financial statements for the errors and omissions insurance fund and LawPRO revealed that the excess of revenue over expenses fell to $5.91 million in 2008 from $18.39 million in 2007.
Total revenue was down to $119.327 million, from $128.228 million in 2007. Symes noted that a fee reduction of $300 per member likely contributed fully to the reduction in insurance premium revenue to $78.811 million in 2008 from $84.948 million.
Expenses were up to $113.417 million from $109.838 million in 2007.
Benchers accepted the financial statements and reappointed Deloitte & Touche LLP as auditor of the general fund, compensation fund, and LibraryCo. for 2009.