There’s no question 2014 started out as and has continued to be an annus horribilis for many in the legal profession.
The collapse of Heenan Blaikie LLP in February certainly left many people reeling. Most affected, of course, were the many people who worked there. Lots of lawyers quickly landed at other firms, but it’s clear the transition was difficult for many others. And, of course, the profession has been rife with speculation over which firm will be next to fall.
Adding to the uncertainty is the continued pressure on the legal business. In a ruling last week, the Ontario Court of Appeal illustrated that tension when it upheld a decision earlier this year chopping the legal fees of Borden Ladner Gervais LLP to $157,500 from the submitted $255,955 after a motion judge found they were excessive.
In its ruling, the appeal court took aim at the billable hour. “A person requiring legal advice does not set out to buy time,” wrote Justice Sarah Pepall in Bank of Nova Scotia v. Diemer.
“Rather, the object of the exercise is to buy services. Moreover, there is something inherently troubling about a billing system that pits a lawyer’s financial interest against that of its client and that has built-in incentives for inefficiency. The billable hour model has both of these undesirable features.”
On the bright side, the calamity many people were predicting earlier this year hasn’t materialized, at least so far. That’s not particularly surprising given revelations about what happened at Heenan Blaikie that indicate it was at least partly due to issues specific to the firm. And it’s also clear a number of firms have made some effort to adapt to client pressures by doing more around things like alternative fee arrangements.
As the Law Times Top News, Newsmakers, and Cases supplement that comes out with your paper this week has shown, it has been a fairly monumental year for the legal profession. From Walmart law to alternative business structures, it’s clear the discussions about the future of the profession will continue. So it seems 2015 is shaping up to be another significant year. And in the meantime, with the economy showing more substantive signs of improvement and some evidence of tentative change in the profession, it looks like things will be a bit better next year as we continue to muddle along.
— Glenn Kauth
The collapse of Heenan Blaikie LLP in February certainly left many people reeling. Most affected, of course, were the many people who worked there. Lots of lawyers quickly landed at other firms, but it’s clear the transition was difficult for many others. And, of course, the profession has been rife with speculation over which firm will be next to fall.Adding to the uncertainty is the continued pressure on the legal business. In a ruling last week, the Ontario Court of Appeal illustrated that tension when it upheld a decision earlier this year chopping the legal fees of Borden Ladner Gervais LLP to $157,500 from the submitted $255,955 after a motion judge found they were excessive.
In its ruling, the appeal court took aim at the billable hour. “A person requiring legal advice does not set out to buy time,” wrote Justice Sarah Pepall in Bank of Nova Scotia v. Diemer.
“Rather, the object of the exercise is to buy services. Moreover, there is something inherently troubling about a billing system that pits a lawyer’s financial interest against that of its client and that has built-in incentives for inefficiency. The billable hour model has both of these undesirable features.”
On the bright side, the calamity many people were predicting earlier this year hasn’t materialized, at least so far. That’s not particularly surprising given revelations about what happened at Heenan Blaikie that indicate it was at least partly due to issues specific to the firm. And it’s also clear a number of firms have made some effort to adapt to client pressures by doing more around things like alternative fee arrangements.
As the Law Times Top News, Newsmakers, and Cases supplement that comes out with your paper this week has shown, it has been a fairly monumental year for the legal profession. From Walmart law to alternative business structures, it’s clear the discussions about the future of the profession will continue. So it seems 2015 is shaping up to be another significant year. And in the meantime, with the economy showing more substantive signs of improvement and some evidence of tentative change in the profession, it looks like things will be a bit better next year as we continue to muddle along.
— Glenn Kauth
