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LAW OFFICE MANAGEMENT meets the goals of federal anti-money laundering and terrorist financing policies, while remaining exempt from legislation that would compromise so- licitor-client privilege. Few lawyers question the value of measures to ensure they do not inadver- tently help fraudsters or terrorists, but some are worried about what they have to do to comply, how much work is involved, and how much of it is re- ally necessary. As Christianson puts it, there is "a sense of dread over the complexity of it." "There are con- to keep basic contact information on cli- ents — one reason being that you may want to track them down if they don't pay their fees. Nevertheless, John Esvelt, director of risk management at Fraser Milner Cas- grain LLP, notes that there are privacy law issues involved in maintaining re- cords, even of basic contact information national firm must study the rules of each law society and look for the high- est common denominator. Jacqueline Shinfield, a partner at the "If my mother comes in and asks me to do a financial transaction, I'm going to have to ask her for ID." — BARNEY CHRISTIANSON CHRISTIANSON CHRISTIANSON JONES LAW CORP. cerns around how the rules will oper- ate," says Ron Skolrood, a partner with the Vancouver office of Lawson Lundell LLP, and a member of a Canadian Bar Association committee that supported the federation's model rules as an alter- native to government regulation. "It will take some time for small-firm lawyers and large-firm lawyers to sort out what's necessary, in terms of their own internal systems, to comply." For some firms and some practice ar- eas, the new rules do not present much of a challenge. For example, Karon Bales, a partner at Toronto-based Bales Beall LLP, says she didn't have to change much since she doesn't often act for cor- porations and her family law and estate- planning practice doesn't ever involve releasing money on behalf of clients. All she needs to do, therefore, is ensure that her firm records names, addresses, and other such basic information. In fact, the rules can be helpful, she says, for dealing with the occasional client who wants to do business only by e-mail and is reluctant to provide a physical ad- dress. "I don't feel comfortable doing that and now I can say, 'I can't act for you if you don't give me your address and phone number because the law so- ciety won't let me.'" Karen Bell, a lawyer and consultant who has advised Bales and other lawyers on how to comply with the new rules, notes that it makes good business sense about clients. Privacy laws require that such information be kept securely and only as long as it's needed. He says the best way to do this is to keep it in a secure electronic file building in the capacity to track who has accessed the information and when, as well as a procedure for de- stroying the information when the client is no longer using the firm. While this is no problem for a large or mid-sized firm with its own information technology staff, Christianson points out that it may present difficulties for a sole practitioner "who now has to do this in addition to working on the file, doing the bookkeeping, and getting the mail to the post office by five o'clock." Where things get really complicated, however, is in verifying the identity of clients or other parties to transactions, particularly if they are located outside the country. To begin with, there could be logistical difficulties in actually ob- taining documents to verify the iden- tity of officers of private corporations. Then there is the question of precisely what kind of verification is required, from whom, and in what circumstanc- es. In this regard, Esvelt notes that law societies have been amending the rules to address various challenges as they have been identified by law firms, but one result of this is that some of the language in the rules are different from one jurisdiction to the next so that a Toronto office of Blake Cassels & Gray- don LLP, describes a multi-phase pro- cess whereby she and her firm prepared for the new rules. It began with the preparation of a huge internal memo on all that is involved in the new rules. Then a checklist was drawn up to ensure com- pliance with regard to trust accounts. A letter was drafted to send to agents out- side of Canada who may be asked to ver- ify people's identity on behalf of the firm. Forms were prepared for attestation of identity, for electronic funds transfers, and for new file openings. An account- ing procedure was put in place for stor- ing information. Educational seminars were held for lawyers and staff at the firm. A bulletin was sent to clients de- scribing the changes and what infor- mation would now be required from them. Again, none of this necessarily pres- ents a huge challenge for a large nation- al firm, but Christianson says lawyers in rural Manitoba are wondering how they should handle verification problems that could arise when acting for mem- bers of an immigrant family participat- ing in a property deal with relatives in Asia or Europe. He suggests the best approach for small firms is not to prepare forms, policies, and procedures in advance to cover every possible eventuality, but to "do it on a file-by-file basis." This way, he says, you can evolve a checklist based on the actual situations you encounter in your work and find out whether problems and challenges that you orig- inally anticipated with the new rules "really exist or are part of our imagina- tion." Freelance journalist and business writer Kevin Marron can be reached at kevin@ kevinmarron.com www. C ANADIAN Law ye rmag.com FEBRU AR Y 2009 19